MANU/DE/0916/2008 Equivalent Citation: 152(2008)DLT342, 2008(105)DRJ469 IN THE HIGH COURT OF DELHI CS (OS) 313/1992 Decided On: 02.07.

2008 Appellants: Shri Anisuddin and Anr. Vs. Respondent: Mrs. Vimla Sethi and Ors. Hon'ble Badar Durrez Ahmed, J. Counsels: For Appellant/Petitioner/Plaintiff: J.K. Seth, Sr. Adv. and Rakesh Saini, Adv For Respondents/Defendant: Sanjay Jain, Sr. Adv., Deepak Dewan, Arjun Mitra and Usha Kumar, Advs. Subject: Property Subject: Limitation Catch Words Mentioned IN Acts/Rules/Orders: Limitation Act, 1963 - Schedule - Article 54; Civil Procedure Code (CPC), 1908 - Order 8, Rules 3 and 6 Case Contract Note: 1872 Judges:

Act,

Sections 9 & 10 - Specific performance of the agreement to sell--consideration entire amount stood paid to the defendant--Once the parties have admitted that they executed the documents and affixed their signatures thereto, it is immaterial as to whether they signed the said documents at the same place or at different places--Suit decreed. JUDGMENT Badar Durrez Ahmed, J. 1. This is a suit claiming a decree for specific performance of the agreement to sell dated 23.04.1981 / 05.05.1981 and for directing the defendant No. 1 to execute the sale deed in respect of plot No. 226, Block-A, New Friends Colony, New Delhi (hereinafter referred to as 'the said plot') in favor of the plaintiffs. The plaintiffs have also sought a decree declaring that the plaintiffs are the absolute owners in possession of the super-structure standing on the said plot. 2. The plaintiffs, who are brothers, have pleaded that the defendant No. 1 (Smt Vimla Sethi) was the original allottee in respect of the said plot. The perpetual sub-lease dated 24.03.1973 (Exhibit DW-1/P-16) was in favor of the defendant No. 1: The President of India being the lessor, The New Friends Cooperative House Building Society Ltd being the lessee and the defendant No. 1 being the sub-lessee. Clause II(5) of the said sub-lease required the sub-lessee (defendant No. 1) to construct a residential building for private dwelling on the said plot within a period of two years. It is further pleaded that because the defendant No. 1 was not possessed with sufficient funds and was unable to erect the building, the defendant No. 1 entered into negotiations for the sale of the plot to the plaintiffs in consideration of payment of Rs 1,80,000/-. It is further pleaded that the agreement to sell dated 23.04.1981 / 05.05.1981 was executed between the parties, i.e., by defendant No. 1 as owner / vendor and the plaintiffs as purchasers / vendees for the sale of the said plot

measuring 481.5 sq. yds. It is stated that though the agreement was completed on 05.05.1981, the same was dated as of the date of original oral agreement, i.e., 23.04.1981. 3. The plaintiffs further averred in the plaint that the total consideration of Rs 1,80,000/was paid to the defendant No. 1 through bank drafts, against receipts, as follows: 1) D.D. No. 065236 for Rs 90,000/- dated 04.05.1981; 2) D.D. No. 007967 for Rs 10,000/- dated 21.04.1981; 3) D.D. No. 065235 for Rs 45,000/- dated 04.05.1981; 4) D.D. No. 065237 for Rs 35,000/- dated 04.05.1981. It is further stated that the said demand drafts were drawn on Mercantile Bank Ltd., Calcutta in favor of the defendant No. 1 and were encased by her. 4. It is further averred in the plaint that as per the said agreement to sell, it was agreed that the sale deed would be executed and registered in favor of the plaintiffs in terms laid down by the Delhi Development Authority (DDA) or the Government and at such time as was permissible by the DDA or any other authority, after construction of the building on the plot. The plaintiffs have stated that besides the said agreement to sell, the defendant No. 1 also executed other documents which were generally in vogue at that point of time, such as, receipts, agreement of building construction dated 23.04.1981 authorising the plaintiffs to construct the building, three general powers of attorney in favor of Mr Riazuddin, father of the plaintiffs, two special powers of attorney, again in favor of Mr Riazuddin, four affidavits, one Indemnity Bond, a will dated 05.05.1981 and other documents. It is further pleaded that the plaintiffs got the plans for the construction prepared and the same were signed by the defendant No. 1 and were submitted for sanction. The construction of the building was raised by the plaintiffs entirely at their own costs and as per the sanctioned plans. It is further submitted that the completion certificate was obtained on 21.08.1984. It is further averred that the defendant No. 1 simultaneously signed a document stating that she was unable to make the payment of cost of construction and stating that the plaintiffs should get the sale deed registered in their name. It is further averred that no date was specified in the said agreement to sell as to when the sale deed was to be executed and the defendant No. 1 was under an obligation to execute the sale deed whenever required to do so by the plaintiffs. It is alleged that the plaintiffs on various dates and lastly by letters dated 27.09.1991 and 23.11.1991 required the defendant No. 1 to apply for and obtain the income tax clearance certificate and other necessary permissions from the competent authorities for execution of the sale deed in consideration of the amount already received by her. It is alleged that the defendant No. 1, through her lawyer's letter dated 04.12.1991, has taken an evasive attitude which may be construed as repudiation of the agreement to sell. Consequently, it is averred that the commencement of limitation for the filing of the present suit would be the date of the said letter dated 04.12.1991 and the suit having been filed within three years, is within time. 5. Alternatively, it was pleaded that from time to time, the defendant No. 1 either by herself or through her husband as also through the general power of attorney holder acknowledged the agreement to sell and promised to complete the transaction. Various letters were addressed to one Mr Mohd. Zaki, the uncle of the plaintiffs, who was acting as an authorised representative of the plaintiffs and some letters were also addressed to the plaintiffs. It was, thereforee, pleaded in the alternative that the time of the performance of the agreement to sell by execution of the sale deed stood extended by the acknowledgements made by the defendant No. 1 and or by her husband, who acted as her agent and / or by the advocate in various letters dated 08.12.1981, 13.10.1982, 18.08.1983, 24.05.1986, 10.06.1986 (two letters), 25.09.1989, 23.11.1989, 03.08.1991, 04.09.1991, 19.10.1991 and 04.12.1991 as also the acknowledgements by the general power of attorney holder of the defendant No. 1 dated 31.03.1984, 30.03.1987 and 29.03.1990. The plaintiffs have also pleaded in paragraph 5 of the plaint that they did not agree to the defendant No. 1's lawyer's suggestion to execute a new agreement, but insisted on the completion of the transaction on the basis of the old agreement and informed the defendant No. 1 by a letter dated 23.11.1991 that she should obtain the permission of the DDA and clearance certificate from the income tax officer inasmuch as these were the only two matters which remained to be completed by the defendant No. 1 and thereafter the sale deed could be executed. The plaintiffs pleaded that the entire consideration of the plot had been paid, possession of the plot had been handed over by the defendant No. 1 to the plaintiffs, the building had been constructed by the plaintiffs at their own costs and that they were being assessed by the income tax authorities as the owners in possession of the building. It is further averred in paragraph 6 of the plaint that the defendant No. 1 was under an obligation to execute the sale deed in favor of the plaintiffs whenever called upon to do so and that the plaintiffs by their letter dated 23.11.1991 called upon the defendant No. 1 to execute the necessary sale deed. The defendant No. 1 had failed to comply with this request. It is alleged that the

defendant No. 1 is avoiding execution of the sale deed on account of her own difficulties with the income tax department. 6. It is also pleaded by the plaintiffs that they were, at all times and are still, ready and willing to complete the agreement to sell in respect of the suit property ( No. A-226, New Friends Colony, New Delhi), but the defendant No. 1 has not obtained the income tax clearance certificate nor has she applied to the competent authority for requisite permission nor has she executed the sale deed. The present suit has been filed in these circumstances. 7. In the written statement filed by the defendant No. 1, it is submitted that the alleged agreement to sell dated 23.04.1981 / 05.05.1981 was only meant as draft paper for discussion and nothing else and no formal agreement in any legal or moral sense of the term had been arrived at. It was also submitted that the alleged agreement to sell dated 23.04.1981 / 05.05.1981 was ab initio void as it was signed by the plaintiffs at New Delhi on 23.04.1981 and by the defendant No. 1 at Calcutta on 05.05.1981. It is also alleged that the said agreement to sell dated 23.04.1981 / 05.05.1981 does not bear any attestation of the signatures of the plaintiffs by any witness. It is alleged that since a document relating to immovable property requires signatures to be attested by two witnesses, this requirement is not fulfilled in respect of the agreement to sell dated 23.04.1981 / 05.05.1981 inasmuch as the plaintiffs' signatures are not properly attested. It is also submitted that the signature of the defendant No. 1 is also attested by only one witness, which, according to the defendant No. 1 is, irregular and the said agreement suffers from fatal infirmities and is suggestive of the fact that the same was merely a record of the broad points for discussion and was not meant as a legal and enforceable document. It is also submitted that the agreement to sell has blanks in paragraph 16 where the boundaries of the property are described. 8. It was also stated in the written statement that "the possession of the plot detailed herein below has been given to the purchaser as contractor for construction under a contract for construction executed between the parties.." It is further averred that the alleged agreement for building construction dated 23.04.1981 / 05.05.1981 was void ab initio and that, thereforee, possession of the said plot had been illegally taken by the plaintiffs and they continue to be in illegal occupation thereof. It is also stated in the written statement of the defendant No. 1 that the said agreement to sell and the alleged agreement for building construction were repudiated by the defendant No. 1 through the legal notice of her advocate Mr Gopendra Nath Dutta dated 03.11.1988 and, as such, the present suit, which was filed on 13.01.1992, was barred by limitation inasmuch as the three-year period taken from 03.11.1988 expired on 03.11.1991. It is stated that the confirmations / acknowledgments dated 31.03.1984, 30.03.1987 and 29.03.1990 issued by Mr Riazuddin, father of the plaintiffs, as alleged power of attorney holder of the defendant No. 1, are collusive and in a set pattern and the same appeared to have been back dated at the instance of the plaintiffs. It has also been averred that the alleged power of attorney in favor of Mr Riazuddin was ab initio void because it related to the said agreement to sell and the alleged agreement of building construction which were also ab initio illegal and void. The defendant No. 1 also alleged that the building construction agreement was void because the same was executed in Calcutta, whereas the stamp paper was purchased at New Delhi as also because there was no meeting of minds and as indicated by the several blanks left in the agreement in respect of material aspects. 9. On the basis of the aforesaid pleadings and the documents filed by the parties, the following issues were framed on 07.01.1994: 1. Whether the alleged agreement to sell dated 23.4.81/5.5.81 was never meant to be acted upon and as such, it is completely void ab initio for the reasons stated in paras 1(a) to 1 (h), (on pages 1 to 6 ) of the written statement ? 2. Whether the agreement with regard to the building construction is illegal for the reasons stated in paras 1 & 2, (on page 7) of the written statement? If so, its effect ? 3. Whether the agreement for building construction is void for lack of consideration as alleged in para 4 (on page 8) of the written statement ? 4. Whether the alleged agreement with regard to the building construction was repudiated through the notice of Mr. Gopender Nath Datta dated November 3, 1988 as alleged in para 5 (on page 9) of the written statement? If so, its effect ? 5. Whether the general power of attorney executed in favor of Shri Riaz-ud-din is illegal and invalid for the reasons stated in para 6 (on page 9) of the written statement? If so, its effect ?

6. Whether the plaintiff No. 1 and plaintiff No. 2 are in illegal occupation of property bearing No. A-226, New Friends Colony, New Delhi, for the reasons stated in para 7 (on page 10) of the written statement? 7. Whether the suit is barred by limitation as alleged (on pages 10 & 11) in the written statement ? 8. Whether this Court has got no territorial jurisdiction to hear the present suit as alleged in para entitled "Jurisdiction" (on page 11 of the written statement) ? 9. To what relief, if any, are the plaintiffs entitled ? An additional issue was also framed on 12.12.2007 with regard to the valuation of the suit and the same reads as under:Whether suit is not properly valued for the purposes of court fees and jurisdiction? OPD 10. Issue Nos. 5 and 8 which were raised at the instance of the defendant No. 1 were not pressed by the learned Counsel for the defendant No. 1 at the time of arguments. Issue No. 1 11. The agreement to sell dated 23.04.1981 / 05.05.1981 (Exhibit DW-1/P-1) is an admitted document. In her cross-examination, the defendant No. 1 as DW-1 has stated as under: I have seen the original agreement of sale. The same has been signed by me. It is exhibited as DW-1/P-1. This document has been witnessed by my husband. This has been signed by me on each page. Plaintiffs had not signed this document in my presence. I do not remember if besides the document exhibit DW-1/P-1, any other agreement to sell was executed by me. 12. In her cross-examination, the said witness has also admitted the receipt of sum of Rs 1,80,000/- by means of four bank drafts. The original receipts dated 05.05.1981 which are marked as exhibits P-3 and P-4 have been admitted to have been signed by her. She has also acknowledged that these receipts (Exhibit P-3 and Exhibit P-4) were witnessed by her husband and Mr K.K. Mehta. She also stated that she had executed the power of attorney in favor of Mr Riazuddin (Exhibit P-5). She stated that she has seen the original will and that the same was executed by her. She stated that Exhibit P-6 is a copy of the said will. She stated that the original will was duly registered before the Sub-Registrar. The said document also bears her thumb impression. She has also stated that the three undated powers of attorney had been signed by her though they had not been attested by anyone. The said powers of attorney are exhibited as Exhibit DW-1/P-2 to DW-1/P-4. She also admitted to have seen the documents which have been described as affidavits and that they had all been signed by her. Though, she stated that they did not bear any date and they contained several blanks. The said documents have been exhibited as Exhibit DW-1/P-5 to DW-1/P-8. The document which purports to be an indemnity bond was also admitted to have been signed by her. The same is exhibited as Exhibit DW-1/P-12. She has, however, stated that she did not object to these documents at the time of signing, as according to her, these documents did not have any validity till such time the final agreement was arrived at in respect of the property in question. She also admitted to signing the building construction agreement, a copy whereof was exhibited as Exhibit D-1. The original document has been exhibited as Exhibit DW-1/P-13. She admitted that the letters dated 25.09.1989 and 03.08.1989 which have been exhibited as Exhibit DW-1/P-14 and DW-1/P15 appear to have been written by her and she could not give any Explanationn as to why she had written these letters. 13. From the aforesaid, it is apparent that the agreement to sell dated 23.04.1981 (Exhibit DW-1/P-1) was, in fact, signed by the parties, though the plaintiffs had signed the said agreement in Delhi and the defendant No. 1 had signed it on 05.05.1981 at Calcutta. The two receipts dated 05.05.1981 (Exhibit P-3 and Exhibit P-4) for the amounts of Rs 90,000/each received from plaintiff No. 2 and Plaintiff No. 1 respectively have been admitted by the defendant No. 1. The defendant No. 1 has also admitted Exhibit P-5 which is a registered general power of attorney in favor of Mr Riazuddin. She has also admitted the registered will (Exhibit P-6) executed by her as also Exhibit D-1 which is the agreement for building construction, Exhibit DW-1/P-3 which is a one page general power of attorney and Exhibit P7 which is a registered special power of attorney in favor of Mr Riazuddin, inter alia, authorizing him to apply for permission to sell and to execute the sale deed. 14. PW-1 (Mr Mohd. Zaki) in his examination-in-chief, inter alia, stated that the plaintiffs were his nephews being the sons of his brother Mr Riazuddin. He stated that he is a resident

of A-177, New Friends Colony, New Delhi. The plaintiffs were also interested to acquire a plot in New Friends Colony and that they had asked him to get them one such plot. He stated that there was one plot bearing No. A-226 which was available for sale but on the same terms and conditions of execution of documents, such as power of attorney, etc. He stated that Mr K.K. Mehta introduced one property broker by the name of Mr Gulshan Kumar. The plot was informed to be owned by Smt. Vimla Sethi (Defendant No. 1) of Calcutta. The witness further stated that the plaintiffs saw the plot in question and approved the same. They had agreed to purchase the said plot for a sum of Rs 1,80,000/- in 1981 and the payment was desired to be made by way of bank drafts on 05.05.1981. The plaintiffs had got the drafts made on 04.05.1981. He further stated that on the evening of 04.05.1981, he was given four bank drafts by Mr Anisuddin (plaintiff No. 1) and on 05.05.1981, he (Mr Zaki) and Mr Mehta flew to Calcutta and went to the residence of Mrs Vimla Sethi (defendant No. 1). There, Mrs Vimla Sethi and her husband (Mr S.P. Sethi) were present. The said bank drafts were given to Mr S.P. Sethi. Some of the documents duly prepared at Delhi were taken there and some other documents were to be prepared at Calcutta. Those documents were shown to Mrs Vimla Sethi and her husband. They approved the already prepared documents and also the format of those documents which were to be prepared there. Thereupon, the remaining documents were prepared at Calcutta. All the documents were signed by Mrs Vimla Sethi and at that time her husband (Mr S.P. Sethi) and Anr. person by the name of Tony or Tomy, who was probably their employee, was also present. The said witness stated that he was acting on the deal on the implied authority of his nephews and also because he had experience of dealing with such a property as he had already purchased one such plot and also knew Mr Mehta. 15. In his cross-examination, the said Mr Zaki (PW-1) stated that Exhibit DW-1/P-1 was signed by Mrs Sethi at point 'X-1' at Calcutta. The same was signed by Mr Anisuddin and Mr Khalid Riaz at point "X-2" at Delhi on his return from Calcutta. Mr Sethi had signed the same as a witness at point "X-3" in Calcutta at the time of signature of Mrs Sethi. Exhibit DW-1/P-13 (Agreement of building construction) was also stated to have been signed by Mrs Sethi and her husband at Calcutta by the said witness. He stated that the place at point X-1 in the said document which was meant for the signature of the contractor was left blank. 16. The plaintiff No. 1 (Mr Anisuddin) deposed as PW-2. In his cross-examination, he stated that the said documents had been signed on the return of the same from Calcutta. He also stated that the possession of the plot in question was given to the plaintiffs by the society after the finalisation of the deal and the same was taken immediately after the deal though the exact date could not be recalled. The said witness also stated that they constructed on the plot as per the documents executed by the defendant No. 1. 17. Mr Riazuddin, the father of the plaintiffs deposed as PW-3. In his examination-in-chief, he stated that two general powers of attorney and one special power of attorney were executed by Mrs Vimla Sethi in his favor in respect of the said plot. The said powers of attorney were exhibited as Exhibits DW-1/P-2, DW-1/P-3 and DW-1/P-4 respectively. He stated that he had been acting as per these powers of attorney in respect of the premises in question and that none of the powers of attorney were ever revoked or cancelled by Mrs Vimla Sethi. In his cross-examination, the said witness [Riazuddin (PW-3)] stated that the powers of attorney were executed by Mrs Vimla Sethi in his favor at the time of the deal of the plot in question and on receipt of the payment. He further stated that the payments were made by his sons Anisuddin and Khalid Riaz from their accounts. He also stated that it is wrong that a notice dated 03.11.1988 was issued by Mrs Sethi invoking / cancelling the powers of attorney in his favour. He never received any such notice. PW-3 had been recalled for further statement when he stated that the confirmation / acknowledgement letters dated 31.03.1984, 30.03.1987 and 29.03.1990 were signed by him on the revenue receipts and he identified the signatures on these three documents being Exhibits PX-1 to PX-3. He stated that he signed these documents as attorney of Smt Vimla Sethi and that he gave these three documents to the plaintiffs. In his further cross-examination, the said witness denied that Exhibit PX-1 and Exhibit PX-2 were executed after 03.11.1988 or that they were ante dated and volunteered that, in fact, the documents were executed on the dates mentioned on them. 18. The agreement to sell (Exhibit DW-1/P-1) clearly showed the defendant No. 1 as the owner / vendor and the plaintiffs as the purchasers / vendees in respect of the leasehold rights in the plot No. A-226, New Friends, Colony, New Delhi measuring 481.5 sq. yds. The recitals in the said agreement to sell clearly indicate that the vendor had agreed to sell, convey and transfer her rights, title and interest in the said plot of land for the total consideration of Rs 1,80,000/- in favor of the purchasers and that the purchasers had also agreed to purchase the right, title and interest of the owner for the said consideration. Clause 1 of the said agreement stipulated that in consideration of the said sum of Rs 1,80,000/-, the defendant No. 1 thereby agreed to transfer the plot as well as the building structure to be put on the plot of land in question in favor of the purchasers (plaintiffs). By virtue of clause 2 of the said agreement, it was acknowledged by the defendant No. 1 that

the plaintiffs had paid the sum of Rs 1,80,000/- through four bank drafts dated 21.04.1981, 04.05.1981, 04.05.1981 and 04.05.1981 for which separate receipts had also been issued as full payment of the sale consideration. 19. Clause 4 of the agreement to sell indicates that the possession of the plot detailed therein had been given to the plaintiffs as contractors for construction under a contract for construction executed between the parties and the plaintiffs had been fully authorised to raise / construct the building and further to use the building for themselves or the plaintiffs could let out the same to anybody in part or whole as they liked and they would be entitled to get the rent from the tenants and the defendant No. 1 would not be entitled to charge anything as rent and that the house tax, property tax and lease money or any other tax or levy would also be payable by the purchasers (plaintiffs). Clauses 6 and 7 of the said agreement to sell carry the expression - "the plot hereby agreed to be sold". Clause 8 stipulates that the ground rent from the date of the agreement would be payable by the purchasers, but shall be paid in the name of the owner till such time as the sub-lease is not transferred in favor of the purchasers. Clause 10 of the agreement specifically provides that the unearned increase would be payable by the purchasers to the DDA or L&DO or the Delhi Administration and that the purchasers alone shall have the liability to make this payment. Clause 11 provides that the expenses for the transfer, stamp duty and the corporation tax shall be payable by the purchasers from the date of the agreement. Clause 14 stipulated that the owner would execute a general power of attorney in the name of the purchasers or their nominee / nominees in respect of the said plot which would be irrevocable till the said plot is not transferred, registered, complete vacant possession given and the property mutated in the name of the purchasers or their nominees in the records of the DDA. 20. From the pleadings, documents and evidence on record, it is apparent that the agreement to sell (Exhibit DW-1/P-1) was executed by the parties. It is, of course, true that the said agreement was signed by the defendant No. 1 in Calcutta on 05.05.1981 and subsequently, by the plaintiffs in Delhi. But this does not enable the defendant No. 1 to detract from the position that the said agreement to sell had been executed by the parties. Under the said agreement to sell, the defendant No. 1 had agreed to sell the plot in question to the plaintiffs for a total consideration of Rs 1,80,000/-. It is an admitted position that the entire amount of Rs 1,80,000/- stood paid to the defendant No. 1 by the plaintiffs on 05.05.1981 itself through the four bank drafts referred to above and the receipts acknowledging such payments had been issued by the defendant No. 1. It has also been established through evidence that the plaintiffs were put into possession of the plot in question in 1981 itself. 21. The defendant No. 1 has attempted to raise several pleas as set out in paragraphs 1 (a) to 1(h) of the written statement to indicate that the agreement to sell was never meant to be acted upon as such. Once having admitted the execution of the agreement to sell, there was a heavy burden on the said defendant No. 1 to establish that the agreement to sell was not meant to be acted upon and was void ab initio. The reasons indicated in the written statement for claiming the agreement to sell to be void ab initio are untenable. The defendant No. 1 has not been able to discharge this heavy burden of showing that the agreement to sell was not meant to be acted upon. On the contrary, the plaintiffs have been able to establish conclusively that the agreement to sell had been executed by the parties. They have also been able to establish that the entire sale consideration of Rs 1,80,000/had been paid on 05.05.1981 itself and even possession in respect of the plot was with the plaintiffs. 22. As stated above, the defendant No. 1 had sought to suggest that the possession was taken illegally by the plaintiffs, however, there is nothing to show that for all the years between 1981 and 1992, when the present suit came to be filed, the defendant No. 1 ever protested with regard to the possession of the plaintiffs. The argument with regard to the defendant No. 1 having signed the documents in Calcutta and the plaintiffs having signed it in Delhi and, thereforee, the same being void, is clearly untenable. Once the parties have admitted that they executed the documents and affixed their signatures thereto, it is immaterial as to whether they signed the said documents at the same place or at different places. The significance of signing the document is that they accept the terms and conditions set out therein. Both the plaintiffs as well as the defendant No. 1 having signed the agreement to sell (Exhibit DW-1/P-1) are bound by it. It must also be noted that the intention of the parties was to enter into the agreement to sell and for the defendant No. 1 to ultimately convey the said property to the plaintiffs by executing a sale deed. This can easily be discerned not only from the clear and express terms of the agreement to sell (Exhibit DW-1/P-1) as well as from the other documents executed by the defendant No. 1. The defendant No. 1 executed the receipts dated 05.05.1981 (Exhibit P-3 and Exhibit P-4) in respect of Rs 90,000/- each. She executed the registered general power of attorney (Exhibit P-5), the registered will (Exhibit P-6), General Power of Attorney (Exhibit DW-1/P3), registered special power of attorney (Exhibit P-7). All these documents clearly go to show the clear intention of the parties that the agreement to sell was binding on them and that it was meant to be acted upon. The agreement to sell (Exhibit DW-1/P-1) dated

23.04.1981 / 05.05.1981 was a valid and binding agreement which had been entered into after a clear meeting of minds. 23. Consequently, Issue No. 1 is decided against the defendant No. 1 and in favor of the plaintiffs. Issue Nos. 2, 3 and 4 24. These issues relate to the building construction agreement and have been raised at the instance of the defendant No. 1. The present suit is concerned with the specific performance of the agreement to sell dated 23.04.1981 / 05.05.1981 and is not seeking the specific performance of the building construction agreement. In any event, from the discussion of the documents and evidence under Issue No. 1, it is apparent that the construction agreement was entered into by and between the parties to permit the plaintiffs to construct on the plot in question even prior to the same being formally transferred to them through a registered sale deed. Since there were various obstacles for the conveyance of the property to the plaintiffs, signatures on the construction agreement had been obtained from the defendant No. 1. The fact of the matter is that the defendant No. 1 had agreed to sell the plot in question to the plaintiffs and the plaintiffs, in turn, had paid the entire sale consideration as well as obtained possession of the said plot. Thereafter, the plaintiffs constructed the residential building standing thereon at their own expense and have been residing in the same since its completion in 1984. Whether the building construction agreement was legal or not or was repudiated through the notice of Mr Gopendra Nath Dutta dated 03.11.1988 is not at all material for the purposes of coming to a conclusion with regard to the reliefs prayed for by the plaintiffs. Even if it is assumed that there was no agreement with regard to building construction, this does not, in any way, advance the cause of the defendant No. 1. She cannot resile from the position that she entered into the agreement to sell, that she received the entire sale consideration, that possession was handed over to the plaintiffs, that the plaintiffs constructed the residential building thereon at their own expenses, and that the plaintiffs have been residing in the said building since its completion in 1984 without any hindrance from the defendant No. 1. 25. As such, I hold that Issue Nos. 2, 3 and 4 are irrelevant for the purposes of the present suit. Issue No. 6 26. This issue pertains to the occupation of the suit property by the plaintiffs. While discussing Issue No. 1, I have already found that the plaintiffs' occupation of the property in question is entirely legal. This issue is also decided in favor of the plaintiffs and against the defendant No. 1. Issue No. 7 27. It has been contended on behalf of the defendant No. 1 that the present suit is barred by limitation. According to the defendant No. 1, Article 54 of the Schedule to the Limitation Act, 1963 needs to be considered for computing the period of limitation. The said Article 54 stipulates that the period of limitation for a suit for specific performance of a contract is three years and the time from which the period begins to run is - "the date fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused". It was contended on behalf of the defendant No. 1 that in the plaint, it has been averred that the plans were prepared and the construction was raised and the completion certificate was issued on 21.08.1984 and that the defendant No. 1 had signed the documents indicating that she was unable to pay cost of construction and that the plaintiffs should get the sale deed registered in their names. It was, thereforee, contended on behalf of the defendant No. 1 that even as per the plaintiffs' case, the refusal on the part of the defendant No. 1 was on 21.08.1984 and that should be construed as the starting point of limitation. Three years from that date would expire on 20.08.1987, whereas the suit was filed on 13.01.1992 and, thereforee, the same is time barred. 28. The reference to the document signed by the defendant No. 1 indicating her inability to pay the cost of construction is to Exhibit PW-1/7. This is a document which has several blanks at marks X-1 to X-7. This document had been signed by the defendant No. 1 in 1984. This document also lends support to the conclusion that the building construction agreement was only sought to be a device to enable the plaintiffs to construct on the said plot even prior to the registration of the sale deed in their favour. Nothing turns on this document and the same cannot be regarded as a refusal of performance on the part of the defendant No. 1. This argument of the defendant No. 1 is, thereforee, rejected. 29. It has then been contended on behalf of the defendant No. 1 that by the defendant No. 1's lawyer's notice dated 03.11.1988 (Exhibit D-2), it had been indicated to the plaintiffs

that the agreement to sell and agreement to build would not be binding unless these were re-negotiated and in particular the agreement to sell. It was also indicated in the said notice that the agreement to build would be deemed to be void so far as the defendant No. 1 was concerned till the said agreements are re-negotiated. It was, thereforee, contended on behalf of the defendant No. 1 that the letter dated 03.11.1988 constituted a refusal of the performance of the agreement between the parties and would, thereforee, be the starting point of limitation. Three years from that date would expire on 03.11.1991, whereas the suit has been filed on 13.01.1992 and, thereforee, would be barred by limitation. 30. This argument, though appearing to be attractive, is not acceptable. The learned Counsel for the defendant No. 1 failed to refer to various letters and more importantly the letter dated 03.08.1991 (Exhibit DW-1/P-15) issued by the defendant No. 1 to the plaintiffs. In the said letter, there is a reference to the agreements entered into on or about 23.04.1981 and in that context, the defendant No. 1 has stated: While in equity, justice and law, all those agreements signed on or about 23rd April, 1981 are fast loosing relevance because of having not been acted upon for over a decade, I am still willing to cooperate with you and your brother in the above matter so that whatever was agreed upon between us can be acted atleast in the spirit in which it was agreed upon but without any loss to me materially or otherwise. Since most of the items in the agreement have become out-dated because of not having been acted upon, I am ready to sign any new agreements also to give effect to our understandings, provided I do not suffer any loss in the process. xxxx xxxx xxxx xxxx xxxx

I am ready to cooperate with you in every way still so that the spirit of the agreement can be honoured but it does look to me that you are least appreciative of my difficulties created solely by your inaction over the agreements for the last ten years continuing with your disregard of my problems. 31. This letter clearly establishes that it is the defendant No. 1 who has been attempting to resile from the original agreement of 23.04.1981/05.05.1981. Perhaps because the property prices had gone up in the meanwhile, the defendant No. 1 was trying to re-negotiate a better deal for herself, forgetting that she had accepted the entire sale consideration upon a solemn promise to execute the sale deed when the plaintiffs required her to do so. This letter also clearly indicates that the story of repudiation / refusal was not tenable because the defendant No. 1 clearly indicated that she was still willing to cooperate with the plaintiffs so that whatever was agreed upon between them could be acted upon at least in the spirit in which it was agreed upon. The expression "but without any loss to me materially or otherwise", is clearly indicative of the fact that the defendant No. 1 wanted to make some extra money out of the transaction which had been concluded. This letter clearly indicates that on 03.11.1988, there was no refusal to perform the contract, but only a desire to renegotiate so as to enable the defendant No. 1 to receive something more than what had been agreed upon. The same sentiment is discernible from this letter dated 03.08.1991 (Exhibit DW-1/P-15). 32. thereforee, I hold that the starting point of limitation for the purposes of filing of the present suit would not be 03.11.1988 as alleged by the defendant No. 1. On the other hand, the plaintiffs have averred in paragraphs 5 and 6 of the plaint that they insisted on sticking to the old agreements and informed the defendant No. 1 by their letter dated 23.11.1991 that she should obtain permission of the DDA and the clearance certificate from the income tax department for executing the necessary sale deed which were the only two matters which remained to be completed. The plaintiffs averred that by their letter dated 23.11.1991 they called upon the defendant No. 1 to execute the necessary sale deed. The defendant No. 1 has failed to do so and, thereforee, the plaintiffs were compelled to file the present suit. In the written statement, there is no denial by the defendant No. 1 of the receipt of the letter dated 23.11.1991 calling upon the defendant No. 1 to execute the sale deed after obtaining permission from the DDA and the clearance certificate from the income tax department. In view of the provisions of Order 8 Rule 3 of the Code of Civil Procedure, 1908, every denial has to be specific. Order 8 Rule 6 thereof provides that every allegation of fact in the plaint, if not denied specifically or by necessary implication, or stated to be not admitted in the pleading of the defendant, shall be taken to be admitted except as against a person under disability. A specific allegation has been made by the plaintiffs with regard to the letter dated 23.11.1991 and the demand raised therein for executing the necessary sale deed. This has not been denied by the defendant No. 1. Consequently, the same would have to be construed as having been admitted by the defendant No. 1. The position, thereforee, is that the plaintiffs requested for execution of the sale deed by their letter dated 23.11.1991 which has not been complied with by the defendant No. 1. The starting point of limitation, if at all, would be subsequent to 23.11.1991 when the defendant No. 1 received the said letter of 23.11.1991 and failed to act thereupon thereby constituting refusal to perform her part of the agreement by her conduct. The suit was filed on 13.01.1992 and

would, thereforee, clearly be within time. The suit is, thereforee, not barred by limitation and this issue is also decided in favor of the plaintiffs and against the defendant No. 1. Additional Issue 33. The learned Counsel for the defendant No. 1 raised this issue with regard to the suit being improperly valued for the purposes of court fee and jurisdiction. Though this issue was not seriously agitated, it was contended on behalf of the defendant No. 1 that the suit was actually one for declaration and consequential relief and, thereforee, ad valorem court fee on the value of the plot on the date on which the suit had been filed ought to have been paid. However, I find that the suit is actually one for specific performance of the agreement to sell dated 23.04.1981/05.05.1981 and it has been properly styled as a suit for specific performance. Consequently, this issue is also decided in favor of the plaintiffs and against the defendant No. 1. Issue No. 9 (Relief) 34. It is an admitted position that the plaintiffs are in possession of the suit property. They are, thereforee, entitled to a declaration that they are in possession thereof. The plaintiffs have clearly established the execution of the agreement to sell (Exhibit DW-1/P-1) dated 23.04.1981 / 05.05.1981. It has also been established that the plaintiffs have paid the entire sale consideration of Rs 1,80,000/- to the defendant No. 1. Possession of the said suit property was also handed over the plaintiffs. The plaintiffs had applied to the defendant No. 1 specifically to perform the agreement on her part, but the defendant No. 1 has not done so. The plaintiffs have also demonstrated that they have been and still are ready and willing to specifically perform the agreement on their part of which the defendant No. 1 has had notice. Despite this, the defendant No. 1 has not executed the sale deed. The plaintiffs have already performed their part of the contract and nothing more is required of them. It is only the defendant No. 1 who has to execute the sale deed and complete the transaction. Accordingly, the plaintiffs are entitled to the reliefs prayed for in sub-paragraphs 'a' and 'b' of paragraph 12 of the plaint. The suit is decreed accordingly with costs.

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MANU/SC/7734/2008 Equivalent Citation: 2008(6)ALLMR(SC)904, 2008(9)SCALE144 2009(2)KarLJ1, (2008)7MLJ550(SC),

IN THE SUPREME COURT OF INDIA Civil Appeal No. 3635 of 2008 (Arising out of SLP (C) No. 4055 of 2006) Decided On: 16.05.2008 Appellants: Ranganayakamma and Anr. Vs. Respondent: K.S. Prakash (D) by L.Rs. and Ors. Hon'ble S.B. Sinha and Lokeshwar Singh Panta, JJ. Counsels: For Appellant/Petitioner/Plaintiff: G.V. Chandrashekar, Advs Judges:

Chandrasekhar, N.K.

Verma and Anjana

For Respondents/Defendant: S.S. Javali, Sr. Adv., T.N. Rao, S. Balaji, Madhusmita, V.H. Ron and Gurudatta Ankolekar, Advs. Subject: Property Subject: Limitation Catch Words Mentioned IN Acts/Rules/Orders: Partnership Act, 1932; Indian Contract Act - Sections 2, 16, 23 and 25; Limitation Act Section 3 - Articles 55, 59, 65 and 110; Transfer of Property Act, 1882 - Sections 122 and 123;Land Charges Act, 1925 - Section 13(2); Specific Relief Act - Section 31; Companies (Court) Rules - Rule 6; Civil Procedure Code (CPC) - Section 151 - Order 6, Rules 4 and 17 Cases Referred: Mst. Rukhmabai v. Lala Laxminarayan and Ors. MANU/SC/0186/1959; Hari Shankar Singhania and Ors. v. Gaur Hari Singhania and Ors. MANU/SC/1686/2006; Ram Charan Das v. Girjanandini DeviMANU/SC/0358/1965; Govt. of A.P. and Ors. v. M. Krishnaveni and Ors. MANU/SC/8409/2006; Ramdev Food Products (P) Ltd. v. Arvindbhai Rambhai Patel MANU/SC/3725/2006; Prem Singh v. Birbal and Ors. MANU/SC/8139/2006; A.C. Ananthaswamy v. Boraiah MANU/SC/0655/2004; Chief Engineer, M.S.E.B. and Anr. v. Suresh Raghunath Bhokare MANU/SC/1077/2004;Ramesh B. Desai and Ors. v. Bipin Vadilal Mehta and Ors. MANU/SC/2996/2006; Sangramsinh P. Gaekwad and Ors. v. Shantadevi P. Gaekwad (Dead) Through LRs. and Ors.MANU/SC/0052/2005; Sundar Sahu Gountia and Ors. v. Chamra Sahu Gountia and Ors. MANU/OR/0025/1954; S. Shanmugam Pillai v. K. Shanmugam PillaiMANU/SC/0398/1972; Kale v. Dy. Director of ConsolidationMANU/SC/0529/1976; Ganpatbhai Mahijibhai Solanki v. State of Gujarat and Ors. MANU/SC/7281/2008; Smt. Manali Singhal and Anr. v. Ravi Singhal and Ors.MANU/DE/0616/1998; Kuppuswamy Chettiar v. A.S.P.A. Arumugam Chettiar and Anr. MANU/SC/0211/1966; Chief Controlling Revenue Authority, Referring Officer v. Rustorn Nusserwanji Patel MANU/TN/0223/1968; The Chief Controlling Revenue Authority, Board of Revenue, Madras v. Dr. K. Manjunatha Rai MANU/TN/0248/1977; Midland Bank & Trust Co. Ltd. v. Green; Mt. Latif Jahan Begam v. Md. Nabi Khan MANU/UP/0228/1931; Gauri Shanker v. Hindustan Trust (Pvt.) Ltd. and Ors. MANU/SC/0613/1972; Bhikhubhai Vithlabhai Patel and Ors. v. State of Gujarat and Anr. MANU/SC/7399/2008; John Tinson and Co. Pvt. Ltd. and Ors. v. Mrs. Surjeet Malhan and Anr. MANU/SC/0331/1997; Bay Berry Apartments Pvt. Ltd. and Anr. v. Shobha and Ors. MANU/SC/8566/2006; Utha Moidu Haji v. Kuningarath Kunhabdulla and Ors. MANU/SC/8733/2006 Prior History / High Court Status: From the final Judgment dated 21.9.2005 of the High Court of Karnataka at Bangalore in R.F.A. No. 605/1997 (MANU/KA/0454/2005)

Disposition: Appeal dismissed Citing Reference:

Mst. Rukhmabai v. Lala Laxminarayan and Others MANU/SC/0186/1959 Hari Shankar Singhania and Others v. Gaur Hari Singhania and Others Ram Charan Das v. Girjanandini Devi MANU/SC/0358/1965 Govt. of A.P. and Others v. M. Krishnaveni and Others MANU/SC/8409/2006 Ramdev Food Products (P) Ltd. v. Arvindbhai Rambhai Patel MANU/SC/3725/2006 Prem Singh v. Birbal and Others MANU/SC/8139/2006 A.C. Ananthaswamy v. Boraiah MANU/SC/0655/2004 Chief Engineer, M.S.E.B. and Another v. Suresh Raghunath Bhokare MANU/SC/1077/2004 Ramesh B. Desai and Others v. Bipin Vadilal Mehta and Others MANU/SC/2996/2006 Sangramsinh P. Gaekwad and Others v. Shantadevi P. Gaekwad (Dead) Through LRs. and Others Discussed Sundar Sahu Gountia and others v. Chamra Sahu Gountia and others MANU/OR/0025/1954 S. Shanmugam Pillai v. K. Shanmugam Pillai Kale v. Dy. Director of Consolidation Hari Shankar Singhania v. Gaur Hari Singhani Ganpatbhai Mahijibhai Solanki v. State of Gujarat and Ors. Smt. Manali Singhal and another v. Ravi Singhal and others MANU/DE/0616/1998 Kuppuswamy Chettiar v. A.S.P.A. Arumugam Chettiar and Another MANU/SC/0211/1966 Chief Controlling Revenue Authority, Referring Officer v. Rustorn Nusserwanji Patel MANU/TN/0223/1968 Discussed The Chief Controlling Revenue Authority, Board of Revenue, Madras v. Dr. K. Manjunatha Rai MANU/TN/0248/1977 Discussed Midland Bank & Trust Co. Ltd. v. Green Mt. Latif Jahan Begam v. Md. Nabi Khan MANU/UP/0228/1931 Gauri Shanker v. M/s. Hindustan Trust (Pvt.) Ltd. and Others Bhikhubhai Vithlabhai Patel & Ors. v. State of Gujarat & Anr. John Tinson and Co. Pvt. Ltd. and others v. Mrs. Surjeet Malhan and another MANU/SC/0331/1997 Discussed Bay Berry Apartments Pvt. Ltd. & Anr. v. Shobha & Ors. Utha Moidu Haji v. Kuningarath Kunhabdulla and Ors. JUDGMENT S.B. Sinha, J. 1. Leave granted. 2. This appeal is directed against the judgment and order dated 21 st September, 2005 passed by a Division Bench of the Karnataka High Court in R.F.A. No. 605 of 1997 dismissing an appeal preferred from the judgment and decree dated 27th May, 1997 passed

by the XII Additional City Civil Judge, Bangalore in Original Suit No. 1760 of 1990 partly decreeing the suit for partition and separate possession. We may, at the outset, notice the genealogical tree of the family which is as under:

Kasetty Rangappa Widow Smt. Narmma Lakshmamma | Naramma | 2ndwife _________________________________|________________________________ | | | | | | | | | | Smt. K. Sreeni K. Harida K.R. K.R. Venkatamm Sreenivasulu | Salu Venkatesulu | ___________________|_______________________________ | | Smt. Singaramma Smt. Venkatalakshamma 1st wife 2nd wife Children of the 1st Wife 1. 2. 3. 4. 5. 6. 7. 8. Smt. Jayamma, Deft. No. 3 Smt. Kanthamma, Plff. No. 1 Smt. Ranganayakamma, Plff No. 2 Lakshamamma 2nd wife Smt.Naramma Devi, Deft. No. 4 Lakshmi Smt. Venajakshi Sri K.S. Prakash, Deft. No. 1 Sri K.S. Ramesh, Deft. No. 2 Smt. Sarojamma, Deft. No. 5 K. Harida Sreenivasa Pasad Smt. K. Sreeni Venkatamma Smt. Seethqalakshmi, Deft. No. 6 Children of the 2nd Wife 1. Sri K.S. Mohan 2. Smt. Susheela (Late) 3. Smt. Bhagyalakshmi 4. Smt. Lakshmi Devi 5. Sri K.S. Sudarshan 6. Smt. Saraswathi 7. Smt. Rukmini 8. Sri K.R. K.R.

9.

9. Smt. Padmavathi Salu Venkatesulu Sreenivasulu

10. Smt. Bharathi, Deft. No. 7 11. Smt. Kum. Shoba, Deft. No. 8 Smt. Singaramma 1st wife Smt. Venkatalakshamma 2nd wife.

3. We are concerned herein with the branch of K. Sreenivasulu. He had two wives, the first wife being Singaramma. Through his first wife Singaramma, he had eleven children. Except Venajakshi, they are parties to the suit. Kanthamma and Ranganayakamma are the plaintiffs. Through his second wife, Shri K. Sreenivasulu had nine children. 4. Allegedly there was a partnership firm through which K. Sreenivasulu was doing business in silk sarees. Whether the said partnership was a firm constituted under the Partnership Act, 1932 or a Hindu joint family Firm is in dispute. However, the said firm was said to have been dissolved. Thereafter K. Sreenivasulu had been carrying on the said business either by himself or as a `Karta' of the joint family in silk sarees. Very valuable properties were acquired by him. Three items of the said properties are involved in this appeal. Item No. 1 is said to be worth 1 crore. Item Nos. 2 is stated to be worth 3 crores, whereas Item No. 4 is said to be worth 1 crore. Although valuations of the said properties are stated by the contesting respondents i.e. respondents Nos. 1 & 2 in their written statement so as to put forth a contention that the valuation of the suit properties as disclosed by the plaintiff being Rs. 10,000/- was not correct and on the aforementioned amounts the court fee would be payable, but there cannot be any doubt whatsoever that the properties are valuable. As through the first wife, Sreenivasulu did not have any male issue, he married Venkatalakshamma. Allegedly item Nos. 2 and 3 of the suit properties were purchased in

the name of Sringaramma. The parties are at issue whether the said properties were purchased from the joint family funds or in the name of Srirangama for her own benefit. Indisputably, again item No. 1 was purchased by Sreenivasulu in his own name. He died on 27th December, 1970. The family allegedly continued to remain joint. One of the daughters of Sreenivasulu being Vanajakshi released her rights by getting a consideration of Rs. 39,615.79. Respondents Nos. 1 and 2 herein, sons of K. Sreenivasulu through Singaramma were the junior members of the family. At the time of her death of Sreenivasulu, they were minors. 5. Indisputably, a suit for partition being O.S. No. 2459 of 1982 was filed by the first respondent K.S. Prakash besides others. Whereas, according to the appellants, the said suit was filed by way of machination on the part of respondent No. 1 herein but admittedly all the parties were plaintiffs therein. 6. The plaint in the said suit discloses that Sreenivasulu and his brothers partitioned their properties in the year 1957 who constituted a Joint Hindu Family. The said Joint Hindu Family had extensive immovable properties in the towns of Bangalore and Darmavara. Allegedly some immovable properties falling in the share of K. Sreenivasulu are still joint. A coparcenary was constituted between him and his sons. Properties were purchased by him out of the nucleus of the immoveable properties, which fell to the share of Sreenivasulu in the said partition meaning thereby that the partition took place in 1957 and several other moveable and immovable properties were acquired in the name of Sreenivasulu and other members of the families. They were in joint possession. Ten items of immovable properties, however, allegedly were the subject matter of joint sale for the purpose of discharge of income tax and wealth tax liabilities. They have been excluded from partition. It was furthermore alleged that some other properties had also been transferred and deeds of sale were executed by the Bangalore Development Authority in favour of plaintiff Nos. 1 and 2 therein. Paragraph 12 of the said plaint reads as under: 12. Thus, item No. 1 to 8 (one to eight) mentioned in the plaint are the properties now available and standing in the names of persons referred to above. This being a suit for general partition even though some of the properties are in the name of individual members of the family and as per records, but nevertheless shown in detail with a view to avoid unnecessary controversies and to effect just, fair and equitable partition among the members of the family. 7. Indisputably both the branches of Sreenivasulu entered into a compromise, i.e., amongst the children of the first and the second wives. Both the branches divided the properties into half and half. The said compromise was recorded. A final decree was passed on the basis thereof, directing: In terms of compromise, it is ordered and decreed that the plaintiffs are the owners of the properties shown in items 1, 2(a) & 2(b) and 3 in the schedule hereto which are allotted to their shares. It is further ordered and decreed declaring that the defendants are the owners of the properties shown in items 4 and 5 in the schedule hereto which are allotted to their share. It is further ordered and decreed that properties in items 6 and 7 of the suit schedule properties shall be sold by plaintiffs and defendants and the tax arrears viz., Income Tax, Wealth Tax and Capital Gain Tax in respect of the said items of the Schedule property that is due and payable by the Hindu undivided family be cleared and discharged out of the sale price of the same and further out of the refund amount as shown in item No. 8 of the schedule properties. It is hereby recorded that since the value of items 4 and 5 allotted to the defendants is less than the value of properties allotted to the plaintiffs, the plaintiffs have this day paid to the defendants a sum of Rs. 80,000/- (Rupees eighty thousand only) which together with Rs. 30,000/- (Rupees thirty thousand only) paid earlier by the plaintiff in all amounts to Rs. 1,10,000/- (Rupees one lakh ten thousand only). It is further ordered and decreed that in case the amounts realized by sale of items 6 and 7 and item 8 are insufficient to clear the Tax arrears, the plaintiffs shall bear 2/5 share, the defendants shall bear 3/5 share of the tax liability and in case the amounts realized by the sale and refund claimed in respect of the said properties are in excess of the Tax liability, the remaining balance amounts shall be shared by plaintiffs and defendants in the proportion of 2/5 and 3/5 share respectively. It is further ordered and decreed that the plaintiffs and defendants are not liable to each other with regard ti income accruing from the properties allotted to them and also for mesne profits. 8. Allegedly Singaramma was not keeping well. She underwent kidney operation at Vellore.

9. The plaintiffs-appellants alleged that respondent Nos. 1 and 2 used to take signatures them as well as others representing that the same were required for payment of tax and also for managing the properties. The said signatures used to be made as they then had immense faith in their brothers. A Power of Attorney was executed by the first appellant Ranganayakamma in favour of K.S. Prakash on 15 th July, 1983, in terms whereof he was authorized to enter into a partition on her behalf. A recital has also been made therein that Ranganayakamma, appellant No. 2 herein, had agreed to relinquish her right as per the agreement. Another Power of Attorney was executed by the 4 th defendant in favour of Singaramma 10. A deed of partition was executed on 5th August, 1983 in terms whereof Singaramma was allotted 1/3rd share in item No. 3 and rest of the properties were retained by the brothers. The sisters allegedly relinquished their share for a consideration of Re. 1/- only; the relevant parts whereof read as under: 1. The properties described in the Second Schedule hereunder are hereby allotted to the share of the parties of the First and Second Parts. 2. The property described in the Third Schedule hereunder is hereby allotted to the share of the party of the Eleventh part. 3. The parties of the Third, Fourth, Fifth, Sixth, Seventh, Eight, Ninth and Tenth parts do hereby relinquish their right to claim a share in the properties described in the First Schedule in consideration of payment to each of them of a sum of Re. 1/- by parties of the First, Second and Eleventh Parts the receipt of which they hereby acknowledge. 11. Singaramma died on 10th September, 1983. So far as 1/3rd share of Singaramma is concerned, no partition had taken place. However, a Special Power of Attorney was executed by the appellants on 20th December, 1983. In the said Power of Attorney detailed recitals had been made in regard to the source of the properties, the partitions which had taken place and the share of the sisters devolved on them from Singaramma which was calculated at 1/11th. 12. Indisputably, again a deed of lease was executed by plaintiff- appelalnt No. 2 herein in favour of M/s. Voltas Company Ltd. 13. According to the appellants, however, no deed of lease was executed by appellant No. 1, Ranganayakamma. A sum of Rs. 4,050/- was paid to Kanthamma, appellant No. 2, towards rent for the period 1.1.1986 to 31.07.1987. 14. According to the appellants when they came to learn about the fraudulent act(s) on the part of respondent Nos. 1 & 2 in getting the Power of Attorneys executed by them, they cancelled the same. They, thereafter, filed a suit for partition and separate possession claiming 1/10 th share each. The said suit was filed on 21st March, 1990 and was marked as O.S. No. 1760 of 1990. 15. A contention was raised therein that all properties acquired by Sreenivasulu were his self-acquired properties. The plaintiffs-appellants further contended that their brothers used to take their signatures on some papers as they enjoyed immense confidence in them as would appear from paragraph 6 of the plaint, the relevant portion whereof reads as under: 6 The said power of attorney was got executed by playing a fraud on the 2 nd plaintiff taking advantage of her innocence, ignorance and her sex and in the absence of her husband or any other reliable male member of the family. The second plaintiff was not aware of the contents of the said power-of-attorney nor were they read out to her. It was got executed in the Office of the Advocate of the defendants 1 and 2 and it was drafted and attested by the Advocates belonging to the said Firm of Advocates. Thereafter, in fraudulent abuse of the said power-of-attorney and on the basis of the fraudulent misrepresentations made to the first and second plaintiffs and defendants 3 to 8, an alleged deed of partition was got executed on 5.8.1983, again taking fraudulent advantage of the said innocent and ignorance of the plaintiffs and defendants 2 to 8, resulting in an unjust, unfair, unequal and fraudulent partition of the schedule properties. The plaintiffs and defendants 3 to 8 were never told by the defendants 1 and 2 that it was a partition deed which was got executed on 5.8.1983 and instead it was misrepresented as on earlier occasion that their signatures were necessary on the document for proper management of the properties and the estate of late K. Srinivasasalu. 16. Respondents, however, in their written statement denied and disputed the averments made in the plaint. They raised various contentions including the maintainability of the suit

as also the question of limitation. It was categorically stated that the suit properties were acquired by Sreenivasulu out of the properties allotted to him in the family partition amongst his brothers dated 22nd June, 1957. It was furthermore contended that the relinquishment of interests by the appellants and other sisters were out of love and affection. They further averred that upon the death of Singaramma the deeds of lease which were executed in respect of her share, vested in the plaintiffs-appellants. It was categorically stated that the Power of Attorneys were executed by the appellants voluntarily. Parties in support of their respective cases adduced their own evidence. The learned trial judge framed as many as 12 issues which are as under: 1. Whether the plaintiffs prove that the suit schedule properties are self acquired properties of the deceased Srinivas? 1(a). Whether the defendants prove that the suit schedule properties are the ancestral properties? 2. Does defendant No. 1 prove plaintiffs executing valid powers of attorney on 15.7.1983; 20.12.1983 and 5.8.1985? 3. Do the defendants 1 and 2 prove due execution of release deed dated 5.8.1983 by the plaintiffs for valid and proper consideration. 4. Do the defendants 1 and 2 prove partition deed dated 5.8.1983 is valid one? 5. Whether the plaintiffs and defendants 3 to 8 prove that the defendants 1 and 2 obtained partition deed dated 5.8.1983 by playing fraud? 6. Whether the plaintiffs are estopped from filing this suit due to decree in O.S. 2459/1982? 7. Whether the suit is barred by limitation? 8. Whether the suit is bad for non-joinder of necessary parties? 9. Whether the valuation made is insufficient? 10. Do the plaintiffs prove their right for partition and possession of 1/10 share to each? 11. To what shares the defendants are entitled? 12. To what reliefs the parties are entited? 17. On issue No. 1, the learned trial judge found that the same had not been proved by the plaintiffs-appellants stating that they have failed to explain the admission made by them in the earlier plaint. In regard to issue Nos. 2 and 3 it was held that the properties were ancestral properties and not separate properties of Sreenivasulu. As regards execution of Power of Attorneys as also the Deeds of Release, the trial court opined that they were voluntary in nature. In regard to issue No. 7 pertaining to limitation, it was held that the suit was barred by limitation as the plaintiffs had not sought for cancellation of deed of partition. It was held that since after partition, the deeds of lease have come into existence in February, 1985, the suit filed in 1990 without praying for cancellation of the deed of partition was not maintainable. On the said findings, the suit was dismissed. 18. However, it was held that plaintiff Nos. 1 and 2 alongwith defendant Nos. 3 to 8 and defendants 1 and 2 were entitled to the share of 1/33 each in Item No. 2 of the suit schedule properties. 19. Appellants preferred an appeal thereagainst. Before the High Court an application was filed under Order VI Rule 17 read with Section 151 of the Code of Civil Procedure praying for the following amendments in the plaint: 1. To Add at the end of para 5: It is learnt that two other properties belonging to our father are also available for partition which are required to be included in the plaint schedule as item Nos. 5 and 6, as otherwise the suit might become bad for partial partition or it might necessitate avoidable multiplicity of proceedings.

2. To add the following as item Nos. 5 and 6 after item No. 4 of the plaint Schedule. 5. Site bearing No. 1 suburb Rajajinagar, Bangalore admeasuring east-west 140 feet and north-south 336' + 350'/2 and bounded on the east by vacant land, west by T.B. Road, north by road and south by site No. 1/A. 6. Vacant site bearing No. 17-B, Industrial suburb, Bangalore, measuring on the east 242 ft., on the west 298 ft., on the north 236 ft. and on the south 160 feet, and bounded on the east by 60 feet main road, on the west by old No. 13/14, on the north by Seethalakshmi Hall Flour Mills and on the south T.B. Road. 20. The High Court in its judgment held: 1) In the absence of any issue having been framed as regards the validity or otherwise of the deed of relinquishment, there was no occasion for the defendants to adduce any evidence. 2) The plea of the appellants that the deed of relinquishment was hit by Section 25 of the Contract Act cannot be permitted to be raised at the appellate stage. 3) It was open to the parties to arrive at an arrangement and to release their respective rights wherefor no consideration was necessary to be passed. 4) The suit was not maintainable as the appellants had not sought for any declaration that the partition deed was void. 5) The contention of the appellants that they came to know about the fraud in 1988 was not correct and thus the suit was barred by limitation. 6) The holder of the Power of Attorney executed by defendant No. 8 having received the benefit of the partition, the appellants were estopped and precluded from challenging the same. 7) In view of the admission made by the appellants that the suit properties were the joint family properties, they are bound thereby. 8) As both the deed, viz. the deed of partition as also the deed of lease were written in English language and the appellants could speak in that language fluently, allegations of mis- representation have not been proved. 21. Mr. G.V. Chandrasekhar, learned Counsel appearing on behalf of the appellants, in support of this appeal, raised the following contentions: i) The courts below committed a serious error in not drawing adverse inference against respondents Nos. 1 & 2 as the said purported deed of partition dated 2nd July, 1957 and the other deeds including the Power of Attorney executed by the 4 th defendant had not been produced. The purported application for adducing additional evidence to prove the deed of partition dated 22nd July, 1957 thus should not be allowed by this Court. ii) The averments made in the 1982 suit being fraught with the elements of fraud and misrepresentation, no reliance could have been placed thereupon nor the plaintiffs-appellants could be said to have voluntarily made admissions in the said pleading. iii) As the deed of partition and the deed of relinquishment were void ab initio being hit by Section 25 of the Indian Contract Act, it was not necessary to pray for any relief for setting aside the said deeds. iv) The partition deeds as also the deed of relinquishment were void being hit by Section 25 of the Indian Contract Act as for the said purpose passing of adequate consideration was necessary, love and affection being not the requisite consideration therefor. The partition of the properties being unfair and unequal, reopening of the partition is permissible, wherefor also it is not necessary to seek cancellation of the documents. (v) In the event it be held that it is not necessary to seek declaration of the deed of partition and deed of release being void, Article 65 or Article 110 of the Schedule appended to the Limitation Act would be attracted and not Article 59 thereof.

(vi) As there is a mis-representation in regard to the nature of the document as the deed of partition ultimately turned out to be a deed of relinquishment and even otherwise, the same was opposed to public policy as contained in Section 25 of the Contract Act,. Article 59 of the Limitation Act would not be attracted. (vii) Gross inadequacy of price, which is a principle applied in the suits for specific performance of a contract, may be applied even in a case of this nature. viii) The trial court as also the High Court committed a serious illegality in opining that no issue had been framed in regard to the validity of the deeds, although such an issue being Issue No. 3 had in fact been framed. Burden to prove that the transactions were valid, although was on the defendants, but neither any evidence had been let on their behalf, nor the courts below had answered the said issue and in that view of the matter the impugned judgments cannot be sustained. ix) The principle of estoppel in a case of this nature will have no application as both the appellants had not acted upon the documents of lis. x) The properties of joint families and the self acquired properties and in particular the properties standing in the name of Singaramma could not be put into hotchpotch of joint family properties. xi) Consideration within the meaning of Section 25 of the Indian Contract Act, love and/or affection being consideration must be disclosed in the document, which having not been done, the impugned judgments could not have been sustained. xii) Power of attorney having not been witnessed by a close relative in a case of this nature, the impugned judgment cannot be sustained. 22. Mr. S.S. Javali, learned senior counsel appearing on behalf of respondent Nos. 1 and 2, on the other hand, urged: i) All the documents being registered documents, they carry a presumption of proper execution as also the contents thereof and in that view of the matter the burden was on the appellants to prove that they were vitiated by fraud or misrepresentation. Presumption of validity strengthens with the passage of time. ii) Appellants having themselves admitted that the properties in question were the joint family properties and not the self acquired properties are bound thereby, which they themselves admitted in the list of dates. iii) The contention having been raised for the first time in this Court that there had been no partition in the year 1957, the respondents have produced the said document, which being a registered one, may be taken into consideration. iv) Institution of the partition suit in the year 1992 being not in dispute, and the factum of partition entered into between K. Sreenivasulu and his brothers having been stated therein, there is no reason as to why 1957 partition should not have been believed by the courts below. v) In view of the fact that co-parcenary consisted of K. Sreenivasulu, the respondent Nos. 1 and 2 and his three sons through his second wife Venkatalakshamma, it was permissible for the parties to partition the properties half and half between two branches, which per se was not an illegal transaction. vi) The fact that Venajakshi had relinquished her share and ten items of properties had been jointly sold in respect whereof no accusation had been made as against the respondents, the partition of the properties consisting of four houses must have to be considered in the said back drop of events, particularly the fact that they are not the subject matter of challenge. vii) The conduct of the parties, i.e., three amongst eight sisters did not claim any share and only one sister having filed her written statement supporting the case of the appellants, two others merely had adopted the said written statement was a relevant factor which has rightly been taken into consideration by the courts below. However, defendant No. 5 in her deposition before the trial judge as DW-4 stated that she had not instructed any lawyer to file the written statement, the case of three others must also fall wherefrom it is evident that out of nine sisters, six did not contest, which would go to show that all the sisters had voluntarily relinquished their shares in the joint family properties. Attention in this behalf has also been drawn to the deposition of appellant No. 1 as PW-1 wherein the fact of that

earlier partition had taken place, has categorically been admitted which clearly proves not only 1957 partition but also the 1982 partition is legal and valid. viii) Plaintiff-appellants made only general allegations of fraud and mis-representation without giving any particulars thereof, which being mandatory in nature, no evidence could have been led in that behalf. ix) As the deposition of the appellants categorically show that all the documents were executed with their knowledge and their signatures had not been obtained on blank papers, this Court should not entertain the plea of fraud, mis- representation on their part particularly when they had admitted their knowledge about the nature of the document. x) Even Appellant No. 2, deposing as PW-2, has accepted execution of the power of attorney which was prepared at Cuddpath. It was only in respect of the mother's 1/3 rdshare in one of the properties that the plaintiffs had 1/11 th share, which they had not only accepted in the power of attorney executed by them, but also in the list of dates stating that not only a lumpsum amount had been paid to the appellant No. 1, but also the fact that they had been getting their share of rent through cheques and appropriating them. This conduct on the part of the appellant would clearly show that they not only executed the deeds voluntarily, but also have been getting the benefit thereof by way of receiving rent. Even she identified the document as a power of attorney and as such she would be deemed to have known about the nature thereof. 23. The source of title in respect of properties in suit is not in question. It was Kasetty Rangappa's property. K. Sreenivasulu being son of Kasetty Rangappa used to do business in partnership. There were some joint family properties. The business was a joint family business. There exists a presumption in law that a family holding joint properties and joint business would constitute a joint family. In Mst. Rukhmabai v. Lala Laxminarayan and Ors. MANU/SC/0186/1959 : [1960]2SCR253 , this Court held: There is a presumption in Hindu law that a family is joint. There can be a division in status among the members of a joint Hindu family by refinement of shares which is technically called "division in status", or an actual division among them by allotment of specific property to each one of them which is described as "division by metes and bounds". A member need not receive any share in the joint estate but may renounce his interest therein, his renunciation merely extinguishes his interest in the estate but does not affect the status of the remaining members vis-a-vis the family property. A division in status can be effected by an unambiguous declaration to become divided from the others and that intention can be expressed by any process.... Even after the dissolution of the partnership, the fact that it had all along been treated as a joint family property by both the branches of K. Sreenivasulu through his two wives Singaramma and Venkatalakshamma is evident as they were the subject matter of the O.S. No. 2459 of 1982. The fact that in the said suit the properties of K. Sreenivasulu were described as the joint family coparcenary property is not in dispute. Plaintiffs contended that it was K.S. Prakash who was behind the said machination. That may be so or may not be. The fact remains that a consent decree was passed pursuant to a settlement arrived at between the two branches. They decided that the properties may be divided half and half. Indisputably, the said consent decree has been acted upon. Once that consent decree has been acted upon, the question of reopening the entire suit by setting aside the decree passed in the said O.S. No. 2459 of 1982 would not arise. It is also not in dispute that the properties which fell in the share of the parties hereto and Smt. Venajakshi are only four houses. It is also of some significance to note that the plaintiffs initially filed a suit in respect of the house in which Singaramma had been given one-third share, after the partition was brought about in terms of the decree passed in the said O.S. No. 2459 of 1982. The basis for the entire suit being commission of fraud in obtaining the said consent decree, it was obligatory on the part of the plaintiffs to pray for setting aside the said decree. The pleadings of the appellants in the said suit in which they were parties are binding on them in the subsequent proceedings proprio vigore. Unless fraud was proved, they could not have got rid of the same. The said decree has been acted upon. Pursuant to or in furtherance of the said decree, ten sale deeds have been executed. 24. It may be true that although the properties were described as coparcenary property and both the branches were granted equal share but it must be remembered that the decree

was passed on the basis of the settlement arrived at. It was in the nature of a family settlement. Some `give and take' was necessary for the purpose of arriving at a settlement. A partition by meets and bounds may not always be possible. A family settlement is entered into for achieving a larger purpose, viz., achieving peace and harmony in the family. In Hari Shankar Singhania and Ors. v. Gaur Hari Singhania and Ors. MANU/SC/1686/2006 : AIR2006SC2488 , this Court held: 43. The concept of "family arrangement or settlement" and the present one in hand, in our opinion, should be treated differently. Technicalities of limitation, etc. should not be put at risk of the implementation of a settlement drawn by a family, which is essential for maintaining peace and harmony in a family. Also it can be seen from decided cases of this Court that, any such arrangement would be upheld if family settlements were entered into to allay disputes existing or apprehended and even any dispute or difference apart, if it was entered into bona fide to maintain peace or to bring about harmony in the family. Even a semblance of a claim or some other ground, as say affection, may suffice as observed by this Court in Ram Charan Das v. Girjanandini Devi MANU/SC/0358/1965 : [1965]3SCR841 [See also Govt. of A.P. and Ors. v. M. Krishnaveni and Ors. MANU/SC/8409/2006 : (2006)7SCC365 and Ramdev Food Products (P) Ltd. v. Arvindbhai Rambhai Patel MANU/SC/3725/2006 : 2006(33)PTC281(SC) ] 25. One of the grievances raised by Mr. Chandrasekhar is that the original deed of partition 22nd July, 1957 was not produced. It was, however, a registered document. A perusal of the averments made in the plaint categorically goes to show that the partition referred to therein by and between K. Sreenivasulu and his brothers related to the partition effected in 1957. The plaintiffs - appellants were, thus, aware thereof. They did not contend in the plaint that the said deed of partition dated 2nd July, 1957 was in effect and substance a deed of dissolution of partnership. They stated so for the first time in the list of dates in the Special Leave Petition. In response thereto, only the respondents have produced the said deed and sought to adduce additional evidence to prove the said fact. In our opinion, it is not necessary to do so as the admissions made by the appellants in their pleadings themselves are sufficient to hold that the property was a joint family property and by reason of the said deed of settlement culminating in passing of the compromise decree dated 20.12.1982, a valid consent decree was passed. It is not a case that there had been a fraud or misrepresentation on the part of K.S. Prakash Respondent No. 1 alone herein but if a fraud or misrepresentation is to be attributed, the same must be attributed to the entire family representing both the branches. They must have thought that by reason of such averments a settlement can be brought about. The averments made in the suit filed by one branch were accepted by the other branch without any demur whatsoever. 26. Even otherwise, in view of the well-settled principles of law that when a son gets a property from his father, as soon as sons are born to him, a joint family is constituted. It is not a case that sons from either side of the family were born before the Hindu Succession Act 1956 came into force. 27. The said compromise decree was acted upon. A deed of partition was entered into. 28. All the parties including Singaramma came to the office of the Sub-Registrar for the said purpose. There is nothing to show nor the plaint contains any averments that a fraud or mis-representation had been practised on Singaramma. It is true that she was not well and had undergone an operation at Vellore but bereft of that there is nothing to show that she was keeping unwell for a long time so as not to possess a sound disposing mind. Before the said deed of partition was entered into, on 15 th July, 1983 a special power of attorney was executed by Ranganayakamma in favour of Respondent No. 1. A clear recital was made therein that she had agreed to relinquish her interest. The power of attorney was being executed pursuant thereto. Mr. Chandrasekhar has drawn our attention to the statements made in the power of attorney to contend that no other or further agreement was entered into and the power of attorney should have been preceded by a regular deed. In our opinion, it was not necessary. Relinquishment may be unilateral. A sister relinquishing her right in favour of the brothers may do so in various ways. Expression to that effect may be made in several ways. 29. A power of attorney need not disclose the purpose for which the relinquishment is made or the consideration thereof. Another power of attorney was executed by Defendant No. 4 in favour of Singaramma to enter into a deed of partition. It was not produced. But, the said power of attorney concededly had nothing to do with the said property. It was in respect of other business. Defendants - Respondents rely thereupon only to show that for the purpose of better management of the properties and business, the sisters used to execute power of attorneys. They knew about the nature and character of the said documents. They never

stated that any fraud or misrepresentation had been practised in regard to the character of the document; the effect whereof we would discuss a little later. 30. Coming now to the deed of partition, admittedly, one-third share in Item No. 3 had been given to the mother. Appellants and other sisters relinquished their right, title and interest therein. The materials brought on records by the parties would clearly go to show that they had taken a decision in unison. A similar power of attorney was executed by one of the sisters being Smt. Venajakshi, who, as noticed hereinbefore, upon receipt of a sum of about Rs. 40,000/-, relinquished her right. It may be true that in the said deed of partition dated 5thAugust, 1983, the amount of consideration was shown at Re. 1/-. But whether the same by itself would invalidate the said deed of partition is another question which we intend to deal with at an appropriate stage. The fact, however, remains that in the plaint filed in the present suit by the appellants, the execution or validity of the document including the registered power of attorneys and deeds of lease being Exhibit Nos. 9, 10, 11, 12, 13 and 14 executed between 1983 and 1985 are not in question. These documents in categorical terms go to show that the partition effected in 1983 had been acted upon. 31. It would be of some importance, furthermore, to notice that the plaintiff - Appellant No. 1 Kanthamma in her deposition before the learned Trial Judge admitted: (i) Her father was carrying on business in Sarees. (ii) Each partition occasion between of the sisters had been given one rupee and their signatures were obtained on the deed dated 5th August, 1983. There was some function on that date, on which all the sisters had put their respective signatures. There had been a partition the children of the second wives of Sreenivasulu and children of her mother.

(iii) A suit was instituted which ended in compromise. She had affection for and faith in Defendant Nos. 1 and 2. (iv) She was told by others that she had been cheated by their brothers. She, however, could not say as to who they were. She speaks fluent English. She signed the documents in English. She had been running a poultry business under the name and style of Kantha Poultry Farm. She had also been doing saree business with her husband. Her husband had a roller flour mill business. He is also one of the partners in Singaramma Flour Mills, Bangalore. (v) One of the sisters of the plaintiff, viz., Defendant No. 8 was a Science graduate from Mount Carmel College. Ranganayakamma although made an attempt to show that she had not signed any power of attorney but accepted that once she had signed some power of attorney. It is accepted that the power of attorney was executed at Cuddapah, her own place. (vi) From the deposition of the appellants it would further appear that they had accepted that the documents had been executed either in the office of the advocates or at Cuddappah, which is their place of residence in presence of their own advocates and/or they had visited the registration office and put their signatures/thumb impressions before the Registrar, no case of fraud or mis-representation has been made out. (vii) She had been going to the Sub-Registrar's office as also to the offices of the Advocates. The power of attorney was signed in the Chamber of the Advocates. She accepted that her mother had been given one- third share in Item No. 2 properties. She accepted her signatures in the power of attorney dated 20.12.1983 and the signature of her Advocate Mr. T.S. Ranganaikalu which was marked as Exhibit D-9. (viii) It is also accepted that after the death of her father she had been given 1/11th in Item No. 2 of Schedule property. (ix) One of the documents was attested by Mr. T.S. Ranganaikalu and Mr. N.K. Swamy, Advocates. (x) She also accepted that a deed of lease was executed in favour of Defendant No. 9 M/s. Voltas Limited and she had been receiving Rs. 9000/- per month from the said Company. In one of the documents even her husband is an attesting witness. He is also a lawyer. It was, therefore, difficult to arrive at a conclusion that the plaintiffs - appellants were not aware of the nature of the document or any fraud had been practiced on them. 32. The aforementioned findings have a direct bearing on the question as to whether the deed of partition as also the power of attorneys were vitiated by reason of any fraud or mistake on the part of the respondent Nos. 1 and 2 herein. It is a well-settled principle of law that a void document is not required to be avoided whereas a voidable document must be. It is not necessary for us to advert to a large number of decisions of this Court and

other High Courts on this issue as more or less it is concluded by a decision of this Court in Prem Singh v. Birbal and Ors. MANU/SC/8139/2006 : AIR2006SC3608 wherein this Court held: 16. When a document is valid, no question arises of its cancellation. When a document is void ab initio, a decree for setting aside the same would not be necessary as the same is nonest in the eye of the law, as it would be a nullity. 33. Section 16 of the Indian Contract Act provides that any transaction which is an outcome of any undue misrepresentation, coercion or fraud shall be voidable. If, however, a document is prima facie valid, a presumption arises in regard to its genuineness. In Prem Singh (supra), it was stated: 27. There is a presumption that a registered document is validly executed. A registered document, therefore, prima facie would be valid in law. The onus of proof, thus, would be on a person who leads evidence to rebut the presumption. In the instant case, Respondent 1 has not been able to rebut the said presumption. It was opined: 12. An extinction of right, as contemplated by the provisions of the Limitation Act, prima facie would be attracted in all types of suits. The Schedule appended to the Limitation Act, as prescribed by the articles, provides that upon lapse of the prescribed period, the institution of a suit will be barred. Section 3 of the Limitation Act provides that irrespective of the fact as to whether any defence is set out or is raised by the defendant or not, in the event a suit is found to be barred by limitation, every suit instituted, appeal preferred and every application made after the prescribed period shall be dismissed. In Mst. Rukhmabai (supra), this Court held: In unraveling a fraud committed jointly by the members of a family, only such letters that passed inter se between them can give the clue to the truth.... Yet again in A.C. Ananthaswamy v. Boraiah MANU/SC/0655/2004 : (2004)8SCC588 , this Court categorically laid down that in establishing alleged fraud, it must be proved that the representation made was false to the knowledge of the party making such representation or that the party could have no reasonable belief that it was true. Level of proof required in such a case was held to be extremely high. 34. Another aspect of the matter cannot also be lost sight of. Order VI, Rule 4 of the Code of Civil Procedure reads as under: 4. Particulars to be given where necessary In all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence, and in all other cases in which particulars may be necessary beyond such as are exemplified in the forms aforesaid, particulars (with dates and items if necessary) shall be stated in the pleading. 35. When a fraud is alleged, the particulars thereof are required to be pleaded. No particular of the alleged fraud or misrepresentation has been disclosed. 36. We have been taken through the averments made in the plaint. The plea of fraud is general in nature. It is vague. It was alleged by the plaintiffs that signatures were obtained on several papers on one pretext or the other and they had signed in good faith believing the representations made by the respondents, which according to them appeared to be fraudulent representation. When such representations were made, what was the nature of representation, who made the representations and what type of representations were made, have not been stated. Allegedly, on some occasions, respondent Nos. 1 and 2 used to secure the signatures of one or more of the plaintiffs and defendants No. 3 to 8 on several papers but the details therein had not been disclosed. 37. Admittedly, the papers were signed either in the office of the advocate or before the Sub-Registrar. It was, therefore, done at a public place. No signature was obtained on the blank paper. No document was executed in a hush-hush manner. It has been alleged that taking fraudulent advantage of the innocence and ignorance of the plaintiffs and Defendant

No. 2, the said deed of partition was executed resulting in an unjust, unfair and unequal fraudulent partition of the unequal properties. If their signatures had not been obtained on blank sheets of papers, it was for the plaintiffs - appellants to show who had taken advantage and at what point of time. Both the courts below have come to the conclusion that the sisters jointly had taken a stand that they would not claim any share in the property. One of the sisters, who wanted a share in the property, had been paid a sum of Rs. 40,000/- and she had executed a deed of relinquishment. The said fact is not denied. All other sisters were, thus, aware thereof. They knew what was meant by relinquishment. All deeds including the said deed of partition was executed with the knowledge that they had been signing the deed of partition and no other document. This has categorically been stated by the plaintiff No. 1 Kanthamma in her evidence which we may notice in the following terms: 1. Each of the sisters have been given one rupee and signatures were obtained on partition deed on 5.8.1983 2. I had gone to Sub-Registrar's office at the time of registration of the said partition deed. Sub-Registrar did not explain the contents of the said partition deed. 3. I do not remember the date on which I affixed my signature on partition deed. We all the sisters and mother had gone to Sub-Registrar's Office at the time of registration of the partition deed. They were, therefore, aware that the deed in question was a deed of partition. They admitted that they had put their signatures before the Sub-Registrar and no where else. Their statements appear to be far- fetched and beyond the ordinary human conduct. If a plea was to be raised and evidence was required to be addressed that there had been a fraudulent misrepresentation as regards the character of partition deed (Exhibit D-6) and in absence of any particulars having been furnished as regards alleged fraud and misrepresentation, the said deeds would not be void but only voidable. 38. We are, however, not oblivious of the decisions of this Court and other High Courts that illegality of a contract need not be pleaded. But, when a contract is said to be voidable by reason of any coercion, misrepresentation or fraud, the particulars thereof are required to be pleaded. In Chief Engineer, M.S.E.B. and Anr. v. Suresh Raghunath Bhokare MANU/SC/1077/2004 : (2005)ILLJ429SC , the law is stated in the following terms: ...The Industrial Court after perusing the pleadings and the notice issued to the respondent came to the conclusion that the alleged misrepresentation which is now said to be a fraud was not specifically pleaded or proved. In the show-cause notice, no basis was laid to show what is the nature of fraud that was being attributed to the appellant. No particulars of the alleged fraud were given and the said pleadings did not even contain any allegation as to how the appellant was responsible for sending the so-called fraudulent proposal or what role he had to play in such proposal being sent.... [See also Prem Singh (supra)] In Ramesh B. Desai and Ors. v. Bipin Vadilal Mehta and Ors. MANU/SC/2996/2006 : AIR2006SC3672 , this Court emphasized the necessity of making requisite plea of Order VI, Rule 4 stating: 22. Undoubtedly, Order 6 Rule 4 CPC requires that complete particulars of fraud shall be stated in the pleadings. The particulars of alleged fraud, which are required to be stated in the plaint, will depend upon the facts of each particular case and no abstract principle can be laid down in this regard. In Sangramsinh P. Gaekwad and Ors. v. Shantadevi P. Gaekwad (Dead) through LRs. and Ors. MANU/SC/0052/2005 : AIR2005SC809 , this Court held: 207. We may now consider the submissions of Mr Desai that Appellant 1 herein is guilty of commission of fraud. Application filed by Respondent 1 before the Gujarat High Court does not contain the requisite pleadings in this behalf, the requirements wherefor can neither be denied nor disputed. 208. It is not in dispute that having regard to Rule 6 of the Companies (Court) Rules, the provisions of the Code of Civil Procedure will be applicable in a proceeding under the Companies Act. In terms of Order 6 Rule 4 of the Code of Civil Procedure, the plaintiff is

bound to give particulars of the cases where he relies on misrepresentation, fraud, breach of trust, etc. 39. Strong reliance has been placed by Mr. Chandrasekhar on a decision of the Orissa High Court in Sundar Sahu Gountia and Ors. v. Chamra Sahu Gountia and Ors. MANU/OR/0025/1954 : AIR1954Ori80 , wherein it was opined: 12. The principles deducible from a consideration of these authorities may be summarised as follows: (i) To constitute a valid family arrangement the transaction should be one which is for the benefit of the family generally. (ii) The consideration for the arrangement may be preservation of the family property, preservation of the peace and honour of the family, or the avoidance of litigation. (iii) It is not essential that there should be a doubtful claim, or a disputed right to be compromised. If there is one, the settlement may be upheld if it is founded on a reciprocal 'give and take and there is mutuality between the parties, in the one surrendering his right and in the other forbearing to sue. In such cases the Court will not too nicely scrutinise the adequacy of the consideration moving from one party to the other. (iv) In any case, if such an arrangement has been acted upon the Courts will give effect to it on the ground of estoppel or limitation and the like. (v) A family arrangement may also be upheld if the consideration moves from a third party. (vi) If it appears to the Court that one party has taken undue advantage of the helplessness of the other and there is no sacrifice of any right or interest, the agreement is unilateral and is devoid of consideration. (vii) The consent of the parties should be freely given to the arrangement and gross inadequacy of consideration may be a determining factor in judging whether the consent was freely given. (viii) If the agreement involves or implies an injury to the person or property of one of the parties, the Courts retain an inherent power to prevent injustice being done. In that case, the court refused to record the alleged settlement between the parties. It was in that situation, the appeal was filed before the High Court. The ratio enunciated therein, that preserving the family property cannot, therefore, form the ground or consideration for the arrangement by the party to forgo a substantial part of his share so as to make the compromise binding upon him, ex facie appears to be contrary to the decision of this Court in Hari Shankar Singhania (supra) and Ramdev Food Products (P) Ltd. (supra). In Ramdev Food Products (P) Ltd. (supra), this Court held: 35. We may proceed on the basis that the MoU answers the principles of family settlement having regard to the fact that the same was actuated by a desire to resolve the disputes and the courts would not easily disturb them as has been held in S. Shanmugam Pillai v. K. Shanmugam Pillai MANU/SC/0398/1972 : [1973]1SCR570 , Kale v. Dy. Director of Consolidation MANU/SC/0529/1976 : [1976]3SCR202 and Hari Shankar Singhania v. Gaur Hari Singhani. When there arises a question as to whether the suit was to be regarded as having adjusted by way of mutual agreement so that it can be disposed of on the said terms, in the event of a dispute, the consideration is different. However, where a settlement had been arrived at and a decree has been passed on the premise that the said compromise was lawful, we are of the opinion that the same cannot be permitted to be reopened only on the question as to whether the properties were joint properties or the self-acquired property of Sreenivasulu. The said decision, therefore, in our opinion cannot be said to have any application whatsoever. 40. It is also not a case where the settlement was contrary to any statutory provision or was opposed to public policy as envisaged under Section 23 of the Indian Contract Act. If the principle ex turpi causa non oritur actio is to be applied in respect of the consent decree, the matter might have been different. The court shall apply the statute for upholding a compromise unless it is otherwise vitiated in law. It is not required to go into the question as to whether the contents of the said settlement are correct or not. Only in a case where fraud on the party or fraud on the court has been alleged or established, the court shall treat the same to be a nullity. Fraud, as is well known, vitiates all solemn acts.

[See Ganpatbhai Mahijibhai Solanki v. State of Gujarat and Ors. MANU/SC/7281/2008 : 2008(3)SCALE556 ] but the same must be pleaded and proved. 41. We may now consider the submission of Mr. Chandrasekhar as to what is meant by `release'. Reliance has been placed on De'Souza's Conveyancing, page 1075, wherein it has been stated: A deed of release does not create title. A release may be drafted in the same form as a deed of transfer or simply as a deed poll or a deed to which both parties may join stating the circumstances under which the release is based. Either the monetary consideration or "the premises", i.e., facts in consideration of which the release is made shall be stated. 42. Our attention has also been drawn to essentials of `release' from the said treatise, which are as under: (i) Full recitals of the origin of the claim, which form the most important part; (ii) knowledge of the releaser about the claim, intended to be released; (iii) words and expressions sufficiently clear to convey the intention of the releaser to discharge the right or the claim. 43. A deed of `release' for a consideration is a transaction. When, thus, a release is made for consideration, the particulars of consideration and other particulars which are required to be averred in the deed being essential elements thereof. Relinquishment of a property by a sister in favour of her brother for a consideration or absence of it, stands on a different footing. Section 25 of the Indian Contract Act must be read and construed having regard to the fact situation obtaining in the cases. In Smt. Manali Singhal and AIR1999Delhi156 , it was held: Anr. v. Ravi Singhal and Ors. MANU/DE/0616/1998 :

20. Learned Counsel for the defendants has then argued that the impugned settlement is without any consideration. Hence the same is hit by Section 25 of the Contract Act. The contention of the learned Counsel may be an ingenious one but can be brushed aside without any difficulty. Parties more often than not settle their disputes amongst themselves without the assistance of the Court in order to give quietus to their disputes once and for all. The underlying idea while doing so is to bring an era of peace and harmony into the family and to put an end to the discord, disharmony, acrimony and bickering. Thus the consideration in such type of settlements is love and affection, peace and harmony and satisfaction to flow therefrom. 44. We would proceed on the basis that the consideration of rupee one shown in the deed of partition is no consideration in the eye of law. However, the question is as to whether a partition deed would be violative of Section 25 of the Indian Contract Act for want of consideration. It is per se not a void document. No such plea was raised. No issue has been framed. No evidence has been adduced. No ground has been taken even in the memo of appeal before the High Court. The validity of the partition deed (Ex. D-6) by reference to the recitals of the release of shares by the daughters of Sreenivasulu has not been questioned. 45. Renunciation in the Indian context may be for consideration or may not for consideration. This has been so held by this Court in Kuppuswamy Chettiar v. A.S.P.A. Arumugam Chettiar and Anr. MANU/SC/0211/1966 : [1967]1SCR275 in the following terms: In the present case, the release was without any consideration. But property may be transferred without consideration. Such a transfer is a gift. Under Section 123 of the Transfer of Property Act, 1882, a gift may be effected by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses. Consequently, a registered instrument releasing the right, title and interest of the releasor without consideration may operate as a transfer by way of a gift, if the document clearly shows an intention to effect the transfer and is signed by or on behalf of the releasor and attested by at least two witnesses. Exhibit B-l stated that the releasor was the owner of the properties. It showed an intention to transfer his title and its operative words sufficiently conveyed the title. The instrument, on its true construction, took effect as a gift. The gift was effectively made by a registered instrument signed by the donor and attested by more than two witnesses. The said principle has been noticed by a Full Bench of the Madras High Court in Chief Controlling Revenue Authority, Referring Officer v. Rustorn Nusserwanji Patel MANU/TN/0223/1968 : AIR1968Mad159 stating:

(8) In the present case, prima facie, it may be contended with great force and plausibility that the document rightly purports to be a release and should be received as such. For it cannot be disputed, we think, that the estate in question is owned by two parties or coowners, that the releasee has already an undivided half share in the estate and that what the releasor purports to do by the document is to effect himself, in respect of both this title and his right to possession in favour of the releasee. Nevertheless, Sri Ramaswami for the State has contended, upon two main lines of reasoning, that the document has to be interpreted as a conveyance or should be held essentially to be such. The first line of reasoning is based upon the distinction well known to law borrowed from the English law of real Property between a joint tenant and a tenant-in-common. This distinction has also been applied to the concept of a Hindu Coparcenary as existing before a division in status and the state of rights between erstwhile co-parceners after division is status as would be apparent from cited passages in Mulla's Hindu law. The other line of reasoning is that upon the actual phraseology of Article 55 of Schedule I such a document as this cannot amount to a release. 46. The question again came up for consideration before a Special Bench of the Madras High Court in The Chief Controlling Revenue Authority, Board of Revenue, Madras v. Dr. K. Manjunatha Rai MANU/TN/0248/1977 : AIR1977Mad10 , in the context of the Payment of Stamp Duty wherein it was categorically held: ...For a release, in law, may be effected either for consideration or for no consideration. In either case, if the transaction operates as a relinquishment or a renunciation of a claim by one person against another or against a specified property, it will be a release.... It is, therefore, not a pure question of law. 47. Section 25 of the Indian Contract Act contains several exceptions, that is to say : (i) if it is in writing; (ii) if it is registered or (iii) if the same has been executed on account of love and affection. The deed of partition is both in writing and registered. One of the questions which had been bothering this Court is as to whether a document had been executed out of love and affection or not. The fact that the parties are near relatives is not in dispute. The love and affection of the sisters on the brothers has categorically been accepted by Plaintiff No. 1 Kanthamma in her deposition, stating: In the house of defendants 1-2 whenever there is a function, as our father died and since we had more affection and faith on defendants 1-2, we used to sign the documents without going through the contents. 48. The deed of partition could have also been entered into by way of family arrangement where no registration was required. Such a course of action had not been taken. The parties knew the nature of the document. Appellants and other sisters being highly educated were supposed to know the contents thereof. Their husbands are well-off in the society. The transaction, therefore, was transparent. Furthermore, the mother was alive. She was also a party to the deed of partition. She must have played a pivotal role. She even if suffering from illness might be anxious to see that family properties are settled. Release by an heir other than a co-parcenar does not need any consideration. A release is valid even without consideration. 49. Mr. Chandrasekhar, however, has drawn our attention to Anson's Law of Contract, page 154, wherein the law is stated to be as under: ...Some additional factor is required to bring a case within one of the exceptions: for example, the existence of a relationship in which one party is able to take an unfair advantage of the other. In the absence of some such factor, the general rule applies that the courts will enforce a promise so long as some value for it has been given. As regards, nominal and inadequate consideration, the learned Author states: 'Nominal consideration' and `nominal sum' appear..., as terms of art, to refer to a sum or consideration which can be mentioned as consideration but is not necessarily paid. This view was expressed by Lord Wilberforce (in a speech with which all the other members of the House of Lords concurred) in Midland Bank & Trust Co. Ltd. v. Green. In that case a husband sold a farm, said to be wroth 40,000, to his wife for 500. It was held that the wife was, for the purposes of Section 13(2) of the Land Charges Act 1925, a "purchaser for money or money's worth" so that the sale to her prevailed over an unregistered option to purchase the land, which had been granted to one of the couple's children. It was not necessary to decide whether the consideration for the sale was nominal but Lord Wilberforce said that he would have "great difficulty" in so holding; and that "To equate `nominal' with `inadequate' or even `grossly inadequate' consideration would embark the law on inquiries which I cannot think were ever intended by Parliament. On the facts of the case the 500 was in fact paid and was more than a mere token, so that the consideration was not

nominal on either of the two views stated above. But if the stated consideration had been only 1, or a peppercorn, it is submitted that it would have been nominal even if it had been paid, or delivered, in accordance with the intention of the parties. 50. The same principle might have been applied in the Indian Contract Act. "Consideration" has been defined in Section 2(d) of the Indian Contract Act, which reads as under: (d) When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise; 51. Consideration even in the Indian context would mean a reasonable equivalent or other valuable benefit passed on by the promiser to the promise or by the transferor to the transferee. Love and affection is also a consideration within the meaning of Sections 122 and 123 of the Transfer of Property Act. 52. In Mt. Latif Jahan Begam v. Md. Nabi Khan MANU/UP/0228/1931 : AIR1932All174 , the Allahabad High Court rightly held that a question in regard to the adequacy of consideration for the purpose of attracting Section 25 of the Indian Contract Act is a mixed question of fact and law and not a pure question of law stating: ...The question did not involve a mere point of law. It required the determination of a question of fact, viz., whether the agreement was made on account of natural love and affection. The Court below was not justified in recording a finding that the plaintiff had not proved that there was any affection between herself and her father in law. There was no occasion in this case for the plaintiff to offer any proof on a point which was not raised at the trial. We are of opinion that the learned District Judge has erred in entertaining and giving effect to this plea. Yet again in Gauri Shanker v. Hindustan Trust (Pvt.) Ltd. and Ors. MANU/SC/0613/1972 : AIR1972SC2091 , this Court did not permit an amendment of the pleadings in that behalf after a long time. We are, however, not oblivious of the fact that this Court in some of its decisions opined that the court should allow amendment of the plaint liberally as was done in the case ofBhikhubhai Vithlabhai Patel and Ors. v. State of Gujarat and Anr. MANU/SC/7399/2008 : AIR2008SC1771 but the factual matrix involved therein is completely different. In John Tinson and Co. Pvt. Ltd. and Ors. v. Mrs. Surjeet Malhan and Anr. MANU/SC/0331/1997 : [1997]1SCR842 , it is stated that a distinction must be made between a transaction which is invalid in law being ultra vires the Articles of Association and other transactions. What is contemplated is the sense of ad idem for a concluded contract but when a document can be executed for no consideration, pleading in that behalf would be a must. 53. The High Court, therefore, in our opinion, was correct in not allowing the appellants to raise the said contention. 54. We may, furthermore, notice that the deed of partition (Ex. D-6) had been acted upon by the appellants and other sisters. They executed a deed of lease in respect of their 1/11thshare each in the 1/3rd share in one of the items of the properties in favour of the tenant, Defendant No. 9. The lease deed executed by Plaintiff No. 1 (Ex. D-14) is dated 16.02.1985. In terms of the deed of partition, one of the plaintiffs received rentals in respect of her share from the tenants. There are a large number of documents brought on records by the parties wherefrom a positive knowledge of execution of the said partition deed on the part of the sisters is possible to be attributed. The said documents are: 1. Exhibit D-4 dated 4-2-1985, Power of Attorney executed by Plaintiff No. 1 mentioning D6 2. Exhibit D-9 dated 20-12-1983, Power of Attorney by Plaintiff No. 2 referring to D-6 3. Exhibit D-14 dated 16-2-1985, Registered lease deed by Plaintiff No. 1 referring to Exhibit D-6 and also two other registered lease deeds by Defendants Nos. 1-8 and Plaintiff No. 2. 4. Exhibit D-19 to D-22 rent receipts having received rents by the sisters. 55. As regards, Power of Attorney executed by Ranganayakamma Plaintiff No. 2. It appears that there were three such documents, viz.:

1. Ex. D - 9 is a Special Power of Attorney executed at Cuddappah appointing K.S. Prakash to execute lease deed with respect to 1/11th of 1/3rd share of mother's share. It was attested by T.S. Ranganaikalu and N.K. Swamy, Advocates. 2. Ex. D - 10 is a Power of Attorney dated 20.12.1983 executed at Cuddappah appointing K.S. Prakash relinquishing her share in M/s. Singaramma Flour Mills. It was attested by T.S. Ranganaikalu and N.K. Swamy, Advocates. 3. Ex. D-11 is an affidavit of Ms. Ranganakayamma stating on oath that Ex. D-9 is valid and subsisting. It was attested by R.V. Prasad, Advocate. 56. It may be true that there is nothing on record to show that a lease deed was executed by other plaintiff but then there is nothing to show that she was not aware thereof. If she had not been paid her share from the rental income, she had not prayed for mesne profit. 57. We may now consider the question of limitation raised by Mr. Chandrashekhar. Applicability of Article 65 or Article 110 of the Limitation Act, on the one hand, and Article 59 thereof, on the other, would depend upon the factual situation involved in a case. Article 59 reads as under: 59. To cancel or set aside an Three years When the facts entitling the instrument or decree or for plaintiff to have the the rescission of a instrument or decree contract. cancelled or set aside or the contract rescinded first become known to him. A decree for setting aside a document may be sought for in terms of Section 31 of the Specific Relief Act. Applicability of Article 59 would indisputably depend upon the question as to whether the deed of partition was required to be set aside or not. In view of our findings aforementioned, it was required to be set aside. It is not a case where the deed of partition by reason of purported wrong factual contention raised in the plaint leading to grant of a consent decree was void ab initio. It was not. The effect of it would be that the same was required be set aside. [See Prem Singh (supra), Bay Berry Apartments Pvt. Ltd. and Anr. v. Shobha and Ors.MANU/SC/8566/2006 : AIR2007SC226 and Utha Moidu Haji v. Kuningarath Kunhabdulla and Ors. MANU/SC/8733/2006 : 2006(14)SCALE156 ] It must, therefore, be held that the suit was barred by limitation. 58. For the reasons aforementioned, there is no merit in this appeal which is dismissed accordingly. No costs.

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MANU/AP/0599/2007 Equivalent Citation: 2007(6)ALD105, 2007(6)ALT759 IN THE HIGH COURT OF ANDHRA PRADESH AT HYDERABAD CCCA No. 7 of 1990 Decided On: 25.07.2007 Appellants: Dr. Prashant K. Ravi and Anr. Vs. Respondent: S. Narasaiah (died) per LRs. Hon'ble P.S. Narayana, J. Counsels: For Appellant/Petitioner/Plaintiff: G. Dbananjai, Adv. For Respondents/Defendant: B. Vijaysen Reddy, Adv. for Respondent Nos. 2 to 6 Subject: Civil Catch Words Mentioned IN Acts/Rules/Orders: Civil Procedure Code (CPC) - Order 7, Rule 7 Cases Referred: J. Lakshman Rao and Ors. v. Ellandu Ravinder and Anr. 2007 (3) ALD (NOC) 59; Thota Kanakadurga Varaprasad Rao v. Madapati Chandra Sekhara Reddi 2002 (3) ALD 97; Lahiri v. Prem Prakash AIR 2007 Raj. 85; S.V. Sankaralinga Nadar v. Ratnaswami Nadar and Ors. AIR 1952 Mad. 389; Indian Bank, Chittoor v. V.R. Venkataraman and Ors. 2004 (4) ALD 307; Sughra Bee v. Kareez Fatima Qureshi 2004 (3) ALD 821; Manickathammal v. Nallasami AIR 1977 Mad. 83; Sarju Pershad Ramdeo Sahu v. Jwaleshwari Pratap Narain Singh AIR 1951 SC 120;Madhusudan Das v. Narayani Bai AIR 1983 SC 114; State of W.B. v. Mir Fakir Mohd. AIR 1977 Cal. 29; P. Pandit Rao (Died Per LRs) and Ors. v. K. Damodar and Anr. 2005 (5) ALD 646 : 2005 (6) ALT 140; S. Venkateswar Rao v. State of A.P. 1996 (4) ALD 1135; Vinod Kumar v. Surjit Kumar AIR 1987 SC 2179 JUDGMENT P.S. Narayana, J. 1. This is an appeal filed by unsuccessful plaintiffs in O.S. No. 84/86 on the file of IV Additional Judge, City Civil Court, Hyderabad. 2. The respondent-defendant died during the pendency of the appeal and R.2 to R.6 were brought on record as the legal representatives of the deceased sole respondent by Order dated 18.6.1999 in CMP No. 3315/98. 3. Sri Dhanamjay, the learned Counsel representing appellants had taken this Court through the respective pleadings of the parties, the evidence available on record and made elaborate submissions that in the facts and circumstances of the case instead of decreeing the suit granting the relief of specific performance decreeing the suit for refund of Rs. 1,00,000/with interest at 12% per annum from the date of suit till the date of realization cannot be sustained. The learned Counsel also pointed out that: this relief was granted though specifically not prayed for exercising power under Order VII Rule 7 of the Code of Civil Procedure. The Counsel would maintain that the mere admission made by P.W. 1 relating to the delivery of cheque by the father would not seriously alter the situation since the delivery of cheque by the father would not amount to the payment of consideration by the father since the cheque was issued by the 1st plaintiff - P.W. 1. Even otherwise, when the theory of obtaining signatures on the blank papers had been introduced since the signatures are not in dispute and the payment of part of consideration also not being in serious dispute, the suit should have been decreed. The specific pleading is that the defendant approached Judges:

the 1st plaintiff. D.W. 1's evidence is as vague as it can be and D.W. 2's evidence does not throw much light on the question in controversy. The Counsel also would further submit that the role of the father was not pleaded and merely because P.W. 1 deposed in that fashion, that by itself cannot be taken as a suspicious circumstance. For the hand-loan episode, absolutely there is no evidence. The execution of Ex. A.1 was proved in accordance with law by examining P.Ws.l and 2. The Counsel also commented that the non-issuance of reply also is an important fact that has to be taken into consideration. The Counsel also pointed out to the variance between pleading and proof. The Counsel also explained relating to the suspicion expressed by the trial Court in relation to the stamp paper and also certain simple discrepancies. The Counsel also explained that the stamp was purchased on behalf of 1st plaintiff by A. Narsaiah and when the hand loan episode was not established and when the execution of the agreement of sale Ex.A.l in question had been duly proved and relating to the actual value of the property except the statement of D.W. 1, when there is no acceptable evidence, negativing the relief of specific performance cannot be sustained. The learned Counsel in all thoroughness had taken this Court through the oral and documentary evidence and also commented that the recitals in Ex. A.13 also would not seriously alter the situation if this Court is satisfied that the agreement of sale had been duly proved. The Counsel also placed reliance on several decisions to substantiate his submissions. 4. Per contra Sri Vijaysen Reddy, the learned Counsel representing the present respondents, would submit that in the facts and circumstances the non-examination of the father is definitely fatal to the case of the plaintiffs and the Counsel also would submit at present the father also is not alive. The learned Counsel also would submit that the names of the witnesses already had been typed and this would probablize the defence theory that the signatures were taken advantage of and the agreement of sale Ex. A.1 was fabricated. The Counsel also would explain that it is a residential portion and in that view of the matter, inasmuch as the tenants continue to be in possession of the respective portions, the stand taken by P.W. 1 cannot be believed. The Counsel also made elaborate submissions relating to I.T. Clearance and U.L.C. Clearance as well. The Counsel also would point out that Ex. A.13 - the G.P.A. did not authorize the father but entered into an agreement of sale of this nature. Hence, in this view of the matter, the delivery of cheque by father would assume some importance. The Counsel also would maintain that the pleading is that P.W. 1 delivered the cheque but the evidence is otherwise - the father had delivered the cheque as G.P.A. In the light of the overall facts and circumstances since several suspicious circumstances had been pointed out, the trial Court is well justified in negativing the relief of specific performance. The learned Counsel pointed out that when the delivery of cheque by the father in relation to the loan transaction had been believed, the trial Court ought not have decreed the suit even for the refund of amount but however the Counsel would submit that inasmuch as on the ground of equity, the refund had been ordered, the legal representatives are not seriously disputing the same. The Counsel also made certain submissions that even certain adverse findings recorded can be agitated in an appeal, without preferring independent appeal. While concluding, the Counsel would submit that merely because the agreement of sale had been proved, always it is not necessary to decree the suit for specific performance and the relief of specific performance being a discretionary relief, the discretion to be exercised on sound judicial principles. The Counsel also placed strong reliance on certain decisions. 5. Heard the Counsel on record and perused the oral and documentary evidence available on record and the findings recorded by the trial Court. 6. The following points arise for consideration in this appeal: (1) Whether negativing the relief of specific performance be justified in the facts and circumstances of the case? (2) Whether granting of the relief of refund in the absence of specific plea or specific prayer granted by the trial Court to be confirmed or to be disturbed in the facts and circumstances of the case? (3) If so, to what relief the parties would be entitled to? 7. Points 1 and 2:-The plaintiffs in O.S. No. 84/86 on the file of IV-Additional Judge, City Civil Court, Hyderabad, had preferred this appeal. As already specified supra, the respondent - original defendant is no more and the legal representatives are contesting the litigation. The parties hereinafter would be referred to as plaintiffs and defendant as shown in O.S. No. 84/86 for the purpose of convenience. 8. It is averred in the plaint that the defendant approached the plaintiffs offering to sell his property for Rs. 2,00,000/- to meet his expenses and requirements and the plaintiff agreed to purchase the same for Rs. 2,00,000/-. The defendant executed an agreement of sale on 25.4.1985. The plaintiffs paid an advance of Rs. 1,00,000/-under a cheque dated 25.4.1985 on Grindeys Bank and the defendant received the said advance of Rs. 1,00,000/- and also

acknowledged the same. Under Clause 3 of the agreement the plaintiff shall pay the balance amount of Rs. 1,00,000/- within seven months from the date of agreement and on payment of the same, the defendant shall execute a registered sale deed, as otherwise, the plaintiff shall obtain the specific performance of agreement of sale, through the Court and also for costs. The defendant agreed to produce the required permission under Urban Land Ceiling for sale in favour of the plaintiff and also Income Tax clearance certificate within the stipulated period of seven months from the date of agreement. The stipulated period expired on 25.11.1985 and the plaintiffs are always ready and willing to pay the balance amount of Rs. 1,00,000/- and they have been requesting the defendant to receive the same and execute the sale deed after complying with the formalities. The plaintiffs also issued a legal notice on 15.11.1986 when the defendant failed to execute the sale deed within the stipulated time. The defendant was also informed that if he fails to do so within three days they will invoke the clause of the agreement and take necessary legal steps. The defendant received the notice on 19.11.1985 by endorsing the same on the Xerox copy of the notice. They sent a copy of the legal notice to the defendant's house also, which was returned unserved and the returned cover is filed. Hence, the plaintiffs filed the suit for specific performance of agreement of sale by receiving Rs. 1,00,000/9. The defendant, who is no more, denied the allegations and pleaded that he is the absolute owner and possessor of the double storied building bearing No. 2-2-1123/ 2/B at Nallakunta, Hyderabad. It is false that he agreed to sell the same for Rs. 2,00,000/- and that he executed an agreement of sale on 25:4.1985 in favour of the plaintiffs and that he received Rs. 1,00,000/- as advance by cheque. It is stated that the defendant and the plaintiffs are friends and the defendant was in need of amount for his business requirement and he requested plaintiff No. l's father to accommodate him and advance Rs. 1,00,000/for a period of one year and he also agreed to pay the interest and accordingly the plaintiff No. 1's father agreed to advance Rs. 1,00,000/- on condition that the defendant shall deposit the title deed pertaining to the profit since the defendant is in urgent need and he has no alternative except to agree for the said condition. Hence the father of the first plaintiff obtained the title deed and also obtained signature of the defendant on the blank non-judicial stamp and also on some white and other papers and the defendant with full confidence on the 1st plaintiffs father put his signatures on the above blank papers. The defendant never intended to sell his house as alleged and the plaintiff also never intended to sell his house as alleged and the plaintiff also never intended to purchase it. It is false that the defendant should pay the amount within the period of seven months. The suit filed with a view to grab the valuable property of the defendant. The defendant denied the factum of validity and unenforceable of the agreement dated 25.4.1985. The agreement is void and illegal and unenforceable. The other allegations are denied. On receipt of notice from the plaintiff, the defendant approached the plaintiff and enquired about the allegations. The first plaintiff explained and got believed the defendant saying that the said notice was got issued formerly and promised to withdraw the same as soon as he received the amount of Rs. 1,00,000/-and believing the said statement of the 1st plaintiffs father, the defendant did not give any reply. Later, in the second week of December, the defendant approached the first plaintiffs father with the sum of Rs. 1,00,000/- and requested him to receive the same and return the title deed and also the blank papers and other signed papers, signed by him, and the first plaintiff's father evaded to receive the amount and return the documents with mala fide intention to grab the property. The question of readiness and willingness on the part of the plaintiff to pay the balance consideration does not arise. Since the said document is unenforceable and void and the defendant is ready even now to repay the said amount. 10. The following issues were settled by the trial Court: (1) Whether the plaintiffs are entitled for specific performance of an agreement of sale from the defendant after receiving the balance consideration of Rs. 1/- lakh in respect of the suit schedule property as prayed for? (2) Whether the suit agreement of sale dated 25.4.1985 is void and illegal and unenforceable against the defendant? (3) To what relief? 11. The first plaintiff examined himself as P.W. 1 and the attestor was examined as P.W. 2. P.Ws. 1 and 2 categorically deposed relating to the execution of Ex. A.1. As against this evidence, the evidence of D.W. 1 and D.W. 2 is available on record. D.W. 1 deposed in detail relating to the defence taken by him in the written statement and D.W. 2 is just a formal witness. Ex. A.1 is agreement of sale; Ex. A.2 is the notice; Ex. A.3 is the postal acknowledgement; Ex. A.4 to Ex. A.8 are Xerox copies of the receipts of Punjab and Sind Bank Ltd.; Ex. A.9 is the Xerox copy of passport; Ex. A.10 and Ex. A.11 are the original transfer of residence issued by Air Custom, New Delhi, dated 28.1.1985; Ex. A.12 is the pass book of Grindlays Bank Ltd., and Ex. A.13 is the G.P.A. dated 27.3.1981. The trial Court at Paras 8 and 9 observed as hereunder:

It is clear from his evidence, that he borrowed the amount of Rs. 1,00,000/- from the father of the first plaintiff and did not execute the suit agreement. Admittedly, cheque for Rs. 1,00,000/- was given by the lather of P.W. 1 and not P.W. 1. Since it is the specific case of the defendant the plaintiff ought to have examined the father of P.W. 1 and he was kept back from the Court and was not made available for cross-examination of the defendant to deny the contention of the defendant. The father of P.W. 1 is a material witness in the case and no reason is given for not examining him and adverse presumption has to be drawn against the plaintiffs. The evidence of first plaintiff as P.W. 1 clearly shows that he was not present when his father gave the cheque for Rs. 1,00,000/-and he did not sign Ex. A.1 though the agreement is between the defendant and himself and his wife. It also shows that he was not present when Ex. A.1 was executed. He might be at Hyderabad but he was not present, when Ex. A.1 was executed. The presence of the second plaintiff is also doubtful As otherwise she would have signed Ex. A.1. P.W. 1 did not explain as to why his father had to pay the amount by way of cheque to the defendant when he obtained the suit agreement Ex. A.1. When he was examined in chief on 8.4.1988, he stated as if the plaintiffs gave the cheque. When he was recalled and further examined on 2.8.1989 he stated his father gave the cheque. It was not stated even in the plaint that P.W. l's father gave the cheque. He tried to explain that his father is his power of attorney and hence he gave the cheque but it is not alleged in the plaint. It shows that it is clearly an after thought to explain the issuance of the cheque by the father, who is not examined. There is no proof that P.W. 1's father issued the cheque towards the advance sale consideration under the agreement Ex. A.1, as it was not given in the presence of the witnesses as is clear from the evidence of P.W. 2, who is one of the attestors of Ex. A.1. The evidence of P.W. 2 clearly shows that Ex. A.1 was not executed by defendant and he must have attested the document Ex. A.1, which was typed on the papers containing the signatures of the defendant. 12. The Counsel on record while making elaborate submissions relied upon the decision of the Division Bench of this Court in J. Lakshman Rao and Ors. v. Ellandu Ravinder and Anr. CCCA No. 340 of 2003, dated 15.11.2006, 2007 (3) ALD (NOC) 59, and also Thota Kanakadurga Varaprasad Rao v. Madapati Chandra Sekhara Reddi MANU/AP/0339/2002 : 2002(3)ALD97 ; Lahiri v. Prem Prakash MANU/RH/0615/2006; S.V. Sankaralinga Nadar v. Ratnaswami Nadar and Ors. AIR 1952 Mad. 389; Indian Bank, Chittoor v. V.R. Venkataraman and Ors. MANU/AP/1062/2003 : 2004(4)ALD307 ; Sughra Bee v. Kareez Fatima Qureshi MANU/AP/0238/2004 : 2004(3)ALD821 ; Manickathammal v. Nallasami MANU/TN/0215/1977 : AIR1977Mad83 ; Sarju Pershad Ramdeo Sahu v. Jwaleshwari Pratap Narain Singh MANU/SC/0002/1950 : [1950]1SCR781 ; Madhusudan Das v. Narayani Bai MANU/SC/0147/1982 : [1983]1SCR851 ; State of W.B. v. Mir Fakir Mohd. MANU/WB/0008/1977 : AIR1977Cal29 ; P. Pandit Rao (Died Per LRs) and Ors. v. K. Damodar and Anr. MANU/AP/0534/2005 : 2005(5)ALD646 ; S. Venkateswar Rao v. State of A.P. 1996 (4) ALD 1135 (DB); Vinod Kumar v. Surjit Kumar MANU/SC/0827/1987 : [1987]3SCR552 . 13. The non-examination of the father, especially in the context of admission made by P.W. 1 relating to delivery of cheque and the defence taken by D.W. 1 relating to the loan episode, had been commented upon by the Counsel on record in elaboration. It appears the said father being no more, there is no opportunity of examining the father. It is pertinent to note that in the light of the stand taken by respondent-defendant the burden is heavy on the defendant even as observed by the trial Court. The question is whether on the aspect of the episode of loan or on the aspect of undue hardship, principally on the ground that the value of the property as specified in Ex. A.1, the sale consideration is exorbitantly low, the respondent had not chosen to examine any witness or had not chosen to place acceptable evidence before the Court. It is true that the learned Judge pointed out certain suspicious circumstances, these aspects appear to be certain developments in the evidence. The purchase of the stamp paper as such may not alter the: situation when the stand taken by the defendant is that the signatures are of that of defendant as admitted by D.W. 1. Apart from all these aspects of the matter, there is yet another problem. It is the specific case of the plaintiff and further as deposed by P.W. 1 that the amount by way of cheque had been paid by him and the deduction was made from his account only and it is immaterial if the delivery of cheque had been given by the father of P.W. 1 as such. This variance by itself cannot be inferred that the payment of consideration was by the father and not by the son P.W. 1. It is no doubt a long pending litigation. It is also true that always the relief or specific performance automatically need not be decreed merely because the agreement of sale Ex. A.1 is said to have been proved in accordance with law. It is also true that the discretionary relief of specific performance to be granted or to be negatived based on sound judicial principles. It is also true that D.W. 1 also was agreeable for the repayment of the amount and equally the Counsel representing the legal representatives would submit before the Court that these parties are ready and willing to refund the said amount. In the event of the Court arriving at a conclusion that there is a breach of contract, certain other further consequences also flow therefrom.

14. On a careful analysis of the pleadings, this Court is also satisfied that the respective pleadings are devoid of certain factual details and the improvements made at the stage of evidence, had been commented upon. Hence, in the light of the facts and circumstances, especially the plea of undue hardship and the valuation of the property, this Court is of the considered opinion that the evidence available on record to arrive at either of the conclusions, either in favour of the plaintiffs or in favour of the original defendant and the present legal representatives of the defendant, being highly insufficient, and in the light of the peculiar findings recorded by the trial Court ordering refund even in the absence of the prayer for the alternative relief, this Court is of the considered opinion that this is a fit matter to make an order of remand to permit the parties to put in additional pleadings as well and also permit the parties to let in further evidence and record appropriate findings in accordance with law. It is true that the original defendant is no more and at present the legal representatives are available and in view of the limitations placed on the legal representatives in putting up further amendments to the original written statement, liberty is given to the respondents to put in additional written statements, if they are so advised, only within the limitations permissible by law. 15. Point No. 3:--In the light of the findings recorded above, this Court is left with no other option, except to set aside the Decree and Judgment of the trial Court and make an order of remand for the purpose of affording opportunity to both the parties, to put in additional pleadings as specified supra and also to let in further evidence and record appropriate findings in accordance with law. In view of the fact that the matter is an old one, the learned Judge to give top priority for the early disposal of the matter. As this Court is making an order of remand, the parties to bear their own costs.

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MANU/MH/0465/2007 Equivalent Citation: 2007(5)ALLMR822, 2007(5)BomCR425, (2007)109BOMLR1472

IN THE HIGH COURT OF BOMBAY AT AURANGABAD First Appeal No. 277 of 1992 and Civil Application Nos. 2111, 2466 and 2467 of 1992 Decided On: 19.07.2007 Appellants: Hanusingh S/o Harsingh Chavan and Dr. Rajasingh S/o Harisingh Chavan, (Chauhan) (died through his L.Rs. Rajkumari Rajasingh Chauhan and Ors.) Vs. Respondent: Amnaji S/o Bhaurao Wadje and Vijay S/o Digambar Choudhary Hon'ble V.R. Kingaonkar, J. Counsels: For Appellant/Petitioner/Plaintiff: P.M. Shah, Sr. Adv. for Shah and Mukul Kulkarni, Advs. for Appellants No. 1 and 2A to 2I Judges:

D.P.

Palodkar, A.P.

For Respondents/Defendant: R.N. Dhorde, Adv. for B.A. Darak, Adv. for Respondent No. 1 and B.S. Kudaley, Adv. for Respondent No. 2 Subject: Property Catch Words Mentioned IN Acts/Rules/Orders: Hyderabad Tenancy and Agricultural Lands Act, 1950 - Sections 38E, 50A and 50B; Transfer of Property Act - Section 53A; Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act - Section 89; Specific Relief Act, 1963 - Section 20; Civil Procedure Code (CPC) - Order 6, Rule 4 Cases Referred: Asudamal S/o Laxmandas Sindhi v. Kisanrao S/o Wamanrao Dharmale and Ors. 2003 (4) Mh.L.J. 134; Balu Baburao Zarole and Ors. v. Shaikh Akbar Shaikh Bhikan and Ors. A.I.R. 2001 BOMBAY 364; Dnyanoba Sukhdeo Lande and Anr. v. Shrirang Mahataraji Dhurwade 1982 (2) Bom. C.R. 18; Gobind Ram v. Gian Chand (2000) 7 Supreme Court Cases 548; Kisan Ramji Khandare v. Kausalyabai Gangaram and Ors. 2007 (3) Bom. C.R. 118; Nasrullakhan Bismill Khan since deceased through L.Rs. v. Shahbuddin s/o Syed Hussain and Ors. 1994 (3) Bom. C.R. 488; Nirmala Anand v. Advent Corporation (P) Ltd. and Ors. (2002) 5 Supreme Court Cases 481; Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son SCC 14; Shri Parshuram Kathod Gaikwar v. Pandu Mahadu Hard and Anr. 1994 (1) Bom. C.R. 715; Varanasaya Sanskrit Vishwavidyalaya and Anr. v. Dr. Rajkishore Tripathi and Anr. A.I.R. 1977 SUPREME COURT 671 Citing Reference: * *** Mentioned Discussed

Asudamal S/o Laxmandas Sindhi v. Kisanrao S/o Wamanrao Dharmale and Ors. Balu Baburao Zarole and Ors. v. Shaikh Akbar Shaikh Bhikan and Ors.

*** ***

Dnyanoba Sukhdeo Lande and Anr. v. Shrirang Mahataraji Dhurwade Gobind Ram v. Gian Chand Kisan Ramji Khandare v. Kausalyabai Gangaram and Ors. Nasrullakhan Bismill Khan since deceased through L.Rs. v. Shahbuddin s/o Syed Hussain and Ors. *** Nirmala Anand v. Advent Corporation (P) Ltd. and Ors. Shri Parshuram Kathod Gaikwar v. Pandu Mahadu Hard and Anr. Varanasaya Sanskrit Vishwavidyalaya and Anr. v. Dr. Rajkishore Tripathi and Anr.

*** ***

Case Note: Property - Decree of Specific Performance - Validity of - Held, once it is found that the agreement of sale was not transfer of interest as such, there is no adequate reason to hold that it was a complete transfer due to delivery of possession There is no question of the Plaintiffs claim regarding plea of part performance because he did not claim delivery of possession at the time of the agreement of sale nor his pleadings would show that any protection under Section 53A of the Transfer of Property Act was sought by him - Agreement to sale does not create any interest in the property and hence enforcement of such agreement can be sought - For, execution of the conveyance would be only after grant of sanction by Collector - Thus, decree nici can be passed without difficulty - In this view of the matter there is no error committed by the Trial Court while granting the decree for specific performance subject to condition that the Defendant Nos. 1 and 2 shall obtain the necessary sale permission Property - Undue Advantage - Escalation of Market Price - Whether the agreement of sale gives undue advantage to Plaintiff Amnaji and is inequitable - Held, market price of the suit land had escalated tremendously when question of specific performance was required to be considered as per terms of agreement Agreement was conditional - Condition surely was disadvantageous and inequitable to vendors - Court cannot be mute spectator in such situation - Grant of decree for specific performance of contract is not automatic - Court has to consider whether it will be fair, just and equitable to grant such relief - Plaintiff cannot be allowed to take unfair advantage - In view of mitigating circumstances, Defendants No. 1 and 2 (Appellants) will be entitled to additional amount as compensation due to escalation of the prices - Impugned Judgment and decree will have to be, therefore, modified to this extent Civil - Forged Documents - Whether Appellants properly pleaded and proved that blank stamp paper signed by them was misused and agreement of sale was forged and fabricated - Held, evidence adduced falls too short to prove that the said document was fabricated and their signatures were obtained on blank stamp papers - Agreement of sale was not proved to be forged and fabricated one - Story put forth by Defendant Nos. 1 and 2 illogical and unacceptable - Trial Court rightly held, that the agreement of sale was proved - Appellants however failed to prove that the signed blank stamp paper was misused and there was no agreement of sale as such between them and the Plaintiff Contract - Specific Performance - Whether it is proved that Plaintiff was ready and willing to perform his part of the agreement - Held, Plaintiffs case was more probable and acceptable - His version purports to show that he took immediate action thereafter and demanded the specific performance - He proved his readiness and willingness to perform his part of the agreement Property - Collusion - Held, mere proximity of the properties and good relations between them will not be a sufficient ground to reach conclusion that they are in collusion with each other Ratio Decidendi: Mere proximity of the properties and good relations between the parties will not be a sufficient ground to reach conclusion that they are in collusion with each other. Grant of decree for specific performance of contract is not automatic. Court has to consider whether it will be fair, just and equitable to grant such relief. No party can be allowed to take unfair advantage over the other.

JUDGMENT V.R. Kingaonkar, J. 1. Challenge in this Appeal is to Decree for specific performance of an agreement of sale. 2. Appellants are original Defendant Nos. 1 and 2. They are real brothers inter-se. Respondent No. 1 Amnaji is original Plaintiff and Respondent No. 2 Vijay is original Defendant No. 3. Appellant No. 1 Hanusingh is agriculturist in whose name land bearing Survey No. 42 of Mukhedkar was declared as a statutory tenant under provisions of Section 38-E of the Hyderabad Tenancy and Agricultural Lands Act, 1950. Deceased appellant No. 2 Rajasingh was a registered medical practitioner. 3. Subject matter of the suit is three (3) acres land out of Survey No. 42, which admeasured 4 acres 20 gunthas, as described in the claim clause. Though the land Survey No. 42 was cultivable in the past and was being used for agricultural purposes, yet due to a proximity of a State Transport Bus Stand, it was converted to non agricultural use. Already remaining one (1) acre twenty (20) gunthas land is divided into plots which are sold away. The suit land is the only parcel of the land which is lying fallow and is yet not actually being used for non agricultural purpose. 4. Original PlaintiffAmnaji filed suit (Special Civil Suit No. 32 of 1990) for specific performance of an agreement of sale dated 29/8/1982 allegedly executed in his favour by appellants-original defendant Nos. 1 and 2 in respect of the suit land. 5. Back ground facts of the litigation may be briefly stated as follows: One Gangi Wd/o Gangayya owned the suit land. A certificate of statutory ownership was issued in favour of defendant No. 1 Hanusingh, declaring him as a protected tenant of the said land. In 1963 the price amount of Rs. 3000/- was deposited by him. The land lady Gangi Wd/o-Gangayya-had started eviction proceedings against him. She died later on. One Dattu claimed himself as an adopted son of said Gangi. He filed Suit (Special Civil Suit No. 45 of 1970) for declaration that certificate of the statutory ownership granted in favour of Hanusingh was invalid. He claimed eviction decree against defendant Nos. 1 to 3 and other persons. That suit was decreed on 15/1/1975. The decree was challenged before the High Court in First Appeal No. 63 of 1975 by the defendant Nos. 1 and 2. This Court allowed the Appeal on 7/9/1990. A Special Leave Petition filed by said Dattu was dismissed by the Apex Court. It was after decision of the First Appeal No. 63 of 1975 that respondent No. 1plaintiff Amnaji filed the suit for specific performance of agreement of sale. 6. The plaintiff's case was that defendant Nos. 1 and 2 were in need of finance to meet out expenditure of the litigation started by said Dattu. They agreed to sale the suit land to him for consideration of Rs. 3,00000/- (Rs. Three Lakhs). The terms of agreement were orally settled on 22/8/1982. Both of them executed a written agreement of sale in his favour on 29/8/1982 after receiving Rs. 50,000/- (Rs. Fifty Thousand) as earnest amount. It was agreed between them that after decision of the First Appeal, which was pending before the High Court, the defendant Nos. 1 and 2 shall deliver possession of the suit land to him and would execute registered sale deed in his favour after receiving the remaining consideration of Rs. 2,50,000/- (Rs. Two Lakhs Fifty Thousand). It was further agreed that the defendant Nos. 1 and 2 would obtain necessary sale permission from the Collector as required under the Tenancy Law. It was agreed between them that in case of failure on part of the defendant Nos. 1 and 2 to deliver possession, even after their success in the Appeal, plaintiff Amnaji would be entitled to enter into possession of the suit land on his own accord. The cost of registration and incidental expenditure was to be borne by him. It was further agreed that in case of failure of the defendant Nos. 1 and 2 to get favourable decision in the First Appeal, the earnest amount would be returned to him. 7. The plaintiff-Amnaji averred that he was ready and willing to perform his part of the agreement of the sale. He came across a public notice published in local newspapers dated 13/9/1990 that defendant Nos. 1 and 2 had agreed to alienate the suit land in favour of defendant No. 3 Vijay. He requested the defendant Nos. and 2 (Appellants) to perform their part of the agreement of sale. They avoided to do so. He issued a notice dated 22/11/1990 and called upon them to execute a registered sale deed on accepting balance consideration of Rs. 2,50,000/ (Rs. Two Lakhs Fifty Thousand ). On their non compliance, he filed the suit. 8. Original defendant Nos. 1 and 2 (Appellants) resisted the suit alleging that there was no agreement of sale in respect of the suit land. They contended that the document styled as agreement dated 29/8/1982 is false and fabricated. They denied that amount of Rs. 50,000/- (Rs. Fifty Thousand) was paid to them by plaintiffAmnaji as earnest money. They denied all the material averments made by him. They asserted that during pendency of the First Appeal filed by them against said Dattu, in 1982 or 1985 a group of some villagers and

Advocate Shri Ugrasenrao Mukhedkar made an attempt to settle the dispute between them and said Dattu. They asserted that their signatures were obtained on blank stamp papers so as to scribe settlement of terms with said Dattu. The blank stamp papers were retained by one of the intervenor, namely, Hanumant Tukaram Patil. They delivered the signed blank stamp paper to him in good faith because they reposed confidence in him. There was, however, no settlement with said Dattu and the talks of settlement fizzled out. They contended that after the decision of the First Appeal they remembered that those signed stamp papers had remained in custody of said Hanumant Tukaram Patil. So they got published a notice in local newspaper and informed all concerned that those stamp papers are likely to be misused for preparation of false documents. They asserted that plaintiff Amnaji is close friend of defendant No. 3 Vijay and he is practically his agent. They further asserted that the plaintiff filed false suit on the basis of fabricated document styled as Sauda Chitthi (agreement) dated 29/8/1982, at the behest of defendant No. 3 Vijay. On these premises, they sought dismissal of the suit. 9. Original defendant No. 3 resisted the suit alleging that he had agreed to purchase the entire land Survey No. 41/1 from defendant Nos. 1 and 2 as per terms of an agreement of sale dated 29/10/1989. He denied that the agreement of sale was entered into between plaintiff - Amnaji and the defendant Nos. 1 and 2 on 29/8/1982. He contended that the suit was filed in collusion with defendant Nos. 1 and 2. According to him, defendant Nos. 1 and 2 had agreed to withdraw their First Appeal bearing No. 63 of 1975 on his making payment of Rs. 6,11,000/- (Rs. Six Lakhs Twelve Thousand). He had entered into separate agreement with said Dattu to purchase the said land. Said Dattu had executed a sale deed in favour of himself and others. He further asserted that he had filed a Special Civil Suit (Special Civil Suit No. 27 of 1990) against defendant Nos. 1 and 2 for specific performance of the agreement of sale and therefore they managed to file the suit through plaintiff Amnaji so as to defeat his claim. Hence he urged to dismiss the suit. 10. The parties went to the trial over the issues framed below Exhibit No. 43. The learned trial Judge held that the agreement of sale is a genuine document. The trial court came to the conclusion that the plaintiff did not prove his possession over the suit land. The trial court further held that the agreement in question is enforceable if sale permission is granted by the competent authority. The trial court held further that plaintiff Amnaji was ready and willing to perform his part of the agreement and hence was entitled to decree for specific performance of the agreement. The trial court decreed the suit in keeping with the above findings. 11. Original plaintiff Amnaji has preferred cross objections against findings of the trial court in respect of possession. He alleges that his lawful possession over the suit land ought to have been held as proved and decree for perpetual injunction sought by him should have been granted. 12. Mr. P.M. Shah, learned senior Advocate would submit that the agreement of sale (Exhibit 73) is artificially prepared document because it is written up to approximately middle portion of the stamp paper though large space was available. He would submit that when the litigation was pending between said Dattu and defendant Nos. 1 and 2 then ordinarily a prudent man would not have entered into such an agreement. For, said Dattu had been successful in the trial court and there was uncertainty about the claim of defendant Nos. 1 and 2. He would further submit that the close scrutiny of the agreement (Exhibit 73) itself shows that it might have ben written afterwards to adjust the recitals in as much as space between two lines is marginal at the bottom side. He pointed out that plaintiff Amnaji was working as an employee of co-operative bank. He contended that presence of plaintiff Amnaji at the time of said agreement was improbable because as per certificate issued by the bank officer at Exhibit 72, he was supposed to be on duty. He argued that there are several documents to show that the plaintiff is put up by the defendant No. 3 to any how grab the suit land for palpably low price. He contended that defendant No. 3 Vijay is the real plaintiff and attempted to play a double-cross game by obtaining sale deed from said Dattu on one hand and putting up plaintiff Amnaji to get the decree for specific performance against defendant Nos. 1 and 2 on the other hand. It is argued that plaintiff Amnaji failed to prove as to how he was able to raise the amount of Rs. 50,000/- (Rs. Fifty Thousand) at the relevant time though his salaried income was insufficient. It is argued that false document was prepared with the help of stock witnesses and the conduct of plaintiff Amnaji is highly suspicious. 13. Mr. Shah further submitted that the trial court failed to see that the transfer is invalid as per Section 50-B of the Hyderabad Tenancy and Agricultural Lands Act. He argued that the plaintiff's case was that he entered into possession of the suit land on his own. So, he would submit that the transfer was violative of provisions of the Hyderabad Tenancy and Agricultural Lands Act. He contended that the trial court did not properly appreciate the relevant evidence and the decree is unsustainable. He further contended that the prices of the land have shot-up during the intervening period and therefore the so-called agreement must be regarded as inequitable. Hence, he urged to allow the Appeal.

14. As against this, learned Advocate Mr. Dhorde, appearing for the respondent No. 1 plaintiff Amnaji, would submit that the agreement of sale is a genuine document. He contended that after the decision of the First Appeal filed against Dattu within few days defendant No. 3 Vijay got published a notice dated 13/9/1990 claiming himself as prospective purchaser in accordance with the agreement dated 29/10/1989. He would submit that plaintiff Amnaji came to know about such agreement claimed by the defendant No. 3 and hence immediately took steps to put forth his claim. Mr. Dhorde would submit that contention of the defendant Nos. 1 and 2 that in 1982 or 1985 some blank stamp paper was signed by them, is too vague and omnibus averment. He submitted that there were no details of any fraud played on the defendant Nos. 1 and 2 and mere vague allegation can not be accepted. He contended that plaintiff Amnaji and his witnesses have duly proved execution of the agreement of sale (Exhibit 73) and the decree of the trial court is well justified. He would submit that mere escalation of the prices cannot be a ground to deny the relief of specific performance. 15. Mr. Kudale, learned Advocate appearing for defendant No. 3 Vijay contended that the suit is outcome of collusion between the plaintiff and defendant Nos. 1 and 2. He contended that the defendant No. 3 had entered into prior agreement of purchase with defendant Nos. 1 and 2. He argued that the suit filed by the defendant No. 3 Vijay is earlier in point of time, yet it was stayed by the court on application of defendant Nos.1 and 2, without substantial reason. 16. The substantial points involved in this Appeal are thus: (1) Whether the appellants properly pleaded and proved that a blank stamp paper signed by them was misused and the agreement of sale (Exhibit 73) is a forged and fabricated document? (2) Whether it is proved that the appellants agreed to transfer the suit land by way of sale in favour of plaintiff Amnaji for consideration of Rs. 3,00000/- (Rs. Three Lakhs) and an amount of Rs. 50,000/- (Rs. Fifty Thousand) was paid by him at the time of execution of agreement of sale dated 29/8/1982 (Exhibit 73)? (3) Whether it is proved that plaintiff Amnaji was ready and willing to perform his part of the agreement? (4) Whether the agreement in question is invalid and is unenforceable for the reason that it is a transfer of the tenanted land without permission of the competent authority and is violative of Section 50-B of the Hyderabad Tenancy and Agricultural Lands Act, 1950? (5) Whether the agreement of sale gives undue advantage to plaintiff Amnaji and is inequitable?. My findings on these points are: (1) No (2) Yes (3) Yes (4) No (5) Yes. The reasons are described hereinafter: 17. At the out set, let it be noted that for the first time the defendant Nos. 1 and 2 showed sign of awakening in respect of the stamp papers signed by them when they got published a notice in the local newspaper on 11/9/1990, which was published on 15/9/1990. It is pertinent to note that defendant No. 3 Vijay had already filed suit against them on 15/9/1990 before they claimed that blank stamp papers signed by them were likely to be misused. The recitals of the said notice (Exhibit 115) would show that it was vaguely asserted that the defendant Nos. 1 and 2 remembered about leaving of signed stamp paper with said Hanumantrao Tukaram Patil in 1982 or 1985. The pleadings of the defendant Nos. 1 and 2 would show that they vaguely pleaded that from 1970 to 1989 prices of the lands and plots had escalated to sky high position and said Dattu had handed over reigns of the litigation to defendant No. 3 Vijay. They further alleged that defendant No. 3 had formed a group of persons like Hanumantrao Patil, Debadvar, Raosaheb Patil and Advocate Shri Ugrasenrao Mukhedkar. They further alleged that "said persons" in 1982 or 1985 made an attempt to settle the matter by securing their signatures and that of said Dattu on blank stamp papers, but the matter could not be settled. The documents were kept in the custody of Hanumant Tukaram Patil in good faith and belief. In other words, the pleadings of the defendant Nos.1 and 2 are suggestive of alleged fraud played on them. 18. The plea of fraud cannot be vaguely adopted. The particulars of such plea must be given by the party. In Varanasaya Sanskrit Vishwavidyalaya and Anr. v. Dr. Rajkishore Tripathi and Anr. A.I.R. 1977 S C 671 the Apex Court held that general allegation that there was 'collusion' without more particulars would be insufficient. Unless the allegations are specific and details are given, such pleadings cannot be considered. So also, this Court in Kisan Ramji Khandare v. Kausalyabai Gangaram and Ors. 2007 (3) Bom. C.R. 118 held that plea of fraud cannot be accepted without there being particulars in the pleading as required under Order 6 Rule 4 of the Code of Civil Procedure. The appellants, no doubt tried to show

that plaintiff Amnaji owns a plot adjacent the plot of defendant No. 3 Vijay and that their lands are in the proximity of each other. They tried to show that plaintiff Amnaji was on friendly terms with defendant No. 3 Vijay. Mere proximity of the properties and good relations between them will not be a sufficient ground to reach conclusion that they are in collusion with each other. 19. Though defendant Nos. 1 and 2 claimed that the signed blank stamp paper was kept with Hanumantrao Tukaram Patil due to mutual trust and because they reposed confidence in him, yet there was no reason for them to allow him to keep the custody of such signed blank paper after the so-called talks of settlement had fizzled out. They had no business to sign the blank stamp paper when the settlement had yet not been made. Moreover, none of the independent witness has supported their such contention. Conversely D.W. Hanumantrao Patil denied that any such document was kept with him. The version of D.W. Hanumantrao Patil purports to show that in his presence the appellants entered into an agreement with the defendant No. 3. He categorically states that defendant No. 1 and 2 had never submitted any blank stamp paper signed by them for the purpose of settling the dispute. He referred to such transaction between the appellants and defendant No. 3, which was entered into somewhere in 1989. His version purports to show that defendant No. 3 Vijay had served a notice on him to return the said document and therefore he had returned it. In any case, his version does not show that the defendant Nos. 1 and 2 had kept a signed blank stamp paper with him in 1982 or 1985. He was examined as a witness by defendant No. 3 Vijay. 20. On perusal of the evidence tendered by D.W. Hanumansingh alias Hannusingh and D.W. Rajasingh, it is amply clear that both of them are experienced and matured persons. Admittedly, both of them were active politicians. They were members of Municipal Council. They used to run a boarding institution called Nehru Boarding Hostel. The deceased defendant No. 2 was vice chairman of the association of the freedom fighters. He was also chairman of sale-purchase co-operative society for five years. He was chairman of marketing committee. The defendant Nos. 1 and 2 were not the ordinary gullible persons. They were litigating with said Gangi Wd/o-Gangayya since long. They were well aware of the legal implications of their so-called act of signing the blank stamp papers. Obviously, it does not stand to reason that they had forgotten to collect such a stamp paper from D.W. Hanumantrao Patil though it was left with him in 1982 or 1985. 21. They adduced oral evidence of D.W. 3 Shaikh Husain in support of their contention regarding signing of the blank stamp papers. D.W. Shaikh Husain states that in the month of August, 1982 there were talks of settlement between said Dattu and defendant Nos. 1 and 2. He deposed that a meeting was held at the house of defendant Nos. 1 and 2 and then defendant No. 3 Vijay, one Dhondu Debadwar, D.W. Hanumantrao Patil and one Raosaheb Patil suggested that if both the sides would hand over blank stamp papers signed by them, then they would try for amicable settlement. Thereafter stamp papers were purchased and were signed by said Dattu and the defendant Nos. 1 and 2. According to him, defendant Nos.1 and 2 had asked him on 2-4 occasions that the blank stamp paper was with D.W. Hanumantrao Patil. They continued to ask him about such stamp paper for about 2-4 years thereafter. His evidence shows, therefore, that defendant Nos. 1 and 2 had not forgotten about the so-called signed blank stamp papers. Needless to say, the subsequent allegation that they remembered about such a signed stamp paper after the decision of the First Appeal in September, 1990, is unbelievable and unconvincing story. 22. D.W. Shaikh Husain is a chance witness. He had no particular reason to attend the socalled meeting nor he is signatory of any document. It is more probable that he entered the witness box only with a view to oblige defendant Nos. 1 and 2. 23. At this juncture, it may be mentioned that D.W. 5 Dinkarrao was examined by the defendant Nos. 1 and 2 in support of their case regarding fabrication of the document (Exhibit 73). He is handwriting expert. He was unable to give opinion whether the document in question was written subsequently after the signatures were made by the defendant Nos. 1 and 2. He states that the document may be result of accommodative writing. His version reveals that in the said document (Exhibit 73) there was awkward spacing in the line Nos. 12 and 13. His version purports to show that if signatures are obtaining on blank stamp paper, it would be necessarily at the bottom of the document and not at the middle. Needless to say, his version is of no assistance to the defendant Nos. 1 and 2(Appellants). Their evidence falls too short to prove that the said document was fabricated and their signatures were obtained on blank stamp papers. The trial court rightly held, therefore, that the agreement of sale is not proved to be forged and fabricated one. 24. Coming to the versions of P.W. 1 Amnaji and his witnesses, it may be stated that they have rendered consistent evidence regarding terms of the agreement and execution of the agreement of sale (Exhibit 73). P.W. 2 Daulat is the scribe of said document. P.W. 3 Kishan is the attesting witness thereof. It is the version of P.W. Amnaji that while he was in service at Mukhedkar he was residing in the premises owned by defendant Nos. 1 and 2 as their

tenant. His version purports to show that defendant Nos. 1 and 2 intended to alienate the suit land. He agreed to purchase the same for consideration of Rs. 3,00000/- (Rs. Three Lakhs). His version purports to show that the agreement of sale (Exhibit 73) was reduced in writing as per terms of oral agreement which was settled on 22/8/1982. He deposed that after the decision of the First Appeal preferred by the defendant Nos. 1 and 2, further performance of the agreement was to be effected. His version purports to show that he came across notice dated 13/9/1990 which was published in a local newspaper which indicated that defendant No. 3 Vijay had agreed to purchase the suit land. He learnt that the First Appeal was decided on 7/9/1990 by the High Court, in favour of the defendant Nos. 1 and 2, and hence he requested them to accept the remaining consideration amount and execute the sale deed. He further stated that he had entered into possession as per the oral agreement. His cross examination reveals that his father owned lands at village Masalga and village Yeloor. He had joined the service as supervisor in the scale of Rs. 60-4100 in 1971. His pay scale at the relevant time was Rs. 910-40-1200. It could be around Rs. 310 in 1980. Still, however, it cannot be said that he was unable to raise the earnest money because his salaried income was negligible. As stated before, he owned other agricultural lands. How he raised money is not so much so important. Whether he paid the amount to the defendant Nos. 1 and 2 is the material aspect. His version shows that witness Apparao Patil was working as servant of defendant No. 3 Vijay and had signed some of the sale deeds as an attesting witness. He admits that personally he had not enquired about exact tenancy rights in respect of the suit land. He had not enquired whether the suit land was ordered to be restored in favour of said Dattu. He admitted that his attendance in the office shown in the letter (Exhibit 72) is correctly indicated but explained that he had obtained oral permission to leave the head quarter. Mere production of such letter would not show that the plaintiff was unable to remain present at the time of the agreement of sale. He admitted that he had agreed to purchase the suit land though there was risk of adverse decision in the Appeal. That also would not demolish his case because there was no actual risk for him since his earnest money was secured. The defendants No. 1 and 2 had agreed to return the said amount in case of their failure in the Appeal proceedings filed in this Court against said Dattur and others. 25. I have gone through the evidence tendered by P.W. Daulat and P.W. Kishan. Both of them are signatories of the agreement of sale (Exhibit 73) as scribe and attesting witness. Their evidence purports to show that defendant Nos. 1 and 2 agreed to transfer the suit land by way of sale for consideration of Rs. 3,00000/- (Rs. Three Lakhs) to plaintiff-Amnaji. They corroborated his version regarding due execution of agreement of sale (Exhibit 73). Their evidence reveals that it was agreed between the parties that the sale permission would be obtained by defendant Nos. 1 and 2. Though the writing style of the document gives impression that improper spacing was left between the two lines yet it is difficult to say that same was prepared afterwards in order to accommodate the signatures. As stated by D.W. 5 Dinkarrao, who is handwriting expert, if the signatures are to be obtained on blank stamp paper, it would be necessarily at the bottom of the document and not at the middle. Obviously if the signatures of defendant Nos.1 and 2 had to be taken on blank stamp paper, in the normal course, they would have been taken at the bottom of the stamp paper. The story put forth by the defendant Nos. 1 and 2 is illogical and unacceptable. The talks of the compromise had begun somewhere in 1989. There was no reason to purchase a stamp paper in 1982 for such a purpose when the talks regarding settlement of compromise were not contemplated. For, the First Appeal filed by defendant Nos. 1, 2 and others had not yet become ripe for final hearing. 26. One cannot be oblivious of the fact that defendant No. 3 Vijay had issued a notice dated 13/9/1990 regarding his agreement of sale. The wisdom had allegedly dawned and memory struck on the defendant Nos. 1 and 2 thereafter. They suddenly remembered that a blank stamp paper was signed by them in 1982 or 1985 and was handed over to Hanumant Patil. The plaintiff issued notice dated 22/11/1990 (Exhibit 65) and demanded specific performance of the agreement of sale. The notice of the plaintiff was replied by defendant Nos. 1 and 2 vide Exhibit 69. They alleged that their signatures were obtained on blank stamp papers in 1982 and 1989 and that fact was known to local M.L.A. Madhukar Dhote and other respectable persons. Still, however, no respectable person entered the witness box in support of such contention. 27. The trial court duly appreciated the evidence on record. I am of the opinion that the trial court rightly held that the agreement of sale (Exhibit 73) is proved. The appellants however failed to prove that the signed blank stamp paper was misused and there was no agreement of sale as such between them and the plaintiff. If Advocate Shri Ugrasenrao Mukhedkar was also a party to such an attempt of settlement between themselves and said Dattu, they would have examined said Shri Ugrasenrao Mukhedkar Advocate in support of their defence. The plaintiff's case is more probable and acceptable. The plaintiff's evidence purports to show that his claim was deferred till decision of the High Court in the First Appeal preferred by the defendant Nos. 1 and 2 and he became entitled to obtain the specific performance only after 7/9/1990. His version purports to show that he took immediate action thereafter and demanded the specific performance. He proved his readiness and willingness to perform his part of the agreement.

28. Mr. Shah, seeks to rely on Dnyanoba Sukhdeo Lande and Anr. v. Shrirang Mahataraji Dhurwade MANU/MH/0410/1981 : 1982(2)BomCR18 and Shri Parshuram Kathod Gaikwar v. Pandu Mahadu Hard and Anr. MANU/MH/0609/1993 : 1994(1)BomCR715 . According to learned Senior Advocate Mr. Shah, the transfer is invalid because the plaintiff claimed himself to be in possession. A Single Bench of this Court held in "Dnyanoba Sukhdeo Land and another" (supra) that the words 'transfer' used in Section 50-A of the Hyderabad Tenancy and Agricultural Lands Act has a wider meaning. It is held that a party cannot be allowed to override the provisions of Section 50-B by device such as an agreement of sale and continue in possession thereof claiming right under Section 53-A of the Transfer of Property Act. It is further held that such a transfer would amount to defeating the provisions of the Hyderabad Tenancy and Agricultural Lands Act. Similar is the view expressed in Shri Parshuram Kathod Gaikwar v. Pandu Mahadu Hard (supra). 29. The trial court rendered finding that respondent No. 1/ plaintiff Amnaji was not in possession of the suit land. The intrinsic evidence appearing from the document styled as Sauda Chitthi (agreement Exhibit 73) shows that the land was permitted to be used for non agricultural purpose. The defendant Nos. 1 and 2 had obtained such permission from the competent authority. The disputed three acres land was lying fallow whereas other part was plotted. There is not a single revenue entry to show that the plaintiff was in possession of the suit land at the time of filing of the suit. It cannot be ignored that he filed suit within a short span after decision of the First Appeal preferred by the defendant Nos. 1 and 2. The vague version of the plaintiff, in this behalf, is uncorroborated by any reliable evidence. His cross objection is without any merit. 30. Once it is found that the agreement of sale was not a transfer of interest as such, there is no adequate reason to hold that it was a complete transfer due to delivery of possession. There is no question of the plaintiff's claim regarding plea of part performance because he did not claim delivery of possession at the time of the agreement of sale nor his pleadings would show that any protection under Section 53-A of the Transfer of Property Act was sought by him. Both the above referred decisions, which are relied upon by learned senior Advocate Mr. Shah, pertain to the claim in respect of protection under Section 53-A of the Transfer of Property Act. In such context it was held that the agreement of sale accompanied by the transfer of possession was invalid and no protection could be claimed by the prospective purchaser under Section 53-A of the Transfer of Property Act. The fact situation in the present case stands on different footings. The plaintiff is not claiming any protection under Section 53-A nor it is proved that possession of the suit land was delivered to him in pursuance of the terms of the agreement. 31. In Case of Nasrullakhan Bismill Khan since deceased through L.R.s v. Shahbuddin s/o Syed Hussain and Ors. MANU/MH/0751/1994 : (1994)96BOMLR889 it is held that Section 50-B does not create a legal bar to suit for specific performance. It is held that though the Section declares that the land shall not be transferred without the previous sanction of the Collector, it is no bar to the institution of a suit for specific performance. In Asudamal S/o Laxmandas Sindhi v. Kisanrao S/o Wamanrao Dharmale and Ors. MANU/MH/0494/2003 : 2004(2)BomCR361 a Single Bench of this Court held that lack of permission under Section 89 of the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, is not an impediment in passing decree for specific performance. So also in Balu Baburao Zarole and Ors. v. Shaikh Akbar Shaikh Bhikan and Ors. MANU/MH/0633/2001 : AIR2001Bom364 it is held that decree for specific performance, granted subject to sanction of transfer permission by Collector, was not improper. It is observed that an agreement to sale does not create any interest in the property and hence the enforcement of such agreement can be sought. For, execution of the conveyance would be only after grant of sanction by the Collector. Thus, " decree nici" can be passed without difficulty. In this view of the matter there is no error committed by the trial court while granting the decree for specific performance subject to condition that the defendant Nos.1 and 2 shall obtain the necessary sale permission. 32. This takes me to determine the question as to whether decree for specific performance could be granted without considering equities and the developments which occured after the agreement of sale. There cannot be any doubt about the fact that the suit land is most convenient for residential and commercial purposes because it is in the proximity of S.T. bus stand of Mukhedkar. I may take judicial notice of the fact that Mukhedkar is a small town having facilities like bank, colleges, Tahasil office and other offices. There is a Civil Court at Mukhedkar. The suit land has potential commercial value in view of its prime location. It is situated by side of main road leading to township of Mukhedkar. This fact is borne out from affidavit of Arunsingh s/o- Rajasingh Chauhan and there is no denial to it. Respondent Amnaji has filed an affidavit along with some copies of sale deeds. The plots out of Survey No. 37/3 were carved out and sold in 1990. It appears that the sale deeds were executed in respect of plots which were within local limits of Mukhedkar. As per version in the affidavit of Arunsingh S/oRajasingh Chauhan that land is at a considerable distance of about 3.5. k.m. The respondent-original plaintiff came out with a case that the defendant No. 3 Vijay had proclaimed himself to be prospective purchaser for consideration of Rs. 6,11,000/- (Rs.

Six Lakhs Eleven Thousand) as per the agreement dated 21/10/1989. Needless to say, there was escalation in the prices. 33. The conduct of the plaintiff would show that he was well aware about the litigation which was going on between the defendants and said Dattu. He contemplated some mutual settlement between them because the main question in that matter as to whether said Dattu was adopted son of deceased owner-Gangayya. Defendants No. 1 and 2 were in need of money. May be they were under the impression that the litigation would come to an end at an early point of time due to settlement. Both the parties were, therefore, rather unsure of their rights and hence it was a kind of secured investment for the plaintiff; whereas it was a kind of convenient deal for the defendants No. 1 and 2 if the First Appeal would have been settled due to intervention of some respectable persons. The First Appeal filed by the defendants in the year 1975 (First Appeal No. 63 of 1975) was heard and finally decided on 7/9/1990. Thus, at least from August, 1982 for about 8 years the specific performance could not be sought due to the pendency of said litigation. The rights of the parties remained dormant. In the meanwhile, there was escalation of prices. It appears from the price index produced by the appellants that currently the market rate of such open land is of Rs. 1350/-(Rs. One Thousand Three Hundred Fifty) per square feet. The plot of 10,650 square meter is valued at Rs. 81,00,000/- (Rs. Eighty One Lakhs). There cannot be any difficulty in holding that the market price of the suit land had escalated tremendously when the question of specific performance was required to be considered as per terms of the agreement. 34. The defendants No. 1 and 2 (appellants) could not be held guilty of committing breach of the terms of the agreement (Exhibit 73) at least uptill 1990. The agreement was conditional. The condition surely was disadvantageous and inequitable to the vendors. The Court cannot be a mute spectator in such a situation. The grant of decree for specific performance of contract is not automatic. The Court has to consider whether it will be fair, just and equitable to grant such relief. The defendants No. 1 and 2 tried to wriggle out themselves of the contract because of escalation in the prices of the real estate. The plaintiff cannot be allowed to take unfair advantage over the appellants. The market price of the suit land in the relevant period i.e. 1990 could be determined at least as Rs. 10,00000/ (Rs. Ten Lakhs). This can be gathered from the fact that defendant No. 3 Vijay desired to purchase the suit land for about Rs. 6,00000/- (Rs. Six Lakhs) in 1989 and naturally it was so because the said price was much less than the actual market price. The Appeal preferred by the defendants No. 1 and 2 was not even decided at that time and yet he was ready to pay such a huge price. Considering the price which he was ready to pay and the price index of 2007, a golden mean can be derived. I am of the opinion, therefore, that the suit land was worth Rs. 10,00000/- (Rs. Ten Lakhs) in 1990. 35. In Gobind Ram v. Gian Chand MANU/SC/0607/2000 : AIR2000SC3106 the Apex Court held that the vendor's hardship may be mitigated by directing vendee to pay further compensatory amount. The Apex Court observed: 6. Next decision on which learned Senior Counsel for the appellant relied is in Parakunnan Veetill Joseph's Son Mathew v. Nedumbara Kuruvila's Son. We may extract the relevant portion of the said Judgment: (SCC p.345, para 14) 14. Section 20 of the Specific Relief Act, 1963 preserves judicial discretion of courts as to decreeing specific performance. The court should meticulously consider all facts and circumstances of the case. The court is not bound to grant specific performance merely because it is lawful to do so. The motive behind the litigation should also enter into the judicial verdict. The court should take care to see that it is not used as an instrument of oppression to have an unfair advantage to the plaintiff. 7. It is the settled position of law that grant of a decree for specific performance of contract is not automatic and is one of the discretions of the court and the court has to consider whether it will be fair, just and equitable. The court is guided by principle of justice, equity and good conscience. As stated in P.V. Joseph's Son Mathew the court should meticulously consider all facts and circumstances of the case and motive behind the litigation should also be considered. 36. The legal position would be further explicit from Dictum in Nirmala Anand v. Advent Corporation (P) Ltd. and Ors. MANU/SC/0455/2002 : AIR2002SC2290 . The relevant observations may be usefully quoted as follows: Courts are not bound to grant specific performance merely because it is lawful to do so unmindful of equities to be balanced and despite serious inequities that may necessarily result by granting the same. Specific performance being an equitable relief, balance of equities have also to be struck taking into account all these relevant aspects of the matter, including the lapses which occurred and parties respectively responsible therefor. Before decreeing specific performance, it is obligatory for courts to consider whether by doing so any unfair advantage would result for the plaintiff over the defendant, the extent of

hardship that may be caused to the defendant and if it would render such enforcement inequitable, besides taking into consideration the totality of circumstances of each case. 37. From the foregoing discussion and on consideration of the settled legal position, it it conspicuous that the balance will have to be struck having regard to equities and the respondent No. 1 (plaintiff) cannot be allowed to gain unfair advantage when he knowingly entered the legal gamble. The escalation in prices could be advantageous to him only to some extent. The vendors cannot be deprived of the benefits. Obviously, if the respondent No. 1 Amnaji is ready and willing to purchase the suit land for consideration of Rs. 9,00000/- (Rs. Nine Lakhs) then also he will gain advantage because the market price in 1990 was approximately Rs. 10,00000/- (Rs. Ten Lakhs). I am of the opinion that in view of mitigating circumstances, the defendants No. 1 and 2 (appellants) will be entitled to additional amount of Rs. 6,00000/- (Rs. Six Lakhs) as compensation due to escalation of the prices. The impugned Judgment and decree will have to be therefore modified to this extent. 38. In the result, the impugned Judgment and decree is maintained and the Appeal is dismissed subject to condition that the respondent No. 1 (plaintiff) shall pay further additional amount of Rs. 6,00000/- (Rs. Six Lakhs) to the appellants by way of compensation on account of escalation of the prices of the land in question. The said payment shall be made at the time of the registration of the sale deed if the sale permission is granted in favour of appellants or on their failure it is granted in favour of the respondent No. 1-plaintiff-Amnaji. Civil Applications are also dismissed as the same are untenable. No costs.

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MANU/AP/0518/2005 Equivalent Citation: 2005(5)ALT421 IN THE HIGH COURT OF ANDHRA PRADESH AT HYDERABAD First Appeal No. 89 of 1995 Decided On: 20.06.2005 Appellants: Appana Pullam Raju Vs. Respondent: Central Bank of India and Ors. Hon'ble P.S. Narayana, J. Counsels: For Appellant/Petitioner/Plaintiff: M.S. Ramachandra Rao, Adv. For Respondents/Defendant: C.V. Rajeeva Reddy, Adv. for Respondent No. 1 and N.V. Suryanarayana Murthy, Adv. for Respondent No. 4 Subject: Banking Catch Words Mentioned IN Acts/Rules/Orders: Banking Regulation Act, 1935 - Sections 21, 35(A), 139 and 141; Companies Act, 1956; Andhra Pradesh General Sales Tax Act; Civil Procedure Code (CPC) - Sections 34 and 100(1) - Order 34, Rule 11 Cases Referred: Shashi Kumar Banerjee v. Subodh Kumar Banerjee, AIR 1964 SC 529; Bhagwan Kaur v. Maharaj Krishna Sharma, AIR 1973 SC 1346; Pirbhu Dayal v. Tula Ram, AIR 1922 All. 401; Birbal Singh v. Harphool Khan, AIR 1976 All. 23; Kundan Lal Ralla Ram v. Custodian Evacuee Property, Bombay, AIR 1961 SC 1316; Shaikh Edadut Ali v. Muhammad Fareed, 35 Ind. Cas. 56 : AIR 1916 pat. 206; Mirza Gorgani v. Bhola Mal Nibalchand, AIR 1934 Lah. 293(2); V. Ram Chandra Ayyar v. Rama Lingam Chettiar, AIR 1963 S.C. 302; Loonkaran Sethia v. Ivan E. Johna, AIR 1977 SC 336; S. Perumal Reddiar v. Bank of Baroda, AIR 1981 Madras 180; State Bank of Saurashtra v. Chitranjan Rangnathm, AIR 1980 SC 1528; State Bank of India v. Praveen Tanneries, 1992 (3) ALT 353; Wulff v. Jay, 1872 (7) QB 756; Rees v. Barrington, 30 Eng. Reports 765; Radha Agencies and Ors. v. Vijaya Bank, Bhimavaram Branch, 2002 (1) An.W.R. 117 : 2002 Supp. (2) ALD 857; Sri Panduranga Traders v. State Bank of India, Vatluru Branch, 2000 (2) ALT 511 : 2000 (3) ALD 134; Central Bank of India v. Ravindra, AIR 2001 SC 3095;N.M. Veerappa v. Canara Bank, AIR 1988 SC 1101; State Bank of India v. Yasangi Venkateswara Rao, AIR 1999 SC 896 Disposition: Appeal dismissed JUDGMENT P.S. Narayana, J. 1. The Central Bank of India, the 1st respondent herein/plaintiff instituted the suit O.S.No.78/81 on the file of Subordinate Judge, Ramachandrapuram, as against M/s. East Coast Oil Expellers Limited, and others for recovery of amount by passing a preliminary mortgage decree and also the other suitable reliefs inclusive of personal decree as against certain of the defendants and the learned Subordinate Judge on appreciation of the evidence available on record decreed the suit by Judgment dated 25-8-1994 as against all the defendants and the same had attained finality as against all the other defendants except the 7th defendant since the other defendants had not chosen to challenge the said Judgment and decree. However, aggrieved by the same, the 7th defendant alone had preferred the present Appeal. Judges:

2. Sri Ramachander Rao, the learned Counsel representing the appellant/7th defendant had taken this Court through the respective pleadings of the parties and the issues settled and the findings recorded by the trial Court and would maintain that there are several serious infirmities which had lost sight of by the trial Court and in view of those infirmities, the suit as against the 7th defendant should have been dismissed. The learned Counsel in all fairness would maintain that the 7th defendant also had not seriously controverted about the original guarantee letter dated 13-4-1970 since the execution of the same had been admitted and at the best the 7th defendant can be fastened with liability to a tune of Rs. 60,000/- and not beyond thereto. The learned Counsel also pointed out that even as per para-11 of the plaint it is clear that the negligence had been on the part of the Bank inasmuch as there was failure on the part of the Bank to protect the security and in this view of the matter guarantors' liability came to an end. The learned Counsel also pointed out the memo filed by the plaintiff in this regard to the effect that there are no stocks either in the key godowns or the open loan premises. The learned Counsel also laid emphasis on the aspect that Mutyala Srihari Rao at the relevant point of time was not one of the Directors and as per Ex. A-10 it is clear that the 3rd defendant came in the place of the said Mutyala Srihari Rao and the fact that several documents referred to the name of Mutyala Sri Hari Rao would go to show that the 2nd defendant in collusion with the Bank had manipulated these records and hence on the strength of such documents, the 7th defendant cannot be fastened with liability. The learned Counsel while further elaborating his submissions commented that Ex.A-24 would go to show that this is a document to be executed by borrowers only and not by guarantors but however surprisingly the signature of the 7th defendant also is found. The learned Counsel also had taken this Court through the evidence of D.W.5 and had commented that the trial Court had not attached much importance to the evidence of the expert who had given categorical opinion about the difference of signatures. The Counsel also pointed out the infirmities in Exs.A-25, 52, 53, 57, and A-58. The learned Counsel had pointed out that even if the amounts mentioned in the promissory notes are to be taken as they are, the total amount had not been borrowed even as per the stand taken by the Bank. The learned Counsel also would point out the difference of signatures even to the naked eye apart from the expert evidence in this regard. The learned Counsel pointed out the difference of dates in the seriatim in the documents produced by the Bank and would comment that all these aspects would go to show that these records had been manipulated by the Bank at the instance of the 2nd defendant. The Counsel would maintain that the 2nd defendant obtained the signatures of the 7th defendant in blank papers and could have manipulated all the records in collusion with the Bank to his advantage. The learned Counsel also pointed out the interpolation in the documents and the clear negligence especially on the part of the Bank by virtue of which it can be inferred that there had been collusion between the 2nd defendant and the Bank officials. The learned Counsel made elaborate submissions on the liability of the surety and the liability of the guarantor and when it would come to an end or when it should have been deemed to have been terminated vis-avis the negligence on the part of the Bank in this regard. The learned Counsel also would submit that merely because the signature had been admitted it does not mean that the execution had been admitted. Admission of signature is something different from admitting the execution of a document and the Bank miserably failed in proving the execution of the relevant documents in general and Ex.A-58 in particular by the 7th defendant and hence the plaintiff is bound to fail as far as the claim as against the appellant/ 7th defendant is concerned. The learned Counsel also pointed out that in view of Order 34 Rule 11 of the Code of Civil Procedure and inasmuch as this Court can exercise the discretion, interest to be granted at 6%. Ultimately the Counsel would conclude that in the light of the facts and circumstances at the best the 7th defendant can be fastened with the liability limited to Rs. 60,000/- covered by the original guarantee letter and nothing beyond thereto and the interest granted by the trial Court also is excessive and the discretion had not been exercised properly and hence the Appeal may have to be allowed in toto or at least to the extent as indicated above. The learned Counsel also placed reliance on certain decisions to substantiate his contentions. 3. Percontra, Sri Rajiva Reddy, the learned Counsel representing the Central Bank of India, hereinafter in short referred to as Bank for the purpose of convenience made the following submissions. The learned Counsel had taken this Court through the evidence of P.W.1, P.W.2 and P.W.6 and had explained that P.W.6 categorically deposed about the execution of the documents inclusive of Ex.A-58 by the 7th defendant and P.W.1, P.W.2 and P.W.6 are disinterested witnesses, just officials of the Bank and their evidence cannot be doubted in any way. The learned Counsel also would maintain that the stand taken by the appellant/7th defendant that the Bank had colluded with the 2nd defendant definitely cannot be sustained. There was absolutely no negligence on the part of the Bank. The Bank only had pleaded what had happened and how in a high handed manner the 2nd defendant had acted and this will not amount to negligence on the part of the Bank so as to have the effect of discharging the guarantor's liability. The learned Counsel also had drawn the attention of this Court to relevant provisions of the Code of Civil Procedure and the Banking Regulation Act and would comment that this being a commercial transaction, the trial Court in fact had exercised the discretion properly and the same need not be disturbed by reducing the interest in any way. The learned Counsel also had taken this Court through the evidence available on record in general and the evidence of P.W.1, P.W.2 and P.W.6 and

D.W.2 in particular and would submit that in the light of the stand taken by the 7th defendant putting forth the theory of obtaining signatures in blank papers, the variance of signatures and the other aspects which had been pointed out by the learned Counsel for the appellant would fall into insignificance. The Bank is not at all concerned with the internal problems inter se between the defendants as such from the bickering in between those parties. The original borrowers or the guarantors as the case may be and the Bank is interested in recovering the loan which had been advanced to the 1st defendant Company and inasmuch as the 7th defendant also stood as a guarantor, he cannot escape the liability. The Counsel also commented that the evidence of D.W.5 is only that of an expert. However, P.W.1, P.W.2 and P.W.6 had well deposed relating to execution of the documents and the filling up of the printed forms by the concerned Bank officials for the execution of the documents by the guarantors and they had well established and proved and the minor discrepancies pointed out cannot be seriously considered so as to reverse the well considered findings recorded by the trial Court and hence the Appeal is liable to be dismissed. 4. Heard the Counsel on record and perused the respective pleadings of the parties, the oral and documentary evidence available on record and the findings recorded by the trial Court relating to the Issues which had been settled by the trial Court. 5. The parties hereinafter would be referred to as plaintiff and the 7th defendant respectively for the purpose of convenience. 6. As already referred to supra, the Bank instituted the suit for recovery of amount on the strength of mortgage. The 7th defendant alone had preferred the present Appeal who examined himself as D.W.2 before the trial Court. The plaintiff pleaded in the plaint as hereunder: The 1st defendant is a limited Company incorporated under the Companies Act, 1956 with its Head Office and Factory at Vemulapalli, Dwarapudi Railway Station, East Godavary District engaged in the manufacture and sale of vegetable oils, soaps, cosmetics etc. The 1st defendant Company after receipt of industrial licences and other relevant licences and the project feasibility report, duly obtained the Certificate of Incorporation, the letter of commencement of business and held the statutory meeting as required by the Companies Act. Defendants 2 to 4 are the Directors of the 1st defendant Company and the 2nd defendant is its Managing Director. Defendants 5 to 7 are the guarantors for the various facilities granted to the 1st defendant, the scope and extent of guarantee being the total amount of principal sums in addition to interest, costs etc., for all the facilities. The 8th defendant is also a guarantor, the extent to which he stood guarantee being a maximum principal sum of Rs. 60,000/- in addition to interest and costs. Late A.B.T. Sundaram, another guarantor who stood guarantee to the maximum principal sum of Rs. 1,25,000/- in addition to interest and costs, having passed away leaving defendants 8, 9 and 10 as her only heirs related as son, daughter and son respectively, liability of 8 to 10 defendants is limited to the assets of A.B.T. Sundaram in their possession and enjoyment. It is further pleaded that the 1st defendant applied for and obtained provisional facilities by way of two term loans each for Rs. 30,000/- for purposes of purchase of machinery and construction of factory sheds respectively and Rs. 30,000/- under open loan facility from the plaintiff at its Branch Office, Kakinada, East Godavari District in April 1970 and after availing the two term loan facilities fully, requested for transfer of the accounts to the Rajahmundry Branch after applying for enhanced limits of the existing facilities and requesting forgrant of fresh facilities. The two term loan accounts were transferred to Rajahmundry Branch in June 1970 and thereafter accounts for the various facilities were being operated at Rajahmundry branch only. While the term loan for machinery was paid and the account closed on 17-71970, the account with reference to the other term loan for building continued to be operated by the 1st defendant taking further amounts by way of fresh advances. The further limits sanctioned namely Rupees one lakh for construction of Factory Sheds by way of a term loan; Rs. 65,000/- for purchase of machinery; Rs. 1,50,000/- for key loan; Rs. 30,000/- under open loan and Rs. 85,000/- against documentary demand bills were also transferred on 11-6-1970 to Rajahmundry branch. The said sanction of enhanced limits was made on condition that the 1st defendant deposits title deeds of the factory by way of equitable mortgage and defendants 5 to 7 agreeing to be guarantors. For the provisional limits already sanctioned and availed at Kakinada a demand promissory note by way of a collateral security for Rs. 30,000/-on 13-4-1970 towards term loan for building and another by way of collateral security for Rs. 30,000/- on 16-4-1970 towards the term loan for machinery were executed in favour of the plaintiff by the 1st defendant and the guarantors 5 to 7 defendants executed the letter of guarantee dated 13-4-1970 in favour of the plaintiff limiting their liability to the maximum principal sum of Rs. 60,000/-. The charge for Rs. 30,000/- on the loan against machinery was registered on 2-6-1970 with the Registrar of Companies, Andhra Pradesh purporting to be one in pursuance of the resolution of the Board of Directors dated 5-7-1970. The title deed of the Factory dated 1-6-1970 was sent to Rajahmundry office on 28-7-1970. In view of the sanction of higher limits the 1st defendant

drew amounts both in the term loan account for machinery commenced at Kakinada and transferred to Rajahmundry and continued at Rajahmundry and the term loan account for construction of factory sheds besides the open loan account and the key loan account for the total limits of Rs. 3,45,000/- sanctioned under the various heads of accounts excepting the limit of Rs. 85,000/- for bills purchased for which a separate agreement was taken on 25-8-1970 from the Directors and guarantors the demand promissory note by way of collateral security for Rs. 3,45,000/-dated 25-8-1970, the letter of application, continuing, letter accompanying the demand promissory note, waiver and letter undertaking not to create a charge were executed by the Directors 2 to 4 and the 1st defendant Company and also the guarantors, 5 to 7 defendants on 25-8-1970. The 1st defendant also executed letter of hypothecation dated 25-8-1970 for Rs. 30,000/- through its Directors, defendants 2 to 4, and the same was registered on 16-11-1970 with the Registrar of Companies. The letter of hypothecation of the same dated 25-8-1970 for Rs. 65,000/- creating a charge over the machinery was also executed and the same was registered on 28-11-1970 with the Registrar of Companies. The 1st defendant also executed the letter of pledge for Rs. 1,50,000/- dated 25-8-1970 delivering possession of the seeds, groundnuts etc. A copy of the resolution of the 1st defendant Company authorizing the Managing Director, 2nd defendant, to operate the account was also furnished. It was also further pleaded that there was a further enhancement granted increasing the limit of open loan from Rs. 30,000/- to Rs. 50,000/-. Also there was a further enhancement of the key loan limit by raising the same to Rs. 3 lakhs and the amount of the total facilities came to Rs. 6 lakhs, the break up being: Rs. 50,000/- Open loan Rs. 3,00,000/- Key loan Rs. 1,00,000/- Factory constructions Rs. 65,000/- for Machinery, and Rs. 85,000/- for Bills discounting facility The accounts in respect of each of the facilities were being operated by drawing monies and making payments in the accounts. The 1st defendant represented by defendants 2 to 4, its Directors and defendants 2 to 4 individually on 31-10-1970 executed the demand promissory note by way of collateral security for Rs. 5,15,000/- the limits for the bills discounting facility having been secured by a separate agreement earlier on 25-8-1970, the letter of waiver and the letter of continuity etc. The 1st defendant represented by defendants 2 to 4, its Directors and defendants 2 to 4 individually also executed the same day the demand promissory note dated 31-10-1970 by way of collateral security for the said total limits of Rs. 6 lakhs which included the amount of Rs. 85,000/- representing the facility for bills purchase in favour of the plaintiff promising to pay plaintiff or order the said sum with interest at 41/4% over the Reserve Bank of India rate with a minimum of 91/4% per annum with quarterly rests and the 1st defendant through the 2nd defendant executed the letter of waiver, the letter of continuity etc., besides the letter of hypothecation for Rs. 50,000/- creating a charge over the stock-in-trade such as copra, coconuts, groundnuts etc., and oils in tins, drums and loose which charge was registered with the Registrar of Companies, another letter of hypothecation for the amount of Rs. 65,000/- advanced against the security of the machinery of the 1st defendant. The 2nd, 3rd and 4th defendants also executed the letter of application dated 31-10-1970 giving details of the various facilities allowed by the plaintiff and offering defendants 5 to 7 as guarantors for the limits sanctioned. Defendants 5 to 7 also executed the letter of guarantee dated 6-11-1970 promising payment of the amount advanced to the 1st defendant upto the maximum principal amount of Rs. 6 lakhs in addition to interest and costs making themselves jointly and severally liable. The documents of pledge of goods for the enhanced limits of Rs. 3 lakhs was also executed the same day i.e., 6-11-1970. Earlier as per the conditions of sanction of higher limits paid by the plaintiff, the 1st defendant represented by defendants 2 to 3, deposited on 31-10-1970 sale deed of the factory site dated 1-6-1970 along with earlier documents of predecessor-in-title with the plaintiff at Rajahmundry and thereby created an equitable mortgage to cover the entire limits of Rs. 6 lakhs. Defendants 2 to 4 as per letter dated 3-11-1970 requested the plaintiff to furnish the list of title deeds deposited on 31-10-1970 and the plaintiff gave the necessary information. Thus the 1st defendant Company and its Directors, defendants 2 to 4, and guarantors defendants 5 to 7, became jointly and severally liable for all the amounts due under the various loan accounts besides the 1st defendant being liable on the basis of the equitable mortgage dated 31-10-1970 created for the total loan limits of Rs. 6 lakhs. The relevant resolution of the Board of Directors authorizing this transaction is herewith filed. The said charge for the total amount of facilities of Rs. 6 lakhs was registered with the Registrar of Companies as per certificate dated 8-11-1971.

It was further pleaded that while so it came to the notice of the officers of the plaintiff Bank in February 1971 that defendants 2 and 3 and their henchmen tampered with the goods in the key godown and furtively removed the goods in both open loan and key loan godowns. The inspection by the officers of the Bank revealed that the reports and stock statements given on behalf of the 1st defendant were false, misleading and that there were severe shortages both in the open loan goods and the key godown goods and that goods of different description from that of those mentioned in the lodgment and of value far less than declared were kept in the key godowns and that the Directors and their henchmen were responsible for the mess. The plaintiff Bank demanded payment of all amounts due and sealed the premises of the factory on 1 -3-1971 by locking the outer door of the building housing machinery by virtue of the provisions in the letter of hypothecation empowering plaintiff to take possession at his option. Confronted with such a situation and for some time avoiding being present in the factory premises even after receipt of the telegraphic notice, the 2nd and 3rd defendants having been detected by the external auditors in the inspection and inventory by them in the presence of the 2nd defendant on 10th and 11th March 1971 while admitting by letter dated 16-3-1971 that shortages and irregularities occurred in the stocks and owning the liability to make good for the loss without reference to the reasons for the said shortages, offered additional securities by making 8th defendant and late A.B.T. Sundaram, his mother stand guarantee for payment of maximum principal sums of Rs. 60,000/- and Rs. 1,25,000/- respectively as per letters of guarantee dated 25-3-1971 and 26-3-1971 respectively executed by them. Defendants 2 and 3 passed a letter to the plaintiff requesting time for payment and release of factory for working the same. A letter of hypothecation creating charge over the machinery to secure an amount of Rs. 60,500/- was also executed by 1st defendant on 26-3-1971 which charge was also registered on 6-5-1971 with the Registrar of Companies. The 2nd defendant also deposited his title deed dated 189-1969 pertaining to his individual immovable property with the plaintiff on 26-3-1971 at Rajahmundry as further security for all the amounts due. As the plaintiff did not agree to release the factory for fear of losing its security, the 2nd defendant confirming the misgivings of the plaintiff, actually trespassed into the factory breaking open the seals of the plaintiff Bank and committed theft of contents therein on 1-4-1971 and again on 27-91971 for which criminal cases are now pending. In the said circumstances the plaintiff Bank was left with no option except to institute the present suit. 7. Defendants 3,5,6,7 and 8 filed separate written statements though in substance the pleas raised are virtually the same. As against the respective written statements filed by the parties referred to supra, the plaintiff Bank filed specific rejoinder statements in reply to the written statements filed by the respective parties. In substance the stand taken by the guarantors is that the 2nd defendant had collected the blank papers with their signatures and had taken advantage of the situation and had manipulated these records in collusion with the Bank. Inasmuch as the other defendants had not preferred any Appeal as against the Judgment and decree of the trial Court it may be appropriate to have a look at the pleading, the written statement of the 7th defendant alone who is at present contesting the matter by preferring the present Appeal. It was pleaded by the 7th defendant at paras 4 to 11 as hereunder: The 2nd defendant casually got acquainted with this defendant. Taking advantage of the same, the 2nd defendant obtained signature of the 7th defendant on some papers. He was assured by the 2nd defendant that defendants 5 and 6 are also joining the execution on the said papers and that the said documents are a mere formality to be given in a routine way so as to enable the local officers of the plaintiff Bank to satisfy their higher officials in the matter of financial assistance to be extended to the 1st defendant Company. The 7th defendant never met any officials in the plaintiff Bank and they never explained to him anything about the document in question. Relying solely on the assurances of the 2nd defendant that there can be possibly no liability and that for whatever might come to pass defendants 5 and 6 will also be there to share any burden and also in the belief that defendants 2 to 4 are primarily, principally and ultimately liable this defendant put his signatures on some papers brought to him by the 2nd defendant. The 7th defendant learns that the signatures purporting to be that of the 5th defendant on the papers on which this defendant signed are not his signatures. The 7th defendant further learns that the signature purporting to be that of the 4th defendant on one of the documents signed by the 7th defendant is not his signature. The 7th defendant states that the assumption of liability on the part of defendants 2 to 4 and defendants 5 and 6 were a condition precedent and was the basis for the 7th defendant's consent to sign the papers brought to him by the 2nd defendant and in the absence of liability on the part of defendants 2 to 4 or any of them or of defendants 5 and 6 or either of them, the 7th defendant will not be liable for any part of the suit claim. It was further pleaded that the 7th defendant was informed by the 2nd defendant that his co-directors were substantially rich and as a matter of pure formality the plaintiff bank was asking for some documents to be signed by his friends. It was also further pleaded that defendants 2 and 4 and one Mutyala Sreehari were Directors of the 1st defendant Company for some time and thereafter the said Sree Hari resigned and 3rd defendant was appointed in his place. The 7th defendant is not aware as to what amount the 1st defendant Company was borrowing from the plaintiff Bank and what facilitates the plaintiff Bank was providing the 1st defendant Company. The 7th defendant applied for

permission to inspect the documents and on inspecting the same, the signatures purporting to be his on (1) Agreement for Bills dated 25-6-1970 and (2) Letter of application dated 256-1970 and (3) letter of guarantee dated 6-11-1970 are not his signatures. The 7th defendant is therefore not liable under the said documents. The signatures on (1) letter of guarantee dated 13-4-1970 and (2) letter of application dated 31-10-1970 were affixed in the circumstances and on the representations set out supra. It was further pleaded that the 7th defendant learns that the signature purporting to be that of the 5th defendant on letter of guarantee dated 13-4-1970 and of defendants 4 and 5 and letter of application dated 31-10-1970 are not theirs. Hence as stated supra, in the absence of liability of defendants 5 and 6 or either of them, the 7th defendant is not liable by virtue of the aforesaid documents. It was pleaded that the 7th defendant never borrowed any sums from the plaintiff Bank and hence the 7th defendant is not liable either as a borrower or guarantor. The 7th defendant also learns that there is no personal liability of the Directors under any of the documents listed in the plaint. Even on that ground the 7th defendant is not liable for the suit claim or any part thereof. The 7th defendant is not aware of the alleged enhanced limits that were sanctioned by the plaintiff Bank to the 1st defendant Company or the conditions on which they were sanctioned. The 7th defendant is not aware of the alleged execution of the various documents on 25-6-1970 and the signatures purporting to be that of the 7th defendant on letter of application dated 25-6-1970 and the agreement for bills dated 25-8-1970 are not the signatures of the 7th defendant and he does not incur any liability under the said documents. It was further pleaded by the 7th defendant that he is not aware of the various documents said to have been executed on 31-10-1970. The signatures of the 7th defendant on the letter of guarantee dated 6-11-1970 and on the stamped paper attached to it are not his signatures and therefore he cannot be held liable on documents (1) agreement for bills dated 25-8-1970, (2) letter of application dated 25-6-1970 (3) letter of guarantee dated 611-1970. It was further pleaded that the 7th defendant learns that defendants 2 to 4 joined the execution of various documents only in their capacity as Directors and not as individuals. As stated supra the 7th defendant affixed his signatures to the letter of guarantee dated 13-4-1970 and on letter of application 31-10-1970 on the assurance that defendants 2 to 4 as also defendants 5 and 6 will be joining the execution of those documents and that defendants 2 to 4 would be the persons that will be primarily, principally and ultimately liable if at all. Since defendants 2 to 4 have not joined the execution of the said documents in their individual capacity and that the signatures purporting to be that of 5th defendant is not his signature on the letter of guarantee dated 13-4-1970, the 7th defendant is not liable either under the letter of guarantee dated 13-41970 on which the 7th defendant affixed his signatures and other documents on which the signatures purporting to be those of the 7th defendant are not his. The 7th defendant also learns that the signatures purporting to be those of defendants 4 and 5 on letters of application dated 31-10-1970 are not theirs and so the 7th defendant also cannot be made liable. The 7th defendant is not aware of the various resolutions of the Board of Directors of the 1st defendant. At para-13 the 7th defendant also pleaded that the plaintiff Bank is bound to check open loan and key loan stocks periodically and also has to keep watch over the open loan account till they are in tact put in the godowns. They have to keep track of the honouring or dishonouring the documentary demand bills and take immediate and necessary action. They have also to get insured all the insurable goods and the Company's movable and immovable properties. They obviously failed awfully in discharging their duties and are grossly negligent. But for their gross negligence the shortage and irregularities referred to in para (11) of the plaint would not have occurred. Even after the discovery that the goods in key godown were tampered with as alleged by the plaintiff Bank and those in open loan and key loan godowns were removed the plaintiff Bank did not take any immediate action. It should have taken immediate precautions to safeguard Company's premises, machines and other property by employing additional watchmen and should have also alerted defendants 5 to 7 to enable them to safeguard their interest and mitigated their alleged liability as far as possible. The goods are of perishable nature and steps should have been taken immediately to sell the available stock by exercising the right of sale. This would have mitigated the alleged liability of defendants 5 to 7. Nothing is known about the fate of those goods till now. The plaintiff Bank is guilty of gross negligence and on that account the 7th defendant is discharged of his liability even if any. In any view not taking immediate action against the 1st defendant amounts to gross negligence and on that account also the 7th defendant stands discharged of the alleged liability. The plaintiff Bank gave time by extending to the 2nd defendant some respite in return for the security of his mother and brother. In the said circumstances, the plaintiff Bank must be deemed to have waived its claims on defendants 5 to 7. Certain other pleas relating to the bar of limitation and cause of action also had been taken. 8. In the rejoinder statement filed by the plaintiff as against the written statement of the 7th defendant, the allegations were denied and it was pleaded that the normal practice of

the Bank officials taking documents from the parties calling on them during office hours and the filling up of blanks by the bank officials in the presence of the parties to the documents and the parties then signing was followed in taking documents from the 7th defendant also. Further, it was pleaded it is the 7th defendant that signed the agreement of bills of 25-81970, letter of application dated 25-8-1970 and the letter of guarantee dated 6-11-1970. The alleged negligence on the part of the staff had been specifically denied. Specific stand was taken that the interest claimed is fair and reasonable as per the agreement between the bank and the parties with due regard to the variation in rates of the Reserve Bank of India from time to time. 9. On the strength of these pleadings, the following Issues and Additional Issue were settled: 1. Whether the 1st defendant Company is validly constituted and liable for the suit claim? 2. Whether the defendants 5 to 7 are guarantors for the liability of the 1st defendant Company? 3. Whether the condition precedent pleaded by defendant 5, 6 and 7 for liability of each of them separately springing up is true and valid? 4. Whether the Directors of the 1st defendant Company D-2 to D-4 are not personally liable and if so whether defendants 5 to 7 are also not liable? 5. Whether the letter of guarantee dated 13-4-1970, letter of application dated 31-10-1970 and the letter of guarantee dated 6-11-1970 were signed by the 5th defendant? 6. Whether the agreement for bills dated 25-8-1970 was signed by the defendants 6 and 7? 7. Whether the agreement for bills dated 25-8-1970 and letter of application dated 25-81970 and the letter of guarantee dated 6-11-1970 were signed by the 7th defendant? 8. Whether the letter of guarantee dated 6-11-1970 is valid for the reason it is not a tripartite agreement? 9. Whether the waiver pleaded by the defendants 5 to 7 is true or valid? 10. Whether interest is claimed is usurious or penal? 11. Whether amounts debited to Travelling Expenses are not recoverable? 12. Whether signatures of the 3rd defendants were obtained by the 2nd defendant under misrepresentation or fraud and whether plaintiff is answerable for the same? 13. Whether the 3rd and 4th defendants are not personally liable for the suit debt? 14. Whether the plea that suit claim is recoverable only against 1st defendant is true and valid? 15. Whether documents dt.31-10-1970 viz., the demand promissory note for Rs. 5,15,000/and Rs. 6,00,000/-and the letter of application etc., are not genuine? 16. Whether the 8th defendant is not a guarantor for the limit of Rs. 60,000/17. Whether the deceased A.B.T. Sundaram is a guarantor for the limit of Rs. 1,25,000/and if so whether defendants 8 to 10 are liable as heirs? 18. Whether the 18th defendant is not a necessary party to the suit? 19. To what relief is the plaintiff entitled and against whom? Additional Issue: Whether the 11th defendant is entitled to claim charge of Rs. 19,160/- as contended in the written statement of D-11? 10. The trial Court recorded the findings in detail and passed a preliminary decree on the strength of the mortgage and also the personal decree as against the respective parties and the findings recorded and the decree made as against all the other defendants had attained

finality and the 7th defendant alone is challenging the said findings by preferring the present Appeal. In the light of the peculiar facts of the case and inasmuch as the contest is limited to the 7th defendant only, the appellant herein, all the Issues and all the findings recorded by the trial Court need not be seriously adverted to and hence the following Points for consideration fall for consideration so far as they relate to the appellant/7th defendant: 1. Whether the appellant/7th defendant stood as guarantor for the loan and facilities advanced to the 1st defendant Company as contended by the 1st respondent/plaintiff? 2. Whether the agreement of bills dated 25-8-1970 and the letter of application dated 25-81970 and the letter of guarantee dated 16-11-1970 were signed by the 7th defendant as contended by the plaintiff? 3. Whether the findings recorded by the trial Court so far as they relate to the 7th defendant are liable to be confirmed or to be disturbed or in any way to be set aside by the appellate Court? 4. Whether the interest granted by the trial Court is to be disturbed or to be confirmed? 5. If so, to what relief the parties are entitled to? 11. Point Nos. 1 to 3: The trial Court recorded the evidence of P.W.1 to P.W.8 and D.W.1 to D.W.6 and also Exs.A-1 to A-94 and Exs.B-1 to B-32 were marked. There is no serious controversy to certain of the documents and findings in detail had been recorded by the trial Court. The findings in relation to the other defendants need not be seriously considered since, the other defendants had not preferred any Appeal. However, it may be appropriate to have a glance at the nature of documentary evidence relied upon by the respective parties which is as hereunder: Ex.A-1/13-4-1970 Director, the Ex.A-2/16-4-1970 Ex.A-3/ of Ex. A-4/16-4-1970 Registrar mortgaged Ex.A-5 & A-6 Ex.A-7 Ex.A-8 Ex.A-9 Director Ex.A-10/15-6-1970 the Company's property shown in the schedule referred to therein. True copies of statement of accounts Certificate of incorporation issued by the Registrar of Companies in respect of D-1 Company. Certificate for commencement of business issued by the Registrar of Companies in respect of D-1 Company. Registration certificate issued by the Assistant of Industries in respect of 1st defendant Company. True copy of the resolution passed by the Directors of the 1st defendant Company authorizing the 3 Directors namely, defendants 2, 3 and 4 to attest the common seal to the documents. True copy of the resolution passed by the Directors of the 1st defendant Company authorizing the Managing Director i.e., 2nd defendant to act on behalf of the defendant Company. Resolution passed by the Directors of the 1st defendant Company stating that all the resolutions dated 20-6-1970 have been recovered in the minutes book of the Company. True copy of the resolution of 1st defendant Company authorizing the 2nd defendant to draw the term and short term loans advanced by the bank. Application to the plaintiff bank at Kakinada to open account to do business, signed by all the three Directors. Declaration of assets and liabilities by 2nd defendant. Declaration of assets and liabilities executed by 3rd defendant. 2nd defendant. Demand promissory note for Rs. 30,000/- executed by D-1 through the 2nd defendant. Guarantee deed executed by defendants 2 to 4 in favour the plaintiff Bank. Certificate of registration of mortgage issued by the of Companies stating that the 1st defendant has Demand promissory note for Rs. 30,000/- executed by D-1 East Coast Oil Expellers, through its Managing

Ex. A-11/20-6-1970 1st Ex.A-12 & A-13

Ex. A-14/15-7-1970 Ex. A-15/13-4-1970 Ex.A-16/19-3-1970 Ex. A-17/19-3-1970

Ex. A-18/18-3-1970 Ex. A-19/18-3-1970 called Ex.A-20/14-3-1970 Ex.A-21 defendant Ex.A-22/1-5-1970 Ex.A-23/14-5-1970

Declaration of assets and liabilities of 5th defendant. Declaration of assets and liabilities by a person Mutyala Sriharirao in whose place 3rd defendant co-opted. Declaration of assets and liabilities by 4th defendant. Memorandum of Association of East Coast Oil Expellers Ltd and as per R-6 under the Bye-laws at page No. 4 the liability of the Members of 1st Company is limited. Letter addressed to the plaintiff Bank at Kakinada by D.W. 1 Company requesting to transfer the accounts to the branch at Rajahmundry. Letter from Kakinada branch office to the Chief Agent, Hyderabad showing the details of the loan sanctioned to the 1st defendant Company on the guarantee given by defendants 5 to 7. Agreement executed by the defendants 5 to 7 in favour of the plaintiff Bank at Rajahmundry to the Bill discounting facility. Letter of application addressed to the plaintiff Bank defendants 2 to 7 in respect of the credit facility provided by the plaintiff Bank. Agreement of hypothecation executed by defendant 2 to 4 on behalf of the 1st defendant. Certificate of registration of mortgage dated 31-10-1970 Agreement of hypothecation executed by 2nd defendant the Managing Director of the 1st defendant Company in favour of the plaintiff Bank. Certificate of registration of mortgage Office copy of the legal notice issued on behalf of the plaintiff Bank to the defendants 1 to 9 calling upon to liquidate the outstanding loan. Power of Attorney in favour of Marthandarao, the then Manager of the plaintiff Bank. True copies of statement of accounts Statement of bills purchased and outstanding adjustments by the plaintiff Bank on behalf of the 1st defendant Company. Letter addressed to the plaintiff Bank by all the admitting the responsibility for shortages in the

Ex.A-24/25-8-1970 Ex.A-25 by Ex.A-26 Ex.A-27 Ex.A-28/26-3-1971 Ex.A-29/28-3-1971 Ex.A-30/20-7-1972 Ex.A-31 Ex.A-32 to A-34 Ex.A-35 Ex. A-36/16-3-1971 Directors stocks

Ex.A-37/25-3-1971 Ex.A-38/26-3-1971

Ex.A-39 Ex.A-40 2nd Ex.A-41/25-8-1970 its Ex.A-42/25-8-1970 Ex.A-43/21-7-1970 Ex.A.44 Ex.A-45/25-8-1970 Ex.A-46/25-8-1970 Ex.A-47

in the godown and the premises of the Company and undertaking to repay the entire amount due to the plaintiff Bank under open loan and key loan accounts and document bills. Form of guarantee for advances and credit generally executed by 9th defendant standing as additional surety for Rs. 60,000/-. Form of guarantee for advances and credit generally dated 26-3-1971 executed by A.S.T. Sundaram offering additional surety for Rs. 1,25,000/- to the plaintiff Bank. Registered sale deed in favour of 2nd defendant deposited towards the equitable mortgage securing the outstanding loan amount to the plaintiff Bank. Letter addressed to the plaintiff Bank requesting to furnish the details of the deposit of title deeds by defendant on 26-3-1971. Demand promissory note for Rs. 3,45,000/- executed in favour of the plaintiff Bank for 1st defendant by Managing Director and other Directors. Letter of continuity executed by the Directors defendants 2 to 4. Letter of accompanying the demand promissory note executed by defendants 2 to 4. Letter of waiver by defendants 2 to 4. Letter undertaking the liability executed by Managing Director i.e., 2nd defendant. Agreement of hypothecation to secure demand cash credit against goods executed by defendants 2 to 4. Certificate of registration of mortgage

Ex.A-48/5-11-1970 Ex.A-49/25-8-1970 Ex.A-50 Ex.A-51

Ex.A-52/31 -10-1970 Ex.A-53/31 -10-1970 Ex.A-54/31 -10-1970 Ex.A-55/31 -10-1970 Ex.A-56 Ex.A-57 Ex.A-58/6-11-1970 Ex.A-59 Ex.A-60

Ex.A-61/3-11-1970 Ex.A-62

Ex.A-63/31 -10-1970 Ex.A-64/24-12-1970 Ex.A-65 Ex.A-66/24-12-1970 Ex.A.67 Ex.A-68 Ex.A-69/24-12-1970 Ex.70/26-12-1970 Ex.A-71 Ex.A-72/26-1-1970 Ex.A-73/22-1-1971 Ex.A-74 Ex.A-75/19-3-1970 Ex.A-76 Ex.A-77/11-7-1973 Ex.A-78 Ex.A-79 Ex.A-80 Ex.A-81, A-82, A-83 Ex.A-84 to A-88 Ex.A-89/25-10-1972 Ex.A-90/6-8-1972 Ex. A-91/6-8-1972 Ex.A-92/20-8-1972 Ex.A-93

Agreement of hypothecation securing demand cash credit against goods dated 5-11-1970 executed by defendants 2 to 4. Certificate of registration of mortgage Deed of pledge of goods to secure the demand cash credit executed by defendants 2 to 4 in favour of the plaintiff Bank. Letter addressed to the plaintiff Bank by defendants 2 to 4 informing the resolution passed, authorizing the 2nd defendant to operate the Bank account, on behalf of the 1st defendant. Demand promissory note for Rs. 5, 15, 000/- said to have been executed by defendants 2 to 4. Demand promissory note for Rs. 6 lakhs said to have been executed by defendants 2 to 4. Letter of waiver executed by 2nd defendant in favour of plaintiff Bank. Letter of continuity executed by 2nd defendant. Agreement of hypothecation to secure demand cash credit against goods executed by defendants 2 to 4. Letter of application admitting the loan facilities sanctioned to defendants 1 to 4 executed by defendants 5 to 7. Form of guarantee for advance and credits generally executed by defendants 5 to 7 Pledge of goods to secure demand cash credit for Rs. 3 lakhs executed by 2nd defendant for the 1st defendant Company. Title deed in respect of the land where the 1st defendant Company is situate and which was deposited with the plaintiff bank towards equitable mortgage Letter addressed to the plaintiff Bank by defendants 2 to 4 acknowledging the deposit of title deed of the factory premises on 31-10-1970 Copy of resolution showing the various kinds of loans granted to 1st defendant Company and also authorizing the 2nd defendant who is the Managing Director of 1st defendant Company to open various accounts with the plaintiff Bank and to operate. Certificate of registration of mortgage Letter addressed to M/s. K.V.N. Murthy & Co. asking to pay to the plaintiff Bank on demand Rs. 3484-69 ps. Letter addressed to M/s. K.V.N. Murthy & Co. to pay Rs. 3700/- on demand to the plaintiff bank. Way bill Letter of communication addressed to the plaintiff Bank by Andhra Bank, Narsipatnam Railway receipt Letter addressed to K.V.N. Murthy & Co. to pay Rs. 3484-69 on demand to the plaintiff. Parcel way bill Letter of communication from Andhra Bank, Parvathipuram to the plaintiff Bank Lorry receipt issued by S.R.M.T. parcel service. Letter of communication from S.B.I. Rajahmundry to the plaintiff Bank Acquaintance Roll Register of the plaintiff Bank, Rajahmundry Declaration of assets and liabilities by 6th defendant True copy of statement of account of open loan Statement of bills purchased and outstanding adjustment account of 1st defendant Company Statement of account of term loan Statement of account of term loan Statement of account of key loan Returned registered postal covers addressed to the defendants. Postal acknowledgements Reply notice issued by 3rd defendant to the notice dated 20-7-1972 under Ex.A-30 by the plaintiff Bank Reply notice issued on behalf of 5th defendant to the notice Ex.A-30 Reply notice issued on behalf of the 6th defendant to the notice Ex.A-30 Reply notice issued on behalf of the 7th defendant in reply notice to the notice dated 16-8-1972 Reply notice issued on behalf of the 8th defendant to

the notice Ex.A-30 dated 20-7-1992 Reply notice issued on behalf of the 9th defendant in reply to Ex.A-30. Likewise, the particulars of Exs.B-1 to B-32 are as hereunder: Ex.B-1/5-9-1969 Articles of agreement to 1st Company Ex.B-2/1-4-1971 Letter addressed to M/s. Appana Satyanarayana Rajarao & Company by the 2nd defendant Ex.B-3/20-1-1972 Letter addressed by 2nd defendant to M/s. Appana Satyanarayana & Company Ex.B-4/2-3-1971 Cheque for Rs. 20,000/- drawn in the name of Appana Satyanarayanamurthy & Co. by 2nd defendant Ex.B-5 Reference from the Andhra Bank, Dwarapudi stating that the cheque Ex.B-4 was referred to the drawer Ex.B-6 Returned registered cover Ex.B-7 Returned registered cover Ex.B-8 Share certificate in the name of 4th defendant Ex.B-9 Assessment proceedings of the C.T.O. Kakinada in respect of 1st defendant Company. Ex.B-10 Assessment proceedings of the Commercial Tax Officer, Kakinada of 1st defendant Company Ex.B-11 Letter addressed to the Commercial Tax Officer, Kakinada by 4th defendant Ex.B-12 Postal acknowledgement Ex.B-13 Assessment order of the Commercial Tax Officer, Kakinada in respect of the 1st defendant Company. Ex.B-14 Show cause notice of the 2nd assessment for the year 1970-71 issued to the 1st defendant Company by the Commercial Tax Officer, Kakinada Ex.B-15 Letter addressed to the Commercial Tax Officer by 4th defendant Ex.B-16 Letter addressed to the Commercial Tax Officer, Kakinada for further extension of time to 4th defendant Ex.B-17 Form D-3 under A.P. General Sales Tax Act Ex.B-18 Postal acknowledgement of 4th defendant Ex.B-19 Diary in the hand-writing of 6th defendant Ex.B-20 Admitted signature of 4th defendant taken in the public Court Ex.B-21 Admitted signature of 4th defendant taken in the public Court Ex.B-22 Photo of the signature Ex.B-23 Opinion given by Sri Y. Sidhareddi, handwriting expert Ex.B-24 Admitted signature of 5th defendant taken in the public Court ExB-25 Admitted signatures of 5th defendant taken in the public Court Ex.B-26 Photo of signatures Ex.B-27 Admitted signatures of 6th defendant taken in the public Court Ex.B-28 Admitted signatures of 6th defendant taken in public Court Ex.B-29 Photo of signature Ex.B-30 Admitted signatures of 7th defendant taken in the public Court Ex.B-31 Admitted signatures of 7th defendant taken in the public Court Ex.B-32 Photo of signature Ex.A-94 In the evidence of P.W.1 he deposed that the 1st defendant Company was sanctioned with certain limits initially by the Manager, Kakinada Branch. P.W.1 worked at Kakinada during 1968-71 and the 1st defendant Company was to start oil mill business and therefore two term loans were granted, one for construction of factory shed and another loan for purchase of machinery for Rs. 30,000/- the evidence of P.W.1 also makes it clear that defendants 2 to 4 were the Directors of the Company and defendants 5 to 7 stood as guarantors for the facilities provided by the plaintiff. Subsequent thereto the amounts were transferred to the Branch at Rajahmundry. The Directors executed promissory note for Rs. 30,000/-, Ex.A-1 and yet another promissory note for Rs. 30,000/-marked as Ex.A-2. Defendants 5 to 7 executed Ex.A-3 guarantee letter for Rs. 60.000/- on 13-4-1970. It is pertinent to note that there is no serious controversy relating to this document even by the appellant/7th defendant. This witness also specifically deposed that defendants 2 to 4 and all the guarantors defendants 5 to 7 approached the plaintiff Bank for these facilities and also executed all the relevant documents in his presence. This witness deposed about Exs.A-7 to A-23 and he was cross-examined. In cross-examination this witness deposed that there is no separate letter in token of acceptance. The three guarantors signed in his presence and he had denied the suggestion that none of the guarantors had not signed in his presence. This suggestion put to this witness P.W.1 is contrary to the stand taken by the 7th defendant now fairly admitting the initial guarantee agreement.

12. P.W.2 is yet another witness who deposed that he is the Branch Manager of Central Bank of India, Mylavaram and he worked at Rajahmundry as Clerk from 1957 to 1973 and the 1st defendant had account in the branch at Rajahmundry and he was in-charge of filling of documents and they filled up documents in the office in the presence of parties and they are having facilities of discounting and there was an agreement for bills discounting and he filled up the blanks in Ex. A-24 and in his presence the parties signed in Ex.A-24 and there are two sets of parties, one falling under Directors and other under guarantors and all of them signed before him and he put in the date 25-8-1970 in the letter of application Ex.A25 which gives the break up facilities the Bank sanctioned and they were signed before him. The Directors and guarantors signed in his presence in Ex.A-25. This witness also deposed that there is an open loan facility at Rajahmundry and he filled up Ex.A-26, the letter of hypothecation creating charge of the stock and it was signed before him by the Directors and put up the seal of the Company and the seal was affixed in the presence of three Directors who signed it. The schedule therein also was filled up by him. Ex.A-27 is the registration of the charge. He also filled up Ex.A-28, the letter of hypothecation forms on 26-3-1971. The schedule of the documents charged contains machinery. He deposed that he wrote the schedule and the Managing Director signed it. It was also registered before the Registrar of Companies and the certain of registration is Ex.A-29. This witness was crossexamined and certain suggestions put to him were denied. It was specifically put to him that the signatures of defendants 6 and 7 are forged in Ex.A-25, but P.W.2 had specifically denied the said suggestion. 13. P.W.3 is yet another witness, Branch Manager, Central Bank of India, Warangal Branch who was the Manager of the Bank from June 1971 to April 1976. This witness deposed about the copies of notice Ex.A-30 and he has got Power of Attorney to file the suit i.e., Ex.A-31 and he signed the plaint on behalf of the Bank. This witness deposed about Exs.A32 to A-35. P.W.4, Venkata Rao was examined who had supported the version of the Bank. 14. P.W.5 is the Industrial Finance Officer looking after small industries and he deposed about the advances given to the 1st defendant which falls under small industries. He deposed about the giving of additional security. He called on mother and brother of the 2nd defendant who gave additional security. They executed hypothecation bond Ex.A-38. Ex. A37 is the guarantee letter. He executed the letter of hypothecation Ex.A-28. He gave security for deficiency in the deed. He passed a letter Ex.A-40 and deposited documents Ex.A-39. This witness also deposed that they told him that it is a serious matter and even before they got advice from the Head Office, the 2nd defendant transferred and broke open the lock etc. This witness was cross-examined. 15. Apart from the evidence of P.W.1 and P.W.2, the evidence of P.W.6 also is important since P.W.6 deposed several details about the present transactions. P.W.6 deposed about the transfer of accounts from Kakinada to Rajahmundry and he also deposed about agreement the agreement of discounting facility as per Ex.A-24. The total loans sanctioned to the 1st defendant is to a tune of Rs. 3,45,000/- in addition to the bill discounting facility. The A.D.P. note for Rs. 3,45,000/-was also executed by the 1st defendant in favour of the Bank. Ex.A-41 is the pronote executed by defendants 2 to 4 who were Directors of the 1st defendant Company. Ex.A-25 is the loan application signed by defendants 2 to 4 and defendants 5 to 7. He also deposed that at the time of execution of all the documents when fresh limit was sanctioned he was present and the Directors executed a letter of continuity. Ex. A-42 is the letter of continuity dated 25-8-1970. Ex.A-43 is the letter accompanying the DP. note showing the break up of the loan limits executed by all the Directors, defendants 2 to 4. They also executed a letter of waiver dispensed with the presentation of the DP. note. Ex.A-44 is the letter of waiver. At the time of execution of DP. note defendants 2 to 4 also executed a letter not to create charge as per Ex.A-45. This witness also deposed about Ex.A-46, A-48, A-51, A-52, A-53, A-55 and also Ex.A-56. the details of these documents already had been referred to supra. Ex.A-57 is the loan application for break up figures executed by defendants 2 to 4 and defendants 5 to 7. Defendants 5 to 7 executed a guarantee agreement in favour of the Bank as per Ex.A-58. Thus it is pertinent to note that P.W.6 specifically deposed about Ex.A-57, the loan application and also Ex.A-58. This witness also deposed about Ex.A-27, A-37, A-38, A-39, A-40 and also Ex.A-59, A-60, A-61, A-62, A-63 and all other details relating to the transactions. It is recorded that the crossexamination for defendants 5,7,8 and 11 as Nil and there are cross-examination on behalf of defendants 6 and 8. Subsequent thereto it was recorded that cross-examination for 7th defendant is adopted as above. This witness, P.W.6, no doubt deposed that he knows the 2nd defendant personally since his childhood and they studied in the same school. The 2nd defendant is one of the Directors and he was working as a School Teacher as per his information. Ex.A-41 was executed in Rajahmundry Branch and he was present when Ex.A41 was executed. Ex.A-41 does not contain his hand-writing. Ex.A-42 to A-63 also do not contain his hand-writing. Unless he verifies the record, he cannot say the names of other customers who treated similar documents at Rajahmundry branch. On behalf of the 6th defendant also, this witness was cross-examined and suggestions put to him had been denied.

16. The Manager, Central Bank of India, Mandapeta was examined as P.W.7 who deposed about the facility of discounting of bills given by the Bank to the 1st defendant Company. He also deposed about Exs.A-64 to A-74. This witness was cross-examined but nothing serious had been elicited. 17. P.W.8 is yet another Branch Manager of the Bank at Rajahmundry from 26-5-1990. This witness deposed about the verification of the open loan account and the other account afresh and preparation of copies of the account with due verification. This witness deposed about Exs.A-76, A-77, A-78, A-79, A-80. The cross-examination of this witness on behalf of the defendants had been recorded as Nil. 18. The 3rd defendant in the suit was examined as D.W.1 who no doubt deposed that in the year 1969 or 1970 the 2nd defendant informed him that he removed Mutyala Sriharirao from the Directorship and appointed D.W.1 as a Director in his place. The 2nd defendant is the Managing Director of the firm and the 2nd defendant is in charge of the affairs of the 1st defendant Company. This witness no doubt substantially had taken the same stand as other defendants had taken. This witness in cross-examination admitted that all the documents which were filed by the plaintiff into Court purported to be signed were signed by him and he had admitted the signatures shown to him also. This witness was cross-examined at length. It is needless to say that this defendant had not preferred any Appeal. 19. The 7th defendant in the suit, the present appellant, had examined himself as D.W.2 who had deposed that his father used to deal in coconut and his father is a partner in Appanna Satyanarayana Murthy and Raja Rao and Co. and he used to assist his father in his business and his father died in 1974. D.W.2 also deposed that the 2nd defendant used to visit their firm and the 2nd defendant informed him that he started a mill in Vemulapalli and that they were to supply coconut to his mill and he said that the Company is on large scale and they have to supply the coconut on large scale and they have to take purchasing agency. The 2nd defendant assured to give Rs. 2.75 ps. per bag of 50 Kgs. of coconut and they have to purchase the coconut on behalf of the Company and supply the same to the Company. They also made a deposit of Rs. 10,000/- with the 2nd defendant. The agreement also was prepared on a stamp paper and the draft copy was supplied to them. Ex.B-1 is the draft copy of the agreement, but the 2nd defendant did not give them any order appointing them as commission agents but he used to visit their firm on his car and purchase coconut bags on credit basis. The 2nd defendant also is indebted to their firm to a tune of Rs. 31,976.33 ps.... He also addressed two letters to their firm as per Ex.B-2 and Ex.B-3 and he also gave a cheque dated 2-3-1971 as per Ex.B-4 for Rs. 20,000/-. The cheque was dishonoured as per the Bank endorsement as per Ex.B-5. They also got issued a notice to defendants 1 and 2 as per Exs.B-6 and B-7, the returned covers. The amount was not realized. This witness also deposed that at the instance of the 2nd defendant, his father purchased shares worth about Rs. 6000/- in his name. Ex.B-8 is the shares certificate. He got acquaintance with the 2nd defendant due to the business dealings and when he happened to visit Dwarapudi the 2nd defendant obtained his signatures on blank typed papers and printed papers. He also said that he obtained signatures likewise from two or three persons and out of confidence he blindly signed the blank papers. He does not remember whether the other persons already signed besides him. He further deposed that by the time he signed the blank papers there were no other signatures and before taking his signatures on blank papers, the 2nd defendant informed him that he is applying for loans. The 2nd defendant always assured him that he need not worry about it and that he never visited the Bank. He never informed that for what particular purpose the 2nd defendant was obtaining his signatures on those particular papers. The 2nd defendant informed him that the Directors in the firm are multi-millionaires and he need not worry and that the Directors primarily are responsible for Company affairs. This witness denied the signatures shown to him in Exs.A-24, A-25 and A-58. The 2nd defendant told him that all of them collectively would be liable to repayment. The 2nd defendant said that he would make this witness a Director of the Company. He also received sales tax assessment notice and order as per Ex.B-9 and Ex.B-10 in which he was described as a Director. Ex.B-11 is the office copy of the letter. Ex.B-12 is the postal ackonwledgement. This witness was cross-examined by the plaintiff and no doubt several suggestions were denied by this witness put to him in the cross-examination. This witness admitted that the signatures on Ex.A-57 and Ex.A-3 guarantee letter for advances and loans are his signatures and the other signatures might have been present by the time he signed on Exs.A-57 and Ex.A-3. He also further deposed that nobody objected him to read the contents of the documents before signing them. This witness also deposed that the signatures in Ex.A-58 belong to him and the signatures in Exs.A-24 and A-25 do not belong to him. This witness also denied other suggestions put to him. 20. D.W.3 is the Assistant Commercial Tax Officer at Kakinada who deposed as per the records relating to the assessments of the 1st defendant. D.W.4 is a resident of Ramachandrapuram and he deposed that he knows defendants 6 and 15 and the 15th defendant is the mother of his son-in-law and the 15th defendant gave the diary relating to the 6th defendant to be filed into Court for the year 1970 and he knows the hand-writing of

the 6th defendant. Ex.B-19 is the diary in the hand-writing of the 6th defendant. This witness was cross-examined. It is needless to say that the 6th defendant had not preferred any Appeal. 21. D.W.5 is the Assistant Director, Forensic Science Laboratory, Hyderabad. Strong reliance was placed on the evidence of this witness on the ground that the expert expressed some opinion relating to the signatures. This witness deposed that on 24-10-1978 he received requisition from Sub-Court, Rajahmundry enclosing certain documents containing the specimen and disputed signatures. The disputed signatures were marked by him as Q-1 to Q-3 and the specimen signatures were marked as S-1 to S-24. This witness deposed about the signatures relating to the other defendants also in detail and his comparative study in relation thereto. This witness opined that the person who wrote the signatures marked as S-7 to S-12 in Exs.B-24 and B-25 did not write the disputed signatures contained in Exs. A-3, A-57 and A-58 marked by him as Q-3 to Q-7 as per Ex.B-23. This witness also deposed about the subsequent signatures of the 6th defendant. This witness while deposing about the subsequent signatures of the 7th defendant had stated that the subsequent signatures of the 7th defendant were marked by him as S-9 to S-24 as per Exs.B-30 and B31. The corresponding admitted signatures of the 7th defendant were marked by him as Q10 and Q-13 contained in Exs.A-24, A-25 and A-58 and he thoroughly compared the disputed signatures with the specimen signatures of the 7th defendant and he is of the opinion that the person who wrote the subsequent signatures marked by him as S-9 to S-24 in Exs.B-30 and B-31 did not write Q-10 to A-13 contained in Exs.A-24, A-25 and A-58. Ex.B-23 is his opinion. This witness also deposed about the reasons how he had given Ex.B23. This witness was cross-examined at length. 22. D.W.6 is the son of the 5th defendant and he had deposed about certain details. It is needless to say that these parties, the legal representatives of the 5th defendant who is no more, had not preferred any Appeal. Strong reliance was placed by the Counsel for the appellant on the evidence of D.W.5, expert evidence, and the opinion given by him on comparison of signatures and would contend that the 7th defendant had not executed Ex.A58 at all. Reliance also was placed on the decisions Shashi Kumar Banerjee v. Subodh Kumar Banerjee, MANU/SC/0278/1963 : AIR1964SC529 and Bhagwan Kaur v. Maharaj Krishna Sharma, MANU/SC/0252/1972 : 1973CriLJ1143 . 23. It is no doubt true that the expert examined as D.W.5 had given the opinion Ex.B-23 and certain reasons also had been given by him. It is needles to say that it is only opinion evidence. It is pertinent to note that the stand taken by the 7th defendant in the written statement and also while deposing as D.W.2 is that his signatures had been obtained on blank papers by the 2nd defendant on assurance for applying loans. When such papers are available it would be too remote to infer that the 2nd defendant would have fabricated or forged signatures in collusion with the Bank or the Bank would have resorted to forge the signatures. Hence on the strength of such opinion evidence, the expert evidence of D.W.5, when clear evidence of P.W.1, P.W.2 and P.W.6 is available on record in general and P.W.6 in particular and especially in the light of the admissions made by, the 7th defendant as D. W.2, the opinion of the expert D.W.5 cannot be given much weight as against the direct evidence available and hence the trial Court had arrived at the correct conclusion in this regard. 24. Submissions at length were made relating to the aspect that the execution of the document is something different from mere admission of the signatures. Strong reliance was placed in this regard on Pirbhu Dayal v. Tula Ram, AIR 1922 All. 401wherein the Division Bench of Allahabad High Court held that where the plaintiff sued relying on a document which the defendant affirmed to be only a blank piece of paper to which he was asked to affix his signature and thumb impression, the burden of proof of its execution lay on the plaintiff. In Birbal Singh v. Harphool Khan, MANU/UP/0007/1976 : AIR1976All23 while dealing with execution of document and meaning thereof it was held: "The point has been argued at great length from both sides. I have given my anxious consideration to the whole matter and have no hesitation to say that in a case based on pronote the initial burden lies on the plaintiff to prove execution of the pronote and when the burden is discharged it is then that the court shall raise a presumption in favour of the plaintiff for holding that the pronote was for consideration and it will be for the defendants to rebut that presumption. The same principle was laid down in the case of Kundan Lal Ralla Ram v. Custodian Evacuee Property, Bombay (AIR 1961 SC 1316). Before proceeding further it may be considered as to what the word "execution" signifies. In Shaikh Edadut Ali v. Muhammad Fareed, (35 Ind. Cas. 56 = AIR 1916 pat. 206) it was held that the word "execution" consists in signing a document written out, read over and understood and does not consist of merely signing a blank paper. The same view was taken in the cases of Mirza Gorgani v. Bhola Mal Nibalchand (AIR 1934 Lah. 293(2) and Pirbhu Dayal v. Tula Ram (AIR 1922 All. 401 (2). Therefore, the first question which arises for consideration is whether the execution of the pronote was proved by the plaintiff or admitted by the defendants. The plaintiff examined himself and one Pheru, the marginal witness of the pronote. Both of them

contradicted each other on material points to the extent that the learned first appellate Court was justified in rejecting their evidence. According to the plaintiff, the said advance was made by him in his Kothri which is north facing. He immediately resiled from this statement and gave out that the money was advanced at the house of Mithan Lal, the scribe of the pronote and the receipt. According to him, Ratna and Pheru were present at that place and the pronote was scribed by Mithan Lal at his house. He had also stated that the necessary stamp and form for executing the pronote and the receipt were brought by Mithan Lal. Pheru on the other hand gave out that the advance was made at the house of the plaintiff and the pronote and the receipt were also executed at that place. According to him, these documents were scribed by one Pirthvi and not by Mithan Lal, as stated by the plaintiff. He also gave out that the stamp and the forms were brought by Harphool. Obviously these contradictions should not have been there if the pronote and the receipt were actually written out in the presence of the defendants and their thumb marks were obtained thereafter. It may further be stated that neither Mithan Lal, the alleged scribe of the documents nor Ratna was produced in this case. In this manner the learned first appellate Court was perfectly justified in holding that the plaintiff had failed to prove execution of the pronote and the receipt. The conclusion is based on sound reasonings. As held in the case of v. Ram Chandra Ayyar v. Rama Lingam Chettiar MANU/SC/0016/1962 : [1963]3SCR604 . Section 100(1)(c) Civil Procedure Code does not refer to error or defect in the appreciation of evidence adduced by parties on merits. Even if the appreciation of evidence made by the lower appellate Court is patently erroneous and the finding of fact recorded in consequence is grossly erroneous, that cannot be said to introduce a substantial error or defect and the High Court cannot interfere with the conclusions recorded by the lower appellate Court. In the instant case the conclusions cannot be characterized as erroneous or wrong and cannot be disturbed." The Apex Court while dealing with material alteration without consent of the party liable under it and the effect thereof in Loonkaran Sethia v. Ivan E. Johna, MANU/SC/0048/1976 : [1977]1SCR853 observed: "Question No. 5: Before proceeding to determine this question, it would be well to advert to the legal position bearing on the matter. As aptly stated in paragraph 1378 of Volume 12 of Halsbury's Laws of England (fourth edition) "If an alternation (by erasure, interlineations or otherwise) is made in a material party of a deed, after its execution, by or with the consent of any party to or person entitled under it, but without the consent of the party or parties liable under it, the deed is rendered void from the time of the alteration so as to prevent the person who has made or authorized the alteration, and those claiming under him, from putting the deed in suit to enforce against any party bound by it, who did not consent to the alteration, any obligation, covenant or promise thereby undertaken or made. A material alteration according to this authoritative work, is one which varies the rights, liabilities, or legal position of the parties as ascertained by the deed in its original state, or otherwise varies the legal effect of the instrument as originally expressed, or reduces to certainty some provision which was originally unascertained and as such void, or which may otherwise prejudice the party bound by the deed as originally executed. The effect of making such an alteration without the consent of the party bound is exactly the same as that of cancelling the deed ... As the above mentioned alternations substantially vary the rights and liabilities as also the legal position of the parties, they cannot be held to be anything but material alternations and since they have been made without the consent of the defendants first set, they have the effect of cancelling the deed. Question No. 5 is therefore, answered in the affirmative." Relating to the execution of the documents, the evidence of P.W.1, P.W.2 and P.W.6 is clearly available on record and apart from this aspect the admission relating to the signatures by D.W.2 also would assume lot of importance. The 7th defendant pleaded in paras-11 and 12 of the written statement as hereunder: "As stated supra this defendant affixed his signatures to the letter of guarantee dated 13-41970 and on letter of application 31-10-1970 on the assurance that defendants 2 to 4 as also defendants 5 and 6 will be joining the execution of those documents and that defendants 2 to 4 would be the persons that will be primarily, principally and ultimately liable if at all. Since defendants 2 to 4 have not joined the execution of the said documents in their individual capacity and that the signatures purporting to be that of defendant No. 5 is not his signature on the letter of guarantee dated 13-4-1970, this defendant is not liable either under the letter of guarantee dated 13-4-1970 on which this defendant affixed his signatures and other documents on which the signatures purporting to be those of this defendant are not his. This defendant also learns that the signatures of purporting to be those of defendants 4 and 5 on letter of application dated 31-10-1970 are not theirs and so

this defendant also cannot be liable. This defendant is not aware of the various resolutions of the Board of Directors of the 1st defendant. For a guarantee to be valid, it must be tripartite i.e., the creditor, the debtor and the guarantor must be parties to the same. Here none of the concerned documents were tripartite document. The plaintiff Bank is not an executant of any of them. The 1st defendant Company also did not sign. Hence this defendant submits that the letter of guarantee cannot be enforced against this defendant." 25. It is pertinent to note that the stand taken by the 7th defendant is the theory of obtaining signatures on blank papers and utilizing such blank papers by the 2nd defendant. However, a deviated stand is being taken denying the very signatures and denying the very execution taking advantage of the opinion of the expert D.W.5. In the light of the direct evidence available on record this stand taken by the appellant/7th defendant cannot be accepted. 26. Further, submissions at length were made relating to the Bank's negligence and the discharge of the surety or the guarantor. The plaintiff Bank no doubt pleaded at para-11 as hereunder: "While so it came to the notice of the officers of the plaintiff Bank in February 1971 that defendants 2 and 3 and their henchmen tampered with the goods in the key godown and furtively removed the goods in both open loan and key loan godowns. The inspection by the officers of the Bank revealed that the reports and stock statements given on behalf of the 1st defendant were false, misleading and that there were severe shortages both in the open loan goods and the key godown goods and that goods of different description from that of those mentioned in the lodgment and of value far less than declared were kept in the key godowns and that the Directors and their henchmen were responsible for the mess. The plaintiff Bank demanded payment of all amounts due and sealed the premises of the factory on 1-3-1971 by locking the outer door of the building housing machinery by virtue of the provisions in the letter of hypothecation empowering plaintiff to take possession at his option. Confronted with such a situation and for some time avoiding being present in the factory premises even after receipt of the telegraphic notice, the 2nd and 3rd defendants having been detected by the external auditors in the inspection and inventory made by them in the presence of the 2nd defendant on 10th and 11th March 1971 while admitting by letter dated 16-3-1971 that shortages and irregularities occurred in the stocks and owning the liability to make good for the loss without reference to the reasons for the said shortages, offered additional securities by making 8th defendant and late A.B.T. Sundaram, his mother stand guarantee for payment of maximum principal sums of Rs. 60,000/- and Rs. 1,25,000/- respectively as per letters of guarantee dated 25-3-1971 and 26-3-1971 respectively executed by them. Defendants 2 and 3 passed a letter to the plaintiff requesting time for payment and release of factory for working the same. A letter of hypothecation creating charge over the machinery to secure an amount of Rs. 60,500/- was also executed by 1st defendant on 26-3-1971 which charge was also registered on 6-5-1971 with the Registrar of Companies. The 2nd defendant also deposited his title deed dated 189-1969 pertaining to his individual immovable property with the plaintiff on 26-3-1971 at Rajahmundry as further security for all the amounts due. As the plaintiff did not agree to release the factory for fear of losing its security, the 2nd defendant confirming the misgivings of the plaintiff, actually trespassed into the factory breaking open the seals of the plaintiff Bank and committed theft of contents therein on 1-4-1971 and again on 27-91971 for which criminal cases are now pending." It is true that a memo also was filed by the plaintiff in the suit which reads as hereunder: Memo filed by the plaintiff "Plaintiff begs to state that there are no stocks in either key godowns or the open loan premises." In the written statement filed by the 7th defendant at para-13, specific stand was taken that the plaintiff has been grossly negligent and further pleaded as hereunder: "...The plaintiff and the plaintiff Bank is bound to check the open loan and key loan stocks periodically and also has to keep watch over the open loan account till they are in tact put in the godowns. They have to keep track of the honouring or dishonouring the documentary demand bills and take immediate and necessary action. They have also to get insured all the insurable goods and the company's movable and immoveable properties. They obviously failed awfully in discharging their duties and they are grossly negligent. But for their gross negligence the shortage and irregularities referred to in para (11) of the plaint would not have occurred. Even after the discovery that the goods in key godown were tampered with

as alleged by the plaintiff Bank and those in open loan and key loan godowns were removed, the plaintiff Bank did not take any immediate action. It should have taken immediate precautions to safeguard Company's premises, machines and other property by employing additional watchmen and should have also alerted defendants 5 to 7 to enable them to safeguard their interest and mitigated their alleged liability as far as possible. The goods are of a perishable nature and steps should have been taken immediately to sell the available stock by exercising the right of sale. This would have mitigated the alleged liability of defendants 5 to 7. Nothing is known about the fate of those goods till now. The plaintiff Bank is guilty of gross negligence and on that account this defendant discharged of his liability, even if any. In any view not taking immediate action against the 1st defendant amounts to gross negligence and on that account also this defendant stands discharged of the alleged liability. The plaintiff Bank gave time by extending to the 2nd defendant some respite in return for the security of his mother and brother. In the said circumstances the plaintiff Bank must be deemed to have waived its claims on defendants 5 to 7." As D.W.2, the 7th defendant had taken the stand that there was negligence on the part of the Bank and hence automatically his liability as guarantor would come to an end. On the aspect of deed of guarantee and the variance operating as discharge, strong reliance was placed on S. Perumal Reddiar v. Bank of Baroda wherein it was observed at paras 44 and 46 as hereunder: "The surety, it is often said, is afavoured debtor. An unauthorized material alteration by the promisee whether that is by adding anything to or by striking out any of a written contract, avoids the contract against the person otherwise liable upon it. In a printed form of guarantee, if the signature of the guarantor is obtained prior to the filling up of the blanks relating to material particulars of the contract, the said filling up of the blank spaces in the printed form of guarantee amounts to material alteration especially when the said deed relating to the contract of guarantee is in the possession of the promisee or his agent, and discharges the contract of guarantee. In the instant case, the alterations have been made by the agent of the Mangadu Branch of the plaintiff bank while the document was in its custody and so, the said alteration amounts to material alteration and the appellant, who is the promisor, is thereby discharged. In a document of guarantee, if the blank spaces relating to the amount for which the person stands as a guarantor, the date of the instrument, the amount for which the person stands as a surety and the rate of interest for which the amount had been advanced, are filled up, such filling up would amount to substantial alteration, which are to the detriment of the surety and the said material alteration discharged the surety from liability. The said alterations are certainly to the disadvantage of the surety. They cannot be held as alterations of unsubstantial nature and that the surety cannot claim to be discharged. The conduct of P.W.2 in this case in bringing the deed of guarantee from the bank to his house and asking the appellant to put his signature in it is certainly an act which is not in accordance with the normal procedure. Equally, the act of P.W.1 in filling up the blank spaces in Ex.A-3, without the knowledge of the appellant long after the signature of the appellant was obtained in it is really very strange. ... The true rule, in my opinion, applicable by the contract of guarantee is that if there is any agreement between the principals with reference to the contract guaranteed, the surety ought to be consulted. If the alteration is to the disadvantage of the surety, or its unsubstantial nature is not self-evident, the surety can claim to be discharged. The contract of the surety should not be altered without his consent and the creditor should not undertake to alter the contract and they say, that though the contract had been altered, it was not done to the disadvantage of the surety, especially when such alterations were made with respect to material particulars regarding the contract of guarantee affecting the surety." Reliance also was placed on State Bank of Saurashtra v. Chitranjan Rangnath and the Apex Court at paras 10 and 16 held: "If the two promissory notes Exts.81 and 30 coupled with the letter of guarantee Ext.31 executed by the surety and the bound Ext.83 executed by the principal debtor at one sitting on September 16, 1957, evidence one composite transaction, it is an inescapable conclusion that the principal debtor offered two securites one the pledge of goods and the other the personal guarantee of the surety. The surety in good faith contracted to offer personal guarantee on the clear understanding that the principal debtor has offered security by way of pledge of goods and the goods were to be in the custody of the creditor Bank. On this conclusion Section 139 of the Act will be indubitably attracted. Section 141 comprehends a situation where the debtor has offered more than one security, one of which is the personal guarantee of the surety. Even if the surety of personal guarantee is not aware of any other security offered by the principal debtor yet once the right of the surety against the principal debtor is impaired by any action or inaction, which implies negligence appearing from lack

of supervision undertaken in the contract, the surety would be discharged under the combined operation of Sections 139 and 141 of the Act. In any event, if the creditor loses or without the consent of the surety parts with the security, the surety is discharged to the extent of the security lost as provided by Section 141." Further strong reliance was placed on the decision of a Division Bench of this Court in State Bank of India v. Praveen Tanneries wherein it was held at paras 9,11,12,14 and 24 as hereunder: "Under the first scheme viz., cash credit (Mandi type) monies were advanced to the 1st defendant on pledge of the stock kept in the godowns indicated by the Bank the 1st defendant holding with him the lock and key of the same. The Bank maintains stock register for the same. The limits of advance allowed by the bank are at 30% on raw material, 40% on wool and 50% on the value of 8. MANU/AP/0292/1992 : 1992(3)ALT353 (D.B.). the stock in the process thus at an average of 40%. The 1st defendant has to submit periodical statements of stock maintained under this scheme. The evidence of P.W.1 and Ex.A-6 the statement of account concerned show that the plaintiff stopped lending amounts to the 1st defendant after 18-9-1960. It is also admitted by P.W.1 that D-1 stopped manufacturing goods by December 1969. Ex.B-1 is the stock statement showing the value of the goods on 16-1-1970 at Rs. 60,735/-. Ex.B-2 is another statement of stock as on 29-5-1970 at Rs. 60,788-13 paise. The plaintiff has not produced any register or stock statements submitted by the 1st defendant from time to time nor the register maintained by the Bank in regard to the goods pledged nor the Drawing Power Ledger though the 2nd defendant called upon it to produce the same in his written statement as well as in his notice Ex.B-9 in 1970 the amount due to the Bank under this scheme is about Rs. 61,000/- apart from Rs. 10,000/and odd towards interest. From out of this amount Rs. 39,974-24 was already excluded as noted supra on the ground that the same was arrears outstanding and brought forward after execution of the agreements and guarantee bonds. The balance therefore remains is only about Rs. 21,000/-. The plea of the 2nd defendant is that had the plaintiff sold the pledged goods in time the plaintiff could have realized the balance amount. The plaintiff sold the goods only after filing the suit in 1972. The goods by their nature decayed and therefore the total goods of the value of Rs. 2,60,000/- had only fetched an amount of Rs. 10,000/- in auction. That apart as contended for the 2nd defendant the plaintiff also violated the terms and conditions in the agreement. The bank did not issue notice to the 2nd defendant bringing forth all these facts to his notice except informing him of this only after the suit is filed. Thus the plaintiff has impaired the rights of the 2nd defendant who is a surety and has the right to enter into the shoes of the creditor to realize the amount from the debtor after paying the amount to the creditor. Thus the plaintiff has violated the terms of the agreement and advanced amounts equal to the value of the pledged goods and also did not take steps at the proper time to realize the amounts by putting the goods to sale more so when the plaintiff came to know that the 1st defendant stopped business in December 1969 and allowed the goods to decay and perish. This is also admitted by P.W.1 in his evidence. ... Under the 5th scheme, the plaintiff is claiming an amount of Rs. 1,15,000/-and odd as per Ex.A-31 statement of account. As per the evidence of P.W.1 under this scheme the stocks are pledged to the bank and the plaintiff advanced money upto 18% of the firm orders for contract. Irrevocable letters of credit would be given by the foreign buyers in favour of the 1st defendant and deposited with the bank. The stocks of the 1st defendant were also deposited with the bank. The bank maintained an account of stocks pledged and the stock so pledged was also subject to periodical inspection by the officers of the bank. The 1st defendant was to submit the periodical statements of his stock and the bank staff would verify the valuation given. Here also the advances are at 40% on an average of the value of the goods pledged. The bank advanced money to the 1st defendant under this head between 7-6-68 and 24-7-68. On 24-7-68 the bank advanced a sum of Rs. 50,000/-. In all the bank has advanced a sum of Rs. 99,500/- under this scheme to the 1st defendant. The case of the 2nd defendant is that under this scheme the 1st defendant. The case of the 2nd defendant is that under this scheme the 1st defendant pledged goods of the value of 1,68,200/- and the plaintiff allowed the stock to deteriorate and perish without putting the same to sale and adjusting with the proceeds thereof the amount that was due from the 1st defendant. In view of this the contention advanced on behalf of the 2nd defendant is that the rights of the 2nd defendant guarantor are impaired as against the security available with the plaintiff bank. P.W.1 admitted that Exs.B-3 and B-4 stock statements sent between 261-70 and 29-5-70 show the value of the stock under pledge in this respect at Rs. 1,00,920/. The bank did not sell the stock till 25-11-72 though the 1st defendant did not pay the amount due from him. As per the evidence of P.W.1 the bank came to know that the 1st defendant stopped the business in December 1969. Still the bank did not take any steps to sell the stocks pledged. It was only after filing of the suit and after the 1st defendant pleaded that the plaintiff failed to bring the stocks to sale the auction was conducted and in that goods put at the value of Rs. 2,60,000/-had fetched an amount of Rs. 10,000/-and odd. Apart from this the plaintiff did not file the record to show the actual quantity of stocks

available on 25-11 -72 the date of auction the rate at which the goods were sold or the list of goods sold. Further there were certain deletions for which there was no explanation forthcoming. It is also in the evidence of P.W.1 that the bank gave a notice Ex.A-32 dated 8-5-70 to the 1st defendant pointing out certain irregularities in the accounts. P.W.1 was put present at the time of sale of the goods. He could not say whether the articles were taken from the godown and sold or any articles were left out in the go-down. He could not also say whether the goods were in a highly decomposed state at the time of sale though he denied the situation that the bank was careless in not realizing the amounts from pledged goods in proper time and allowing the security to be impaired by deterioration and pilferage etc. The plaintiff further failed to show the goods that were sold in the auction except filing the bid list which simply shows that a particular variety of skin was sold at such and such a rate per K.G. Though the plaintiff is bound to account for the goods under pledge, it failed to do the same. Thus due to the conduct of the plaintiff the goods under pledge were perished and decayed and became worthless. It is amazing to note that goods valued at Rs. 2,60,000/- and were under pledge with the bank fetched an amount of Rs. 10,0007- when put to auction. This conduct of the plaintiff therefore as found by the Court below has impaired the right of the surety-2nd defendant, who is entitled to enter into the shoes of the creditor to realize the amount from the debtor after paying back the amount due from the debtor. ... Under the 3rd scheme, Outward Bill Overdraft the plaintiff agreed to advance a maximum amount of Rs. 25,000/-. Ex.A-14 is the agreement executed by D-1, Ex.A-15 is the transferred pronote while Ex.A-16 is the guarantee-bond executed by D-2 in this behalf. An amount of Rs. 22,233-13 paise is claimed by the plaintiff on this account. Ex.A-19 is the statement of account in relation to this scheme. It is in the evidence of P.W.1 that under this scheme D-1 sells goods to another, dispatches the goods either by railway or road-way and produces before the plaintiff bank. The plaintiff bank would negotiate the same with another bank and recover the money. As soon as the R.R. or lorry way bill is produced the bank advances 75 to 90% of the value of the goods. After recovering the full amount from the consignee bank the plaintiff bank would first adjust the advance made to the 1st defendant and then pay D-1 the balance amount. In these transactions, the goods under transit covered by the R.R. or lorry way bill would be the security to recover the money advanced. In case the consignee bank does not pay the amount and returns it for any reason the bank will demand the 1st defendant to pay back the amount advanced and it is only on such repayment the R.R. or the lorry way bill would be handed over to the 1st defendant. All this procedure is spoken to by P.W.1. The contention of the learned Counsel for the 2nd defendant is that contrary to the terms and conditions of the agreement, the plaintiff in cases where the consignee-bank returned the R.R. or the lorry way bill to the plaintiff bank, the plaintiff did not demand for repayment of the advance made to the 1st defendant and on the other hand gave back the R.R. or the lorry way bill soon after its return and thus it resulted in impairment of the security that would have been available to D-2 the surety. The last transaction in this loan is on 12-9-69. The debit entry made on that day is for Rs. 16,500/-. As against this transaction the contention of the 2nd defendant is that the plaintiff having received the R.R. returned by the consignee-bank did not demand D-1 for repayment of the advance made and on the other hand handed over the bill to D-1. the explanation of P.W.1 is that it was so handed over to enable D-1 to find out another purchaser. It is also admitted by P.W.1 that the bank was handing over returned R.R. or lorry way bill to D-1 without demanding repayment of the advance given. This is exactly contrary to Clause (xiv) of Ex.A-14. On account of this return of the R.R. or lorry way bill the amount advanced of Rs. 16,500/- remained unpaid. Had the plaintiff brought the goods covered by the R.R. to sale without returning the same to D-1 the amount would have been cleared of. On account of the negligence of the plaintiff bank in this behalf the amount could not be realized. In view of this irregular action and violation of terms and conditions of Ex.A14 the Court below has rightly excluded the amount of Rs. 6,500/- along with interest calculated thereon (viz., Rs. 233-13 paise) and granted decree only for the balance of Rs. 5,500/-. ... Thus the second defendant has amply proved that the bank acted irregularly and in violation of terms and conditions of the agreements entered into and advanced loans beyond the scope of the agreements and behind the back of the 2nd defendant-surety, resulting in impairment of the security against which the surety 2nd defendant could have proceeded by entering into the shoes of the creditor-plaintiff. The last decision of the Supreme Court that has bearing on the present facts in the matter of discharge of the surety from the liability is the one in State Bank of Saurashtra v. Chitranjan Ranganath MANU/SC/0006/1980 : [1980]3SCR915 . There 'A' bank has given Cash Credit facility to a businessman to the tune of Rs. 75,000/-as against two securities offered by him, namely (1) the pledge of goods to be kept under look and key under

supervision of the Bank and (2) personal guarantee of the surety. The pledge and the personal guarantee were not two independent transactions but they formed part and parcel of one composite transaction. The surety himself agreed to give personal guarantee on the specific understanding and with the full Knowledge of the Bank that the principal debtor was offering another security, namely, pledge of goods. The surety in good faith contracted to offer personal guarantee on the clear understanding that the principal debtor has offered security by way of pledge of goods and the goods were to be in the custody of the creditor bank. It was concurrently found that the bank was utterly negligent with regard to the safe keeping and handling of pledged goods and the security of pledged goods was lost on account of the negligence of the Bank. In those circumstances, the Supreme Court after referring to the decision in Wulff v. Jay (1872 (7) QB 756) wherein reliance was placed upon the decision in Rees v. Barrington (1 supra) as noted above, held: "Section 141 comprehends a situation where the debtor has offered more than one security one of which is the personal guarantee of the surety. Even if the surety of personal guarantee is not aware of any other security offered by the principal debtor yet once the right of the surety against the principal debtor is impaired by any action or inaction which implies negligence appearing from lack of supervision undertake in the contract, the surety would be discharged under the combined operation of Sections 139 and 141 of the Act. In any event of the creditor loses or without the consent of the surety parts with the security, the surety is discharged to the extent of the surety lost as provided by Section 141." Apart from these decisions the notes by the renowned author Frederick Thomas White and Owen Dacies Tudor in their Eighth Edition on 'Leading Cases in Equity' while referring to the decision in Rees v. Berrington (30 Eng. Reports 765) refers to the different situations wherein the surety stands discharged of his liability. They are (i) giving farther time to the principal debtor without notice to or consent of the surety, (ii) misrepresentation of the material fact or fraudulent concealment of the existing material fact from the surety by the creditor would invalidate the contract, (iii) where there is a departure from the terms of the contract, (iv) where the creditor without the assent of the surety gives time to the principal debtor, (v) where the creditor takes another surety or additional security in satisfaction of the first surety, the first surety will stand discharged. The following passage with reference to the discharge of the surety on the creditor's farthering the time to repay the debt without notice to the surety has a material bearing on the present facts. It runs: "This produces no inconvenience to any one; for it only amounts to this that there shall be no transaction with the principal debtor without acquainting the person who has a great interest in it. The surety only engages to make good the deficiency. It is the clearest and most evident equity not to carry on any transaction without the privity of him (the surety) who must necessarily have a concern in every transaction with the principal debtor you cannot keep him bound and transact his affairs (for they are as much his as your own) without consulting him. You must let him judge whether he will give that indulgence contrary to the nature of his engagement." (at page 575) Referring to the impairment of the security which also results in discharge of the surety, the learned authors at page 601 stated: "So a surety will be released if the creditor cannot on payment by his surety, give him the securities, in exactly the same condition as they formerly stood in his hands, and this may, of course extent even to discharging the surety entirely from his liability...." From the above decisions and provisions of law referred to, it is clear that not only the variance in the terms and conditions of the contract by the creditor without notice to or consent of the surety would discharge the surety of the liability, but it would equally discharge him if the creditor cannot on payment by his surety, give him the securities in the same condition as they formerly stood in his hands, thereby rendering impairment. This doctrine enunciated in Rees. v. Berrington (30 Eng. Reports 765) has been approved by the Supreme Court and thus continues to be good law even after two hundred years. The facts in the case on hand as held supra reveal that not only the creditor-bank had varied the terms of the contract but had also rendered the securities not available to the surety for being proceeded against as he is entitled to, after making the payment to the Bank and thereby caused the impairment." 27. There cannot be any quarrel or controversy relating to this proposition of law. On a careful scrutiny of the decisions referred to supra in this regard, the decisions are distinguishable on facts. As per the evidence of P.W.1, P.W.2 and P.W.6 and also the other witnesses who were examined on behalf of the plaintiff Bank they have been taking all the steps and it cannot be said that the Bank officials have been negligent in any way and merely because the Directors had resorted to certain unlawful criminal acts as can be seen from the records available, it cannot be said that it was due to the negligence on the part of the Bank officials and that cannot be taken advantage of by this guarantor so as to contend that the liability of the guarantor automatically would come to an end because of such

negligence. When the evidence is clear and categorical in this regard the decisions and the propositions of law which had been laid down by the Courts while deciding such matters in the factual backdrop cannot be made applicable in the present case. Hence, this Court is not inclined to accept the stand taken by the appellant/ 7th defendant that in view of the negligence on the part of the Bank, his liability as guarantor automatically came to an end. Suffice to state that the evidence adduced in this regard by the Bank is clear and categorical and no other opinion is possible in this regard. 28. Point No. 4: Submissions at length were made relating to the aspect of interest and reliance was placed on Radha Agencies and Ors. v. Vijaya Bank, Bhimavaram Branch, . 2002 (1) An.W.R. 117 = 2002 Supp. (2) ALD 857 . Sri Panduranga Traders v. State Bank of India, Vatluru Branch, MANU/AP/0305/2000 : 2000(3)ALD134 and Central Bank of India v. Ravindra, MANU/SC/0663/2001 : AIR2001SC3095 . This is a commercial transaction. It is no doubt true that the granting of interest may be discretionary but however reasons had been recorded by the trial Court. While granting 9% interest. In the decision referred (11) supra, it was observed at para-55 as hereunder: "During the course of hearing it was brought to our notice that in view of several Usury Laws and Debt Relief Laws in force in several States private money-lending has almost come to an end and needy borrowers by and large depend on banking institutions for financial facilities. Several unhealthy practices having slowly penetrated into prevalence were pointed out. Banking is an organised institution and most of the banks press into service long running documents wherein the borrowers fill in the blanks, at times without caring to read what has been provided therein, and bind themselves by the stipulations articulated by best of legal brains. Borrowers other than those belonging to corporate sector, find themselves having unwittingly fallen into a trap and rendered themselves liable and obliged to pay interest and quantum whereof may at the end prove to be ruinous. At times the interest charged and capitalised is manifold than the amount actually advanced. Rule of damdupat does not apply. Penal interest, service charges and other over-heads are debited in the account of the borrower and capitalised of which debits the borrower may not even the aware. If the practice of charging interest on quarterly rests is upheld and given a judicial recognition, unscrupulous banks may resort to charging interest even on monthly rests and capitalising the same Statements of Accounts supplied by banks to borrowers many a times do not contain particulars or details of debit entries and when written in hand are worse than medical prescriptions putting to test the eyes and wits of the borrowers. Instances of unscrupulous, unfair and unhealthy dealings can be multiplied though they cannot be generalised. Suffice it to observe that such issues shall have to be left open to be adjudicated upon in appropriate cases as and when actually arising for decision and we cannot venture into laying down law on such issues as do not arise for determination before us. However, we propose to place on record a few incidental observations, without which, we feel, our answer will not be complete and that we do as under: (1) Though interest can be capitalised on the analogy that the interest falling due on the accrued date and remaining unpaid, partakes the character of amount advanced on that date, yet penal interest, which is charged by way of penalty for nonpayment, cannot be capitalised. Further interest, i.e. interest on interest, whether simple, compound or penal, cannot be claimed on the amount of penal interest. Penal interest cannot be capitalised. It will be opposed to public policy. (2) Novation, that is, a debtor entering into a fresh agreement with creditor undertaking payment of previously borrowed principal amount coupled with interest by treating the sum total as principal, any contract express or implied and an express acknowledgment of accounts are best evidence of capitalisation. Acquiescence in the method of accounting adopted by the creditor and brought to the knowledge of the debtor may also enable interest being converted into principal. A mere failure to protest is not acquiescence. (3) The prevalence of banking practice legitimatises stipulations as to interest on periodical rests and their capitalisation being incorporated in contracts. Such stipulations incorporated in contracts voluntarily entered into and binding on the parties shall govern the substantive rights and obligations of the parties as to recovery and payment of interest. (4) Capitalisation method is founded on the principle that the borrower failed to make payment though he could have made and thereby rendered himself a defaulter. To hold an amount debited to the account of the borrower capitalised it should appear that the borrower had an opportunity of making the payment on the date of entry or within a reasonable time or period of grace from the date of debit entry or the amount falling due and thereby avoiding capitalisation. Any debit entry in the account of the borrower and claimed to have been capitalised so as to form an amalgam of the principal sum may be excluded on being shown to the satisfaction of the Court that such debit entry was not brought to the notice of the borrower and/or he did not have the opportunity of making payment before capitalisation and thereby excluding its capitalisation.

(5) The power conferred by Sections 21 and 35A of the Banking Regulation Act, 1935 is coupled with duty, to act. Reserve Bank of India is prime banking institution of the country entrusted with a supervisory role over banking and conferred with the authority of issuing binding directions, having statutory force, in the interest of public in general and preventing banking affairs from deterioration and prejudice as also to secure the proper management of any banking company generally. Reserve Bank of India is one of the watchdogs of finance and economy of the nation. It is, and it ought to be, aware of all relevant factors, including credit conditions as prevailing, which would invite its policy decisions. RBI has been issuing directions/circulars from time to time which, inter alia, deal with rate of interest which can be charged and the periods at the end of which rests can be struck down, interest calculated thereon and charged and capitalised. It should continue to issue such directives. Its circulars shall bind those who fall within the net of such directives. For such transaction which are not squarely governed by such circulars, the RBI directives may be treated as standards for the purpose of deciding whether the interest charged is excessive, usurious or opposed to public policy. (6) Agricultural borrowing are to be treated on a pedestal different from others. Charging and capitalisation of interest on agricultural loans cannot be permitted in India except on annual or six monthly rests depending on the rotation of crops in the area to which the agriculturist borrowers belong. (7) Any interest charged and/or capitalised in violation of RBI directives, as to rate of interest, or as to periods at which rests can be arrived at, shall be disallowed and/ or excluded from capital sum and be treated only as interest and dealt with accordingly. (8) Award of interest pendente lite and post-decree is discretionary with the Court as it is essentially governed by Section 34 of the CPC dehors the contract between the parties. In a given case if the Court finds that in the principal sum adjudged on the date of the suit the component of interest is disproportionate with the component of the principal sum actually advanced the Court may exercise its discretion in awarding interest pendente lite and postdecree interest at a lower rate or may even decline awarding such interest. The discretion shall be exercised fairly, judiciously and for reasons and not in an arbitrary or fanciful manner. In the decision referred (10) supra, where a suit was filed by bank for recovery of loan granted on an equitable mortgage and interest was granted from the date of filing the suit till realization, this Court held that the Court has discretion to reduce the rate of interest. The Division Bench while deciding the said matter preferred to follow the decision of the Apex Court in N.M. Veerappa v. Canara Bank, AIR 1988 SC 1101 in preference to the decision in State Bank of India v. Yasangi Venkateswara Rao, MANU/SC/0027/1999 : [1999]1SCR213 In the decision referred (9) supra while dealing with Order 34 Rule 11 of the Code of Civil Procedure it was held that in mortgage suits for recovery of bank loan grant of interest at the rate of 6% from the date of suit being proper the interest was reduced from 12% to 6%. 29. Be that as it may, in view of the fact that this is a commercial transaction and reasons had been recorded by the trial Court in this regard this Court is not inclined to disturb the rate of interest which was granted by the trial Court especially in the light of the fact that except the 7th defendant no other defendant had preferred the Appeal and in view of the said fact also it would not be just and equitable to modify the decree so far as it relates to the appellant/7th defendant only and hence this submission made by the Counsel for the appellant also cannot be accepted. 30. Point No. 5: In the light of the findings recorded above, the Appeal is devoid of merit and accordingly the same shall stand dismissed. It is true that the other defendants had not preferred any Appeal and the appellant/7th defendant alone had preferred the Appeal. But however in the light of the peculiar facts and circumstances of the case, parties to this litigation to bear their own costs.

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MANU/TN/0055/2002 Equivalent Citation: (2002)2MLJ185 IN THE HIGH COURT OF MADRAS Civil Miscellaneous Appeal Nos. 1397 to 1399 of 1996 and C.M.P. Nos. 13882 to 13883 of 1996 Decided On: 06.02.2002 Appellants: Alphonse Vs. Respondent: S. Dharmaraj Hon'ble P. Shanmugam and P. Thangavel, JJ. Counsels: For Appellant/Petitioner/Plaintiff: R. Sekar, Adv. forSarvabhauman Associates For Respondents/Defendant: G. Masilamani, Senior Counsel for T.P. Manoharan Subject: Family Catch Words Mentioned IN Acts/Rules/Orders: Indian Contract Act, 1872 - Sections 3, 4(1), 4(2), 5, 8, 16 and 16(3); Benami Transactions (Prohibition) Act, 1988 - Section 4; Transfer of Property Act - Section 52; Civil Procedure Code, 1908 - Order 6, Rule 4; Christian Law Disposition: C.M.A. Nos. 1397, 1398 and 1399 of 1996 allowed Case Note: Judges:

Family judicial separation Sections 3, 4 (1), 4 (2), 5, 8, 16 and 16 (3) of Indian Contract Act, 1872, Section 4 of Benami Transactions (Prohibition) Act, 1988, Section 52 of Transfer of Property Act, 1882, Order 6 Rule 4 of Code of Civil Procedure, 1908 and Christian Law appeal against dismissal of petition for judicial separation and dismissal of suit for decree to cancel deeds executed by her in favour of her husband and for return of jewels and money and against Order passed restoring conjugal right in favour of husband appellant executed document under dominance of her husband - appellant established undue influence appellant was put to constant threat for her life and she had apprehension that she will be murdered in view of unsubstantiated allegations touching on character of appellant and cruelty caused to her as evidenced by police complaint and coercion to execute documents appellant made out case for judicial separation held, Order directing restitution of conjugal rights set aside and decree prayed in reference to return of jewellery and judicial separation allowed.

JUDGMENT P. Shanmugam, J. 1. C.M.A. No.1397 of 1996 is the petitioner's appeal against the dismissal of O.P. No.16 of 1993 filed by her for judicial separation. C.M.A. No.1398 of 1996 is an appeal filed by the plaintiff/wife against the dismissal of the suit O.S. No.25 of 1996 for a decree to cancel the deeds executed by her in favour of her husband and for return of the jewels and money.

C.M.A. No.1399 of 1996 is filed by the respondent/wife in O.P. No.24 of 1992 against the order passed restoring the conjugal rights in favour of the husband. 2. All the three matters were decided by a common judgment dated 30.6.1994 by the Family Court Judge at Pondicherry. 3. The facts of the case are stated hereunder : The marriage between the appellant/wife and the respondent/husband took place as per the Christian Law on 15.9.1969. Out of their wedlock, the appellant had given birth to three children, each of them suffering with some deficiency. The appellant purchased four items of property under Exhibits A.6, A.7, A.8 and A.12 during the period between 1984 to 1988. According to the appellant, right from the beginning of their marriage, the respondent was ill-treating the appellant and on many occasions, drove her out of the house for getting huge money for his business and other luxurious expenses. Many panchayats were convened and he then used to take her back. According to her, he had spread rumours among the relatives suspecting the appellant's character and fidelity. However, she was tolerating the cruelty for the sake of her children and for the family. During April 1988, she was threatened to hand over all her jewels weighing about 150 sovereigns and receipt of the same was acknowledged by the respondent in a panchayat. During the last week of May 1988, in view of the constant threat to her life from the respondent and his henchmen, the appellant was forced to go to her mother's house and thereafter, she issued a lawyer's notice dated 26.5.1988. Once again, there was a panchayat and the respondent persuaded her to join him in Pondicherry. That also lasted only for a few weeks and in the last week of July 1988, the appellant was forced and coerced to execute three documents which were styled as release deed, power of attorney and gift deed, on the same day, i.e. on 28.7.1988 in favour of the respondent. She had to sign the documents against her will for fear of her life and safety. Inspite of her signing the documents, she was mercilessly beaten and became bed-ridden for nearly two months. Thereupon, her mother came with her close relatives and rescued her. The respondent detained the children and refused to hand over the jewels and hence the suit O.S. No.2 5 of 1996 for a decree to cancel those two documents and for a direction to return the gold jewels and money. 4. The appellant preferred O.P. No.73 of 1992 for a decree of judicial separation against the respondent herein on the ground of cruelty and the constant ill-treatment meted out to her by beating. She has also alleged, apart from what is stated above, that she was coerced and compelled to execute three documents under threat and undue influence and further alleged that in the written statement, the respondent had, without any regard for the truth, alleged that the appellant was living in criminal intimacy with the driver and that this fact was known to her daughter and others in Pondicherry. According to her, these allegations are, per se, false, malicious and motivated and it is no longer safe for her to continue the marital relationship with the respondent. According to her, the allegations amount to legal and mental cruelty and hence, she prayed for a decree of judicial separation. 5. Miscellaneous Petition No.24 of 1992 is an application filed by the respodnent herein under Section 212 of the French Civil Court for restitution of conjugal rights on the ground that there is nobody to look after the three children and that the appellant/wife is bound to oblige him for all the matrimonial obligations. He further says in his application that due to the love and affection that he had for his wife, he had purchased the properties in her name as benami and these properties thereafter were re-conveyed by the appellant in favour of the respondent. After having executed these deeds, at the instigation of her paternal uncle, she had filed a suit for cancellation of the deeds. According to the respondent, though she initially agreed for a settlement, at the instigation of her paternal uncle, she went back and hence the above application. 6. Both the suit as well as the appellant's application were resisted to by filing a detailed statement and counter, inter alia, contending and denying the allegation of cruelty. The respondent has stated that because of his attachment with his wife, he foolishly purchased the properties in the name of his wife. But, the appellant was unfaithful to him and was acting at the instigation of her relatives. According to the respondent, he had signed a blank white paper on 20.4.1 988 to avoid separation and thereafter, she had illicit relationship with the driver and in repentance of her behaviour, she expressed her willingness to execute three documents on 28.7.1988 and did execute the same and thereafter, she had filed the above suit as an afterthought at the instigation of her relatives. He had denied the handing over of the jewels and retention of the same by him. The respondent had denied the averments including the allegation of mental torture and ill-treatment. 7. The Family Court framed two issues in the suit for consideration, namely whether the three deeds were executed under coercion and threat to life and if they are to be cancelled and whether there was any entrustment of the jewels to the respondent and if the appellant is entitled to recover the same. The learned Judge answered the issues in favour of the respondent and held that the appellant had not proved that the documents were obtained

under undue influence and that there was any entrustment of 150 sovereigns of jewels and accordingly dismissed the suit. The learned Judge allowed O.P. No.24 of 1992 for restitution of conjugal rights on the finding that there was no illtreatment and that the appellant has got a duty to go and live with the respondent for the benefit and welfare of the children. The learned Judge also dismissed the application for judicial separation. He has found that the appellant has not proved the allegation of cruelty. 8. Learned counsel Mr. R. Sekar arguing on behalf of the appellant made the following submissions : (a) The events that had taken place from the date of the marriage, especially from April 1988 till the date of execution of the three deeds dated 28.7.1988 would clearly show that the appellant was under threat and coercion and was under the dominance and threat of her husband. (b) The recitals of the documents executed on 28.7.1988 and the manner and method of its execution would clearly show that all these documents were unconscionable on the face of it and therefore, they would clearly come under Sub-clause (3) of Section 16 of the Indian Contract Act, 1872 and the respondent has not discharged his burden. (c) The respondent has not issued any reply to the legal notice issued by the appellant, Ex.A.2 dated 26.5.1988 which alleged clearly that the respondent had treated the appellant cruelly and mercilessly and subjected her to various acts of defamation in front of her own children and relatives and that she had to go to her parents' house, unable to bear the torture and mental agony. In the said letter, she had called upon the respondent to act as per the terms of the agreement dated 20.4.1988. (d) The inconsistent stand of the respondent in reference to the motive for the alleged execution of the three documents and the failure of the learned Judge to consider the patent illegality in those documents has occasioned failure of justice. 9. Learned senior counsel Mr. G. Masilamani arguing on behalf of the respondent made the following submissions : (a) The properties were purchased benami in the name of the wife and she did not have any source for the purchase of these properties. (b) There is no proof of entrustment of 150 sovereigns of gold jewels with the respondent. (c) There is no pleading as required under Order 6, Rule 4 of the Code of Civil Procedure in the plaint and the appellant had come to the court with vague allegations and false stories. In the absence of any evidence in support of these vague allegations, she is not entitled for the decree and order as prayed for. (d) The respondent has established that the properties were initially purchased benami and that the appellant had executed the impugned documents on her own volition. In order to establish that the properties were purchased benami, the respondent has let in the evidence of D.W.5, the vendor to the documents, and established the same. According to him, the original documents were not produced and the possession and enjoyment of the properties was with the respondent and the respondent had paid the money for the purchase of these properties. (e) There is no proof for the entrustment of jewels with the respondent and in the absence of any evidence whatsoever, the appellant is not entitled to seek for a decree in reference to the jewels. (f) The appellant is not entitled to let in any oral evidence contrary to the writings in the documents. 10. We have heard the counsel for the appellant Mr. R. Sekar and Mr. G. Masilamani, senior counsel appearing on behalf of the respondent, gone through the records and considered the matter carefully. 11. The following are the questions that arise for consideration in these appeals : (i) Whether the appellant has established her allegation of cruelty and dominance over her by the respondent ? (ii) Whether Exhibits A.3 and A.11 are brought about by undue influence and coercion and are liable to be set aside ?

(iii) Whether the appellant is entitled to the jewels and if so, to what extent ? (iv) Whether the appellant has made out a case for judicial separation ? and (v) What are the reliefs that are to be granted to the parties ? 12. The parties were married on 15.9.1969 as per Christian Law and lived together at the appellant's place at Komarapalayam initially. The appellant's family was affluent, whereas the respondent admittedly was depending on the appellant's father. They came to Cuddalore some time in the year 1980. The father of the appellant died in the year 1983. Partition took place between the appellant and her brothers immediately thereafter. The appellant purchased the properties under Item 4 of 'B' Schedule on 15.10.1984, Item 3 of 'B' Schedule on 3.12 .1984, Item 2 of 'B' Schedule on 22.10.1986 and Item 1 of 'B' Schedule on 1.2.1988 in her name. Apart from this, she had earlier purchased at Komarapalayam, in her father's place, a property on 11.4.1972. She was given, at the time of marriage, 150 sovereigns of gold jewellery. Though there is some controversy regarding the actual quantum of sovereigns given to the appellant and contributed by the respondent, the fact that the appellant was given a considerable amount of jewellery in the range of 100 sovereigns cannot be disputed. 13. The case of the appellant is that ever since the birth of the children, the husband started ill-treating her in order to force her to get huge sums of money for his business and other luxurious expenses. There were many occasions of compromise and on the promise of the respondent, she would come back and live with him. However, the respondent used to keep quite for few days and again would begin to illtreat and harass her. Though there were many such instances of illtreatment, the important piece of evidence in support of a compromise is evidenced by Ex.A.1, the Panchayat Muchalika, where the appellant as well as the respondent have signed. The English transaction of this Panchayat Muchalika is as follows : "(1) The family is in a confused state without peace and till peace is restored between the parties and till the appellant agrees, the parties shall live separately. (2) The appellant will be living at the Tagore Nagar house with the children. The respondent shall pay the expenses for the family. He should not refuse to pay the same and create a scene by seeking accounts for the expenses. (3) Under no circumstances, the respondent should scold or beat the appellant and should not interfere with her going out and at the same time, the appellant also will not interfere and take any liberty with the respondent. (4) On important occasions (marriage and functions), the respondent shall take the jewels and give it to the appellant. (5) If any of the above conditions are violated, the appellant is entitled to take legal steps. 14. A reading of the above Panchayat Muchalika shows that it is written in plain words, coming out naturally. It makes clear that there is conflict and no peace in the family and that the appellant has agreed to live at the Tagore Nagar house along with the children. The respondent had complete control over the income of the family and the jewellery of the appellant. Even this panchayat did not bring about peace in the family and the appellant left her house and joined her mother at Komarapalayam. Afer this, the appellant had sent a lawyer's notice Ex.A.2 dated 26.5.1988 wherein she had stated that the respondent had been treating her cruelly and subjected her to various acts of defamation in front of her own children and relatives. She was driven out of the family house and many panchayats were convened and on the repentance of the respondent that no such things will take place in future, the appellant used to come back. However, after a few days, again the harassment and mental agony will begin. The respondent had spread rumours among the relatives about the character of the appellant, which caused serious mental agony to the appellant. She has specifically stated in Ex.A.2 as follows : "As you are also aware that all the jewels and cash belonging to the appellant are with the respondent in safe custody." Ultimately, she requested as follows : "Our client, as per the agreed terms dated 20.4.1988, calls upon you to allow her to live peacefully, failing which our client will be forced to take legal steps against you in a court of law."

Admittedly, there was no reply for this legal notice. However, according to the appellant, due to the intervention of the appellant's brothers and on the assurance of the respondent, who came down to her mother's place stating that he would behave properly, she came back to live with him. It is thereafter that the respondent gave a police complaint on 17.7.1988 against the appellant alleging that she had ran away with one Jayachandran and that she was missing. The fact that the respondent had given a police complaint on 17.7.1988 is admitted by the appellant. On the basis of this police complaint, a police officer came to the appellant's house and asked her to come to the police station. The respondent's uncle one Soosairaj had also threatened her at 7 pm on that day to execute the documents as required. Thereafter, on the next day, i.e. on 28.7.1988, she executed three documents styling them as release deed, power of attorney and gift deed in favour of the respondent. The appellant did not question the respondent in reference to the coercion and compulsion immediately thereafter, but could react only after two months, starting with the lawyer's notice dated 29.11.1988, Ex.A.4 and culminating in the filing of the suit on 29.1.1988. 15. The following circumstances would establish that the execution of the documents is quite unnatural, apart from the allegation of undue influence (i) Ex.B.3 is the Release Deed executed by the appellant in favour of the respondent. There is no mention as to the items of property or the description of the property in the same. The document recites as though the appellant is releasing the property purchased in her name and that the property was purchased by the respondent out of his earnings. Obviously, the property is not a joint family property nor the respondent had any interest in the property. Therefore, there is no question of releasing the rights of the appellant in favour of the respondent. The reference in the release deed is to the effect that the respondent/husband had purchased the property in his wife's name from out of his income and that the said property has to be treated as family property and that the appellant/wife has to release the rights without any consideration. Obviously, it is a self-serving stand of the respondent/husband. (ii) Ex.B.4 is the Power of Attorney executed by the appellant in favour of the respondent for the purpose of managing suit items 2 to 4. The reason stated in the document is that the appellant has to go to her mother's house and therefore, in order to manage the property, the husband is given the power. It is stated that the wife is not in a position to manage the properties and therefore, the husband is appointed as the person-in-confidence for giving the power of attorney. In the latter portion of the document, it is stated that the husband is given the right to make applications before the authorities and change the accounts from the bank and take the money, and if necessary, close the account. Here again, the question of alleged management does not arise, since according to him, he obtained a release deed. By virtue of this power of attorney, the respondent concedes that the properties still belonged to his wife and that he only wants to manage the same. (iii) Ex.A.1 is a Gift Deed of Item 1 of 'B' Schedule Tagore Nagar house. The reason stated in the gift deed is that the appellant is executing the gift out of love and affection. This document also is in reference to the only house wherein the appellant is living, and the genuineness of this document, gifting away this property in favour of the respondent by the appellant, in the light of the allegations of cruelty as evidenced by Exhibits A.1 and A.2 appears to be difficult to accept, especially in view of the following statement in the document : "By virtue of the fact that you (respondent) are my husband and out of love and affection and that you have earned and purchased the property in my name, I desire that you must keep and enjoy the property." 16. By going through the recitals in the documents, we find that there is intrinsic evidence in the documents themselves positively suggesting that these documents were made to suit his requirements. The recitals are so couched in a language which is contrary to the actual state of affairs. Apart from this, the circumstances under which these documents came into existence would support an inference that the respondent is out to take away all the properties of the appellant and deprive her of any right of an independent existence. The case of the appellant is that these documents were obtained by coercion, compulsion and under threat to the life of her person and her children and in the light of the serious allegations of cruelty, including the doubting of her fidelity. The following are the circumstances set out by her in support of this allegation : (i) Exhibit A.1, the Panchayat Muchalika. (ii) Exhibit A.2, the notice issued by the appellant through her lawyer alleging acts of cruelty, defamation and harassment, for which there is no reply. (iii) The police complaint daetd 17.7.1988 alleging that the appellant had ran away and is missing.

(iv) The visit of the police officers to the appellant's house asking her to come to the police station. These facts have been spoken to by the witnesses and cannot be disputed. 17. Therefore, in the light of the alleged cruelty, defamation and threat by way of the police complaint, the appellant's case that she was compelled and forced and under the dominance of her husband she had to execute the three documents, has to be accepted. 18. On the contrary, the case of the respondent in reference to this allegation is contradicting. At one stage, he has stated that the properties were purchased by him benami in the appellant's name and therefore, she had executed the same in his favour. In another place, he says that the appellant had executed these documents in repentance of her misdeeds. He also says in Ex.A.10, reply notice dated 19.12.1988, that he never doubted his wife's character. 19. After the arrangement under Ex.A.1, on the specific condition of the appellant that on violation of the terms, she is entitled to take legal action, coupled with Ex.A.2 notice dated 26.5.1988 alleging cruelty, for which there is no reply, the fact is established that they were living together till 20.4.1988 and some time thereafter on the basis of the said arrangement, and that the appellant had left the house on the respondent's failure to keep up with the terms of the arrangement. After 26.5.1988, the fact that she had come back to Pondicherry is also not in dispute. The respondent had given a complaint to the police on 17.7.1988 that his wife had eloped. Therefore, the fact that the appellant was living under the dominance of her husband till the date of the execution of these three documents on 28.7.1988 cannot be disputed and coupled with the artificial, unnatural and questionable recitals found in those three deeds, the appellant has made out a case that they were brought about by coercion and compulsion. The appellant was also right in saying that the statutory presumption is raised in this case in favour of the appellant. The suit properties which stood in the name of the appellant were sought to be taken away at one stroke and on the basis of the evidence, it is seen that they are unconscionable, one-sided and therefore, the burden is on the respondent to establish that the documents were not induced by undue influence. The case of the respondent that the wife had executed the documents out of love and affection, in the light of his own allegation of police complaint on 17.7.1988, hardly ten days prior to the execution of the gift deed, is very difficult to accept. The argument that this court need not go into the aspect of the legal validity or otherwise of the document cannot be accepted. 20. The appellant, apart from examining herself, examined three other witnesses on her side and the respondent examined himself and eight others. Both of them have marked Exhibits A.1 to A.36 and B.1 to B.36 respectively. Ex.A.1 is a crucial document, wherein the respondent admits that there was confusion and dispute in the family and wherein he agreed that he would not beat his wife and that the jewels were entrusted with the husband. Though at a later stage the respondent disowns his letter and stated that his signature was obtained in a blank white paper, in his earliest reply notice dated 19.12.1988, Ex.A.10, the respondent has admitted as follows : "Your alleged letter given by my client on 20.4.1988 was again given by my client under the pressure of the so called henchmen of my client, namely the Parish Priest, my client's uncle, your client's brother (also a Priest) and other common friends and relatives. It is only given to satisfy your client as usual with the solemn assurance of the Parish Priest that it will be kept in his custody. But, your client's brother, who is also a Priest, fraudulently collected the letter from the Parish Priest of Thattanchavadi Rev. Fr. Lourdenadhan and misused it for some oblique purposes." From the above, it is clear that the respondent is fully aware of the contents of the letter and the same was given under the alleged pressure and to satisfy the appellant. Whereas, in the written statement, in paragraph 7, he has stated that he was called upon to sign against his conscience in a blank white paper by the so called panchayatdars. To the same effect, he has repeated in his deposition as D.W.1, wherein he says that nothing was written in Ex.A.1 and that he did not know anything about the contents of the letter and the signature of the plaintiff and the witnesses. The respodnent is not speaking the truth, especially after having admitted the same in his reply notice Ex.A.10. 21. It is further seen that at the earliest point of time, the appellant had issued Ex.A.2 letter when the respondent went back on his assurance of treating the appellant reasonably with the specific allegation of ill-treatment, cruelty and beating. She has also referred to Ex.A.1 dated 20.4.1988 therein. For this notice, there was no reply by the respondent. After having stated in Ex.A.10 reply notice dated 19.12.1988 that he never doubted the appellant's chastity or her fidelity, the respondent went back and made all sorts of allegations against the appellant in the written statement and in his deposition. The respondent refers to the

illicit relationship in a number of places in his written statement, which per se, amounts to cruelty, if it goes unsubstantiated. He has stated as follows : "He never told about the said immoral conduct of the plaintiff since he was not aware of the same personally." "Thus, the plaintiff was induced to become unfaithful to the defendant." In paragraph 10, he says as follows : "In the course of time during the said separation, the said illicit relationship of the plaintiff with the driver became an open secret in the month of July, 1988." He admits of giving a police complaint in his deposition about the plaintiff's missing, suspecting that she had ran away with one Jayachandran. D.W.7, in his evidence, admits that he saw police in the house of the appellant and he has stated that only on his request, the police went back. Inspite of this clear evidence, the Family Court erroneously concluded that the appellant has admitted in her evidence that she was living separately from July 1988 onwards and hence, there was no domination by the husband against the wife and that therefore, there can be no presumption under Section 16 of the Contract Act. 22. The respondent has admitted in his evidence as D.W.1 as follows : "On 13.7.1988, the appellant returned to Pondicherry from Hosur after the issue of Ex.A.2." The appellant, in her evidence as P.W.1, has clearly stated that even after the letter dated 20.4.1988, the respondent was ill-treating her after consuming liquor and that she went to her mother's house and issued the lawyer's notice Ex.A.2, for which no reply was given. She did not return to her husband's house. The respondent came to her house and took her back on a promise and consequently, she had returned to her husband's house only after he went over to Dharmapuri and persuaded her brothers. She had resumed her marital life with her husband. It is only thereafter that a complaint dated 17.7.1988 is said to have been given and on 21.7.1988, the police officer came to her house and asked her to come to the police station and that the respondent's uncle Soosairaj threatened her over phone on the same night asking her to come to the Registrar Office on the next day. Therefore, the appellant, who went back to her mother's house, returned to Pondicherry and to her Tagore Nagar house, which was the only house as residence and was living there till she was made to sign the three documents at one stroke. The trial court failed to consider the continued cruelty undergone by the appellant and the fact that she was to bring up three children who are admittedly handicapped and the fact that she was branded as an immoral and unfaithful wife and also that a police complaint about her alleged eloping with the driver was given and the police was enquiring about her. All these facts cumulatively will definitely go to show that the documents said to have been executed on 28.7.1988 were obtained under those circumstances by coercion and undue influence. 23. The attempts of the respondent to justify the execution of the documents are conflicting and contradictory. At one stage, the respondent submits that all the properties were purchased by him benami in the name of the wife out of love and affection and that the wife wanted to go to her native place, entrusting the management of the properties with the respondent, and in another place, he has stated that the appellant, in repentance of her behaviour, had executed those documents. In Ex.A.10, another story is stated to the effect that the appellant had disposed of her Komarapalayam property for a low sale consideration without the knowledge of the respondent and when the respondent questioned about her conduct, she had informed him that she would give back to the respondent all the properties that were purchased in her name and only under those circumstances a panchayat was held and she executed the documents in question on her own free will and without any coercion or undue influence. The stand of the respondent that there was no proper pleading and proof cannot be accepted. In paragraph 9 of her plaint, the appellant has stated as follows : "In the last week of July 1988, the petitioner was under the complete control and under the influence of the respondent. She was forced by the respondent against her will and was taken to the SubRegistrar's Office where she was forced to sign some document under threat and coercion. For fear of her life and the safety of her children, she signed the documents against her free will under the undue influence of the respondent. The respondent had a huge following to back him up in all his illegal and unlawful activities." In her evidence as P.W.1, the appellant, in her chief-exmination, has stated as follows : "Even subsequent to the documents, he has illtreated me. He used to illtreat me after consuming liquor. I went to my mother's house and issued a lawyers notice to the defendant. Ex.A.2 is the copy of the lawyers notice issued by me to the defendant. No reply

was given by the defendant even after receipt of the notice. I did not return to my husbands house. The defendant came to my house and has taken me back on a promise in the result I have returned to my husband's house only after my husband went over to Dharmapuri and my husband has pursuaded my brothers Gasper and Filominaraj. I resumed my marital life with my husband. On 27.7.88, a Police Officer came to my house and asked me to come to Police Station on the allegation that my husband has given a complaint against me. The defendants uncle Susairaj has threatened me over phone on the same night at 7.00 p.m. and threatened me to come on the next day to the Registrar Office for putting signature before the Registrar. I also rang up to my uncle Advocate Mr. Jayaraj and stated to him about the threat of Soosairaj and asked me his advise. He has also advised me not to put signature in any document and advised me not to put signature in any document and advised me to leave Pondicherry immediately. Next day the defendants uncle Soosairaj came along with two persons and the police Constable. I do not know who the persons who accompanied Soosairaj. They obtained my signatures iin several printed forms and plain papers and stamped papers in the house. They have taken me to the Registrar Office in a van. The defendant went to the Registrar Office along with his uncle and came after about fifteen minutes. They brought me inside the Registrar Office and asked my thumb impressions and signatures. I have done so in ten or fifteen papers. I was taken back to my house at Tagore Nagar. On the same night the defendant along with his friends have illtreated me and misbehaved with me. When I enquired my husband, he has assaulted me and I have sustained cut injury in my middle finger." 24. It is seen that all the three documents were executed consecutively within a short span of 15 minutes. Assuming that undue influence is not established for the sake of argument, a reading of the documents in question will show that the transaction, on the face of it, on the basis of the evidence adduced, appears to be unconscionable in the absence of any acceptable reason for the appellant to execute those documents. Even the learned counsel for the respondent has to concede that the validity of the documents in question cannot be the subject matter in these proceedings and the same has to be separately raised and decided. We are unable to accept such a stand. The documents are under question, both on the basis of the manner of their execution as well as on the validity of their effect. The respondent has not satisfactorily explained as to how a release deed could be executed when the property, which was purchased in the name of the appellant with all the records and being enjoyed by her, can be released in favour of the respondent. Similarly, the question of giving a power of attorney for the very same property also does not arise for consideration. Again, the reasons for executing the gift deed in favour of the respondent who is said to have caused so much of ill-treatment and cruelty and was suspecting the fidelity of the appellant are not at all acceptable. It is too artificial to accept the case of the respondent that the appellant executed a gift out of love and affection for her husband. Yet another aspect is that by these deeds, the appellant has parted away with all her properties without anything to fall back upon for herself. We have to remember that the appellant's father is no more and her brothers have obtained release deed from her and that she had sold away the only property through power of attorney obtained from her by her brothers and therefore, it is difficult to accept the case of the respondent that all the properties were thus parted away in favour of the respondent. We must also appreciate the fact that the mental condition of the wife, when the husband makes allegations of suspicion of her character and gives a police complaint and the police comes to her house to take her to the police station, would definitely form part of coercion to get the documents executed. 25. In support of the submission that the respondent had not discharged the burden of proof and the law on this aspect, reference was made to a judgment of the Division Bench of this Court in ANDALAMMAL VS . RAJESWARI VEDACHALAM MANU/TN/0205/1985 : AIR1985Mad321 , wherein the Division Bench was dealing with a case of similar nature. In that case, their lordships held that if it is established that a person, who is in a position to dominate the will of another, entered into a contract with him and if the transaction appeared, either on the face of it or on evidence adduced, to be unconscionable, then the burden is upon the person who was dominating the will of the other person, to prove that such contract was not induced by undue influence. The word "shall" found in Section 16(3) of the Contract Act indicates that the presumption is mandatory. The concomitant position is that if the burden is not discharged, the presumption shall prevail. It is further significant to notice that either on the evidence or on the face of the transaction, it is enough if it appeared to be unconscionable. In other words, it is enough for the appellant to substantiate that the transaction was prima facie unconscionable and that she was under the domination of her husband. The Division Bench also held that if a person were to stand in a fiduciary relationship with another, the former would be deemed to have dominated the will of the latter. They have also referred and followed the decision of the Privy Council in INCHE NORIAH VS. SHAIK ALLIE A.I.R. 1929 P.C. 3, wherein the Privy Council had held that the relationship between the donor and the donee were sufficient to raise the presumption of the influence of the donee over the donor and to render it incumbent upon him to prove that the gift was a spontaneous act of the donor acting under the circumstances which enabled her to exercise an independent will and which would justify the Court in holding that the gift was the result of a free exercise of her will. Their lordships also referred to the judgment of the Supreme Court in SUBASH CHANDRA VS. GANGA

PRASAD MANU/SC/0069/1966 and held in reference to the observation of the Supreme Court as follows : "Merely because the parties were nearly related to each other, no presumption of undue influence can arise. Therefore, it cannot be understood that the Supreme Court had subscribed their concurrence to the above observation. We had taken some pains to refer to this passage because the Section as such does not make any reference to relationship. It may be stated that in that case, the Supreme Court set aside the judgment and decree of the High Court particularly because the case of undue influence had not been sufficiently alleged either in the pleadings or substantiated in the evidence adduced." On going through the evidence in this case, we find that there are sufficient pleadings and evidence as set out above, apart from the intrinsic material available in the documents themselves to prove that the documents were brought about by undue influence. 26. In the light of the above, we have no hesitation in holding that the appellant has clearly established undue influence and also her allegation that the execution of the documents was unconscionable and that the respondent has not discharged his burden and that the Family Court has erroneously failed to consider all these aspects and hence, the judgment of the Family Court is liable to be set aside. 27. The case of the respondent that the properties were originally purchased by the respondent in the name of the wife has not been established. It is well settled that the burden of proving that the transactions were made benami and that the apparent purchaser is not the real owner rests on the respondent. There is absolutely no acceptable legal evidence in this case to establish the benami character. When the respondent alleged that the wife had no source to purchase these properties during the period from 1984 to 1988, he has neither explained as to how he had the source to purchase these properties. On the contrary, it is admitted that the wife comes from an affluent family and that she is an Income Tax Assessee, whereas there is no evidence to show about any independent source of income for the respondent to purchase all these properties in the name of his wife. The Family Court has failed to see whether the respondent had discharged his burden of proving the case of benami. It is by now well settled that the burden is upon the person who sets up the case of benami to prove the same. The relevant factors for the purpose of establishing the benami transaction, namely the passing of consideration, motive for the transaction and mutation of the records were not proved by the respondent. The respondent has not proved that he had the source to offer the consideration and that he was in exclusive possession and enjoyment of the property and hence, his statement that these properties were purchased out of love and affection also cannot be accepted. 28. There is a bar under Section 4 of the Benami Transactions ( Prohibition) Act, 1988 to make any claim in respect of any property held benami. There is a legal presumption, unless the contrary is proved, that the property had been purchased for the benefit of the wife. The said Act received the assent of the President on 5.9.1988. Sections 3, 5 and 8 of the Act came into force on 5.9.1988 and the remaining Sections were deemed to have come into force on 19.5.1988. In the case on hand, the documents were executed on 28.7.1988 and the suit was filed on 29.1.1990. The respondent filed his written statement on 9.12.1991. As per Section 4(2) of the Act, no defence based on any right in respect of any property held benami shall be allowed in any suit by a person claiming to be the real owner of such property. These provisions were the subject matter of interpretation by the Supreme Court in P. RAJAGOPAL REDDY & OTHERS VS . PADMINI CHANDRASEKARAN MANU/SC/1978/1995 , wherein, while upholding Section 4(2) of the Act, their lordships held that all real owners who stake their claim regarding benami transaction, after Sections 4(1) and 4(2) came into operation, are given uniform treatment by these provisions, whether they come as plaintiffs or as defendants. Their lordships held as follows : "Even though such a suit might have been filed prior to 19.5.1988, if before the stage of filing of defence by the real owner is reached Section 4(2) becomes operative from 19.5.1988, then such a defence as laid down under Section 4(2) will not be allowed to such a defendant." Applying this ratio in reference to the interpretation of Section 4(2) of the Act, the respondent herein cannot be allowed to raise the plea of benami transaction in reference to the properties in question. 29. Insofar as the entrustment of jewels is concerned, in Ex.A.1 notice, the rsepondent had categorically agreed that on important occasions, he will take and give the jewels to the appellant. In Ex.A.2 notice, it is categorically stated that all the jewels and cash belonging to the appellant was in safe custody, for which there is no reply. P.W.1 has stated in her evidence that she had handed over 150 sovereigns of jewels to the respondent in the presence of the panchayatdars. The respondent had admitted in his written statement that

the appellant was adorned with 75 sovereigns at the time of her marriage and that the respondent gave the appellant 30 sovereigns. The respondent, as R.W.1 in O.P. No.234 of 1990, has categorically admitted in the cross-examination as follows : "I have not operated so many lockers after the petitioner (wife) left me. On the date of execution of Ex.A.1, the jewels were with me. Afterwards, on her demand, the jewels were returned to her. I have not mentioned in my previous notice that the petitioner had taken 105 sovereigns of jewels with her." In the counter filed in O.P. No.234 of 1990 to the Pauper Application, the respondent has stated that the appellant was having 105 sovereigns of gold jewels with her. Therefore, it is clear that the appellant was having 105 sovereigns of gold jewels and in the light of Ex.A.1, Panchayat Muchalika, the respondent has admitted of the entrustment of the jewellery to him. Therefore, it is clear that the respondent is retaining the 105 sovereigns of jewels belonging to the appellant from 20.4.1988 onwards. The Family Court failed to consider the conflicting stand of the respondent and the admitted case that the appellant was adorned with 105 sovereigns of gold jewellery. Therefore, the only question that remained to be determined was whether the jewels were entrusted with the respondent or whether the appellant had taken all the jewellery with her. In Ex.A.10 notice, the case of the respondent is that the jewels were handed over to her father and were with him till his death. Whereas, in Ex.A.19, the respondent says that the appellant had taken her 75 sovereigns of jewels along with the 35 sovereigns of jewels of his mother when she left her matrimonial home. A different story is stated in the written statement, wherein it is stated that the appellant's father had entrusted her jewels with one Irudayaselvam, the brother-in-law of the respondent. All these things ought not have been accepted by the Family Court in the light of Ex.A.2, the letter given by the respondent himself. The appellant, in her plaint, has specifically pleaded that during April 1988, the respondent threatened the petitioner to hand over all her jewels of gold weighing 150 sovereigns. A Panchayat was convened in the presence of one Rev. Father Lourdusamy on 20.4.1988 about the jewels. The Panchayatdars asked the petitioner to hand over the jewels to the respondent for safe custody. A letter to this effect was signed by the petitioner and the respondent had affirmed in the letter about the handing over the jewels to the respondent. This is evidenced by Ex.A.2, the appellant's notice to the respondent, wherein it was stated as follows : "You are also aware that all the jewels and cash belonging to our client are with you in safe custody." The respondent was in the custody of the locker as evidenced by his own admission in the cross-examination referred to earlier and that is why in Ex.A.1, it was stated that the respondent has to take those jewels during important functions like marriage and other ceremonies and give them to the appellant to wear. From the above, it can safely be concluded that the respondent had been entrused with 105 sovereigns of gold jewels belonging to the appellant and that he has retained them and therefore, he is bound to return the same. The order of the trial court, therefore, to that extent is liable to be set aside. 30. It is submitted by the Senior Counsel for the respondent that the respondent had sold all but one of the properties, the subject matter of the impugned documents. The judgment of the Family Court was rendered on 30.6.1994. The respondent had sold Item 3 of the 'B' Schedule land on 5.12.1995 and another portion in March, 1996. He further sold Item 1 of the 'B' Schedule property namely the Tagore Nagar house on 12.12.1998. According to him, he has put up a construction in Item 2 of the 'B' Schedule land and let in tenants and this appears to have been done to see that she may not be able to physically get at the properties. All these alleged transactions would only show that the respondent has dealt with these properties as his own on the basis of the alleged release deed, power of attorney and gift deed. The suit was dismissed along with the petitions by a common judgment dated 30.6.1994. The appellant filed her appeal on 23.8.1994. The respondent admittedly had notice and inspite of the same, had transferred these properties, which are the subject matter of the appeals, on 5 .12.1995, March 1996 and on 12.2.1998. The appeal has to be held to be a continuation of the suit so as to make the transfer made pending the appeal are liable to be hit by Section52 of the Transfer of Property Act. A Division Bench of the Madras High Court, in KRISHNAPPA CHETTY VS. ABDUL KHADER SAHEB A.I.R. 1915 MAD 495, has accepted the argument that alienations made during the continuance of the proceedings originated by the claim petition till the disposal of the suit are affected by the doctrine of lis pendens. The said principle will apply to the present case in reference to appeal also. Hence, the transactions are clearly hit by lis pendens. 31. Learned counsel for the appellant referred to these transactions and also the talks of compromise. It is seen that several panchayats and compromises are freely referred to, right from the beginning, at several stages. We are of the view that the respondent has made these transactions as a fait accompli and his offer of these properties in favour of the children is only an after-thought. As a matter of fact, the counsel for the appellant

submitted that at one particular stage of compromise talk, what all the appellant had requested was a life estate in the properties and the remainder to the children, since she had no other property or income to sustain herself. We have no doubt that the appellant is as affectionate as the respondent and is interested in the welfare of the three unfortunate children. The respondent cannot take advantage of the disability of the children and on that score, deprive the interest of the respondent. It is stated that the first daughter, aged 29 years, got married to a Law graduate during the year 1994 and she is also a Law graduate. She has now got a son aged six years. The second daughter is said to be mentally retarded and is aged 27 years. The third son, with certain immunity deficiency, is studying. We are unable to appreciate the action of the respondent to dispose of all these properties when the appeals are pending and come forward to settle the properties in favour of the children. We are not persuaded to accept these proposals as there were a number of such attempts, proposals and counter-proposals in the past, which did not fructify to the satisfaction of the parties, all along. 32. In the light of the unsubstantiated allegations touching on the character of the appellant and the cruelty caused on her, as evidenced by the false police complaint and coercion to execute the documents, the appellant has made out a case for judicial separation. According to the appellant, she was put to constant threat for her life and she had apprehension that she will be murdered, bodily harmed, molested or her modesty outraged by the respondent or his henchmen if she made any protest for all the brutality shown to her. She has stated that she was beatun up and ill-treated and forcibly driven out of the house and thereafter, she issued a registered notice dated 26.5.1988, for which there is no reply. She was thereafter persuaded by the respondent to come back to live with him and even thereafter, the police complaint was given against her. She had alleged that the respondent had filed a written statement in the suit on 9.12.1991, wherein he has, without any regard for the truth, alleged that she was living in criminal intimacy with one Jayachandran. The allegations are, per se, false, malicious, attrocious and motivated. She has also stated that the respondent had wantonly deserted her without any justifiable cause and put her in a horrible state of mind. Though the allegations are denied in the counter, it is clearly established on the admitted statement of the respondent himself that he made accusations about her character and the same remains unsubstantiated. No attempt has been made before this court to justify the said stand of the respondent. For all other reasons stated above in the above suit, we find that the appellant has made out a case for judicial separation. The Family Court has erroneously held that the appellant had not proved the alleged cruelty and therefore, there has to be an order of restitution of conjugal rights. We have found that the appellant has clearly and cogently established her allegation of cruelty against the respondent. Hence, the order directing restitution of conjugal rights has to be set aside. 33. In the result, the suit O.S. No.25 of 1991 is decreed as prayed for in reference to the documents impugned and to the extent indicated in reference the jewellery. O.P. No.16 of 1993 for a decree of judicial separation is allowed. O.P. No.24 of 1992 is dismissed. All the three appeals namely C.M.A. Nos.1397, 1398 and 1399 of 1996 are allowed with costs. 34. Consequently, the connected C.M.Ps. are closed.

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MANU/TN/0012/1990 Equivalent Citation: AIR1990Mad46 IN THE HIGH COURT OF MADRAS O.S.A. Nos. 74 and 77 of 1979 Decided On: 02.02.1989 Appellants: Bhupendrakumar R. Parikh and another Vs. Respondent: M.K. Lakshmi and others Hon'ble Mr. Mohan Offcg. C.J. and David Annoussamy, J. Judges:

Counsels: For Appellant/Petitioner/Plaintiff: U.N.R. Rao and N.C. Raghavachari, for N.S. Varadachari, Advs. For Respondents/Defendant: M.R. Narayanaswami and V. Swaminathan, Advs. Subject: Property Catch Words Mentioned IN Acts/Rules/Orders: Indian Evidence Act, 1872 - Sections 101, 104 and 111; Contract Act, 1872 - Section 16(3); Civil Procedure Code, 1908 - Order 6, Rule 2; Transfer of Property Act, 1882 Section 41 Cases Referred: Mercantile Credit Co. Ltd. v. Hamblin, (1964) 3 All ER 592, (1964) 3 WLR 798; Zamet v. Hyman, (1961) 3 All ER 933, (1961) 1 WLR 1442; Howes v. Bishop, (1909) 2 KB 390, 100 LT 826, 78 LJKB 796; Shivgangawa v. Basangouda, AIR 1938 Bom 304; Tungabai Purushottam v. Yeshwant Dunkar, (1945) ILR Bom 189, (AIR 1945 PC 8); Pannalal v. Dilip Kumar, AIR 1977 Cal 297; Noriah v. Shaik Alli, 1929 Mad WN 105, (AIR 1929 PC 3); Daya Shankar v. Bachi, AIR 1982 All 376; Bishundeo v. Sheogeni Rai, AIR 1951 SC 280; Ladli Prasad Jaiswal v. Karnal Distillery Co. Ltd. 1964 (1) SCR 270, (AIR 1963 SC 1279); Sattemma v. Subbi Reddy, AIR 1963 Andh Pra 72; Subhas Chandra v. Ganga Prosad, AIR 1967 SC 878; Bira Jena v. Tauli Dei, AIR 1972 Orissa 143; Union of India v Pandurang Kashinath More, AIR 1962 SC 630; A. Gangadhara Rao v. G. Gangarao, AIR 1968 Andh Pra 291; Vinod Kumar v. Surjit Kaur, AIR 1987 SC 2179;Hanumant v. State of M.P., AIR 1952 SC 343; Cooke v. Head, (1972) 2 All ER 38 Case Note:

(i) Property undue influence Sections 101, 104 and 111 of Indian Evidence Act, 1872, Section 16 (3) of Contract Act, 1872, Order 6 Rule 2 of Code of Civil Procedure, 1908 and Section 41 of Transfer of Property Act, 1882 whether there was undue influence by first defendant on plaintiff whenever it is shown that there was possibility of exercise of dominion and influence by one party on other presumption of undue influence and burden of proving lie on stronger party plaintiff not aware of transaction at all and signature obtained from her without her being informed of nature of transaction and it is for that reason she pleaded fraud question answered in negative.

(ii) Sale-consideration whether sale consideration was paid by plaintiff or first defendant exclusively plaintiff did not disclose reason why benami transaction resorted to property of plaintiff mortgaged for purpose of paying consideration for suit property but money realised not utilised for that purpose - substantial

amount paid by first defendant towards acquisition of suit property by mortgaging his property and smaller amount paid by plaintiff - no evidence to what was quantum of income and extent of expense by each one of them during relevant period fact that property acquired with her own money in name of first defendant which sought to be established by overwhelming balance of income over expenses of plaintiff far from being proved first defendant not paid entire money alone held, sale consideration partly paid by plaintiff.

(iii) Relief to what relief parties entitled no evidence to establish that any one of them exclusively contributed to acquisition of suit property - plaintiff declared to be owner of property and mortgages executed by first defendant in favour of third and fourth binding on her for half of their value.

ORDER David Annoussamy, J. 1. The first appeal is by defendents 3 and 4. The second appeal was preferred by the first defendant, who is now represented by his legal heirs, appellants 2 to 7. Respondents 1 to 4 in that appeal are, respectively the plaintiff and defendants 2 to 4 in the suit. 2. The case of the plaintiff may be summarized as follows: The plaintiff is the second wife of one Alagappa Chettiar and out of that wedlock she had two sons and one daughter. On account of misunderstanding between her husband and her mother Kannammal, she left her husband and came to Madras with their children in the year 1951 and resided at No. 1. Shanmugha Mudali Street, Royapettah Madras, which house belonged to her mother. She used to work as a musician and film artiste. Her children also contributed to the family expenses as film artistes. When her mother was alive, the first defendant who was then manager of a Cinema theatre became known to the plaintiff's mother and was frequenting her residence. Later he became unemployed. Finding that the plaintiff was well off, he wormed himself into her confidence and affection; representing that there was misunderstanding between him and his wife, he took permanent residence with the plaintiff in the year 1959. The plaintiff was not acquainted with English language and was quite ignorant of business affairs and hence she allowed him to manage all her affairs and entrusted to him all her papers and monies. The first defendant used to obtain her signatures either in blank or with some written matter or typewritten matter representing that they were required in connection with her affairs. The plaintiff used to sign whenever she s asked to do so, believing his representations. She even allowed him to represent herself as her husband in all dealings with the outside world since he persuaded her that such a status would command respect. On 6-5-1959 the plaintiff's mother settled her property at No. 1, Shanmuga Mudal Street Royapettah, Madras, on the plaintiff absolutely under a settlement deed. The first defendant represented that there was an attractive property at Gandhinagar, viz, the suit property, which had been allotted to one Pundarikshakha Naidu by the Madras Co-Operative House Construction Society Ltd and that the transfer of the same could be got in plaintiff's favour if she could pay Rs. 15,000/- to the said Naidu and Rs. 14,900/- to the said Society. The first defendant further persuaded the plaintiff to borrow a sum of Rs. 20,000; - on mortgaging the property at No. 1, Shannniga Mudall Street, Royapettah, Madras, to the Purasa-walkara Saswatha Sangha Nidhi and thus she executed a mortgage deed on 24-6-1959. A sum of Rs. 2,001/- was paid by cash to the said Naidu and subsequently a cheque for Rs. 12,999/- was issued by the plaintiff in his favour. There was some litigation between the said Naidu and the plaintiff, which was ultimately compromised. As per the compromise she paid the balance amount to the society. As a result of such payment, the plaintiff became a member of the society and entered into a hire purchase agreement with the society on 19-4-1961. As per the agreement, she was to get a conveyance executed in her favour or in favour of her nominee by the said society, which is now represented by the second defendant. 3. After payment of Rs. 45,030-82 in full discharge of all her liabilities under the hire purchase agreement to the society, she became entitled to a conveyance. The entire consideration was met from her own earnings and those of her children. The plaintiff had been residing in the suit premises from 196! along with her children and the first defendant. Subsequently the first defendant's father-in-iaw brought the first defendant's wife and children to the suit premises and out of compassion, the plaintiff did not object to it. The first defendant had conceived a fraudulent intention to somehow obtain the transfer of the

suit property in his name with a view to appropriate it for himself exclusively. The plaintiff learnt later that with this end in view, he had made an application even as early as May 1971 to the Corporation of Madras for mutation of the suit property in his name in the assessment register, in which the property was standing in the name of the plaintiff. The plaintiff had paid the property tax all along and is even now continuing to pay the same. The first defendant appears to have obtained ihe plaintiff's signature to a letter or used a blank paper signed by her for a request to the second respondent to execute a sale deed in respect of the suit property in favour of the first defendant as her nominee without her knowledge. It appears that the said request letter is dated 12-7-1971. On the same day D. 1 obtained a conveyance in his favour from the second defendant. It appears also that the sale deed was presented before the Registrar on 12-7-1971 and registered on 19-7-1971. The plaintiff became aware of the above fraudulent acts of the first defendant only towards the end of 1972, when she observed some person calling at the plaintiff's residence on two occasions and being closeted with the first defendant. On the last occasion when the said person came, from the manner in which he was talking to the first defendant, the plaintiff understood that he was a money lender and that he came to make a demand for payment towards loan. She enquired with the first defendant, but the latter gave an evasive reply. This aroused her suspicion that he would have borrowed money by mortgaging the suit property and started enquiring the second defendant to find out whether there was any encumbrance on the suit property. In January 1973 she was surprised and shocked to learn from the second defendant that a conveyance deed had been executed in favour of the first defendant on the strength of an authorisation by her. On 1-2-1972 the plaintiff made an application for a copy of the conveyance and thus became aware of the fraud committed by the first defendant. This caused estrangement between the first defendant and the plaintiff. 4. She also applied for an encumbrance certificate and came to know that the suit property was mortgaged with defendants 3 and 4 under three separate documents for an aggregate sum of Rs.40.000/- She also obtained registration copies of those deeds and found that they contained several false recitals, particularly the recital that the superstructure in the suit property had been put up by the first defendant out of his own funds. There was no necessity to borrow money, inasmuch as the plaintiff had been giving funds to the first defendant from time to lime and she had also the sale proceeds of ihe plaintiff's house at No. 1, Shanmuga Mudali Street, Royapettah, Madras, which was sold by her on 12-7-1967 for a sum of Rs. 50,000/-. 5. As per the plaint averments, the first defendant was also collecting rents from the shops and outhouses in the suit property and retaining them. Becoming aware of the acts of fraud of the first defendant, the plaintiff sought the help of one Dr. M. Sanihosham, her family doctor in the beginning of 1974, to persuade the first defendant to set right the matters. The said doctor had a discussion with the first defendant in the plaintiff's presence in the suit house and the first defendant told him that he would set right the matters within 3 or 4 months. However, the first defendant failed to keep up his words. 6. Defendants 2 to 4 have not acted in good faith since the recitals in the mortgage deeds show that the entire consideration for the property had been paid by the plaintiff in full discharge of her liabilities and obligations under the hire purchase agreement dated 19-41961. There was also a marble slab embedded in one of the gate pillars of the suit property only with her name on it. There was another marble slab bearing the name of her daughter. Padma. She accordingly prayed for the following reliefs:(a) declaring the plaintiff as the owner of the suit property; (b) granting a permanent injunction restraining defendants 1,3 and 4 from interfering in any manner with the ownership, possession and enjoyment of the property by the plaintiff and defendants 3 and 4 from exercising any right under the deeds of mortgage in their favour; (c) directing the first defendant to account to the plaintiff for all rental collections made by him in respect of the suit property after the date of the plaint; (d) declaring the first defendant not entitled to remain in the suit premises along with his family and directing him to quit the premises along with his family members; and (e) for costs of the suit, 7. The main contesting defendant is the first defendant and his case is as follows :--The plaint does not disclose any cause of action as against the first defendant. He denied that the plaintiff is the absolute owner of the suit property or that she paid the money due to the society from out of her own funds. The plaintiff has not been residing in the suit house for the past two years and has been residing at No. 4. Halaraman Street. Adyai. The property was conveyed to him by the second defendant under a registered sale deed dated

12-7-1971 with the consent and upon the direction of the plaintiff. The plaintiff voluntarily desired the propeity should be registered in the first defendant's name as the lawful owner. The plaintiff's sons marriages were celebrated in the suit property, after such transfer and the first defendant had met all the marriage expenses. The estrangement started between the plaintiff and the first defendant when the first defendant insisted that the plaintiff's daughter should marry and lead a respectable life. 8. The plaintiff does not plead 11011 east factum. No allegation such as undue influence misrepresentation, pressure or coercion on the part of the first defendant was alleged, continues the first defendant. No actual positive act of fraud is alleged. The plaintiff does not come forward to deny having signed the letter dated 12-7-1971. or sending it to the second defendant, nor is it complained that it is a forgery. She does not also any where state that she executed the transfer unwillingly or out of fear or out of fear of unpleasant consequences. The plaintiff had not impugned it at any time by any notice even after the alleged discovery of fraud, until the dale of suit. She had by her conduct elected to unequivocally affirnv and ratify it. The document, in the circumstances, is a valid one until it is set aside. 9. Immediately alter the sale in his favour the first defendant had borrowed from defendants 3 and 4 a sum of Rs. 40,000 - under three different mortgage deeds over the suit property, to the knowledge of the plaintiff for constructing a few shops in the front. The plaintiff never objected thereto. Those shops did not spring up overnight, but took considerable time to be completed. She was fully aware that the shops were with the funds borrowed by mortgaging the suit property. She stood by and allowed the first defendant to construct the said shops at a huge cost of over Rs. 40,000. - without any protest whatsoever. The plaintiff is estopped from questioning the conveyance of the suit property in his favour. Before the conveyance of the property to the first defendant, the suit property did not fetch any income by way of rents. Only after construction of shops with borrowed monies, the property started yielding rents; such rents were hardly sufficient to pay interest due on the mortgages. The plaintiff is not entitled to the rents from the shops and outhouses and cannot seek an account from this defendant. In any event, the plaintiff must pay the defendant compensation for the improvements effected on the property, which the 1st defendant estimated at a lakh of rupees. The property bearing No. 1, Shan-muga Mudali Street, Royapettah. Madras, was purchased in the name of plaintiff's mother with the funds of the first defendant and improvements were effected by him. The first defendant denied that the plaintiff and her children had sizable earnings as musicians and artistes. The plaintiff and her mother came under this defendant's protection in or about 1952 and at that time the first defendant was a bachelor. The first defendant succumbed to plaintiff's amorous approaches and her mother's machinations. The plaintiff was under his protection till about 1960. On account of his association with the plaintiff, the first defendant, incurred displeasure of his employer, the proprietor of Kamadhenu Theatre, and that of his wite, whom he married in 1954, who, left for her parent's house. It is true that the plaintiff's mother settled her property at No, 1, Shanmuga Mudali Street, Royapettah, Madras, on the plaintiff, just before her death. The name of the plaintiff was entered in the registers of the second defendant as a nominee of the first defendant as per the desire and with the knowledge of the plain tiff. The en tire amount for the allotment of the property was paid by the first defendnt and not by the plaintiff. The plaintiff voluntarily gave the letter of transfer of name in the registers of the society and requested the society that the sale deed may be effected in the name of the first defendant. The plaintiff is now instigated by some interested persons to undo, if possible, what was lawfully and justly done. The plaintiff was equally aware of all the transactions and the mutation of the name in the Revenue and Corporation registers, as and when they took place and that the so-called enquiry was only to explain the delay in filing the suit. 10. As regards the borrowings made from defendants 3 and 4, the first defendant had every right to make such dealings as he was the absolute owner of the property. He also denied the other allegations. 11. The case of defendants 3 and 4 is as follows:-These defendants were not aware of the exact nature of the relationship between the plaintiff and the first defendant. These defendants were not at all aware of the alleged sizable earnings of the plaintiff. The plaintiff became a member of the Madras Co-operative House Construction Society Limited, only at the instance of the first defendant, and for his own benefit. The plaintiff's name was used as a benami as the first defendant himself had arranged to pay the money out of his own income. Such benami entry was made in the registers of the society in view of the close relations which existed between the plaintiff and the first defendant. The fraudulent intention of the first defendant as alleged by the plaintiff is only made for the purpose of the suit. The transfer of the suit property in favour of the first defendant made by the second defendant society, was effected openly with the plaintiff's full knowledge and consent. The allegations that the 1st defendant took advantage of the plaintiff's ignorance and implicit confidence in him are made only to cloud the issue.

The property stands duly registered in the 1st defendant's name in the office of the Corporation of Madras. The father of these defendants, at the request of the first defendant, inspected the suit property more than once and had occasion to meet the plaintiff living in his house, when terms of loan were discussed with the first defendant. At those times, the plaintiff never questioned the first defendant's right to mortgage the house and to raise loans thereon nor did she assert any right in herself. She was also aware of the fact that the money which was being lent was for the purpose of putting up shops in the suit property. These defendants acted in good faith and there was nothing suspicious nor was there any other circumstance putting these defendants on notice of any claim that may possibly be set by the plaintiff. They also denied the other allegations made by the plaintiff. Accordingly, all defendants prayed that the suit should be dismissed. 12. From the above pleadings, the following issues were framed for trial:-(1) Is the plaintiff the sole and absolute owner of the suit property and the 1st defendant only a benamidar as claimed by her? (2) Did the 1st defendant obtain the transfer of the suit property in his name in the manner contended by the plaintiff? (3) Did the 1st defendnat find the consideration for the purchase of the suit properly as contended by him in paragraph 19 of his written statement? (4) Is the suit not maintainable as contended by the 1st defend am in paragraph? of his written statement? (5) Is the plaintiff aware of the execution of the the mortgages by the 1st defendant in favour of defendants 3 and 4. If so, is the plaintiff disentitled on that account from questioning the said mortgages? (6) Are the mortgages executed by the 1st defendant in favour of the 3rd and 4th defendants binding on the plaintiff? (7) Is the plaintiff in possession of the suit property? (8) Is the plaintiff entitled to the reliefs of injunction and declaration against defendants 1, 3 and 4 as prayed for in the suit? (9) Is the 1st defendant liable to account to the plaintiff for all rental collections from the suit property from the date of the plaint? (10) Is the second defendant not a necessary or proper party to the suit? (11) To what reliefs are the parties entitled? Additional Issue:-(12)ln any event, is the plaimiff liable to pay compensation for the improvement; effected? The plaintiff examined herself as I.W. 1 and also examined eight other witnesses and filed documents marked as Fxs. P.I to P.107. The first defendant examined himself and produced documents marked as F.xs. Dl and D32. Defendants 3 and 4 examined their father us D.W.2. 13. The trial Judge, after perusing the evidence adduced and hearing both parties, answered Issues 1,3,5,6 and 8 to 10 in favour of the plaintiff. Issues 2 and 4 against the 1st defendant, and Issue No; 12 in favour of the 1st defendant and did not give any finding on Issue No. 7. Accordingly decree is given : (a) declaring the plaintiff as the owner of the suit proeprty and that the mortgages executed by the 1st defendant in favour of defendants 3 and 4 are not binding on the plaintiff: (b) directing the first defendant and members of his family to deliver possession of the surt property to the plaintiff on or before 25-11-1979; (c) restraining defendants 1. 3 and 4 by way of permanent injunction from interfering in any manner with the ownership, possession and enjoyment of the suit property by the plaintiff and also from exercising am right under the deeds of mortgages; (d) directing the plaintiff to pay to the first defendant a sum of Rs. 40.000 - towards improvement with interest at 12% per annum from 22-8-1974 till date of perfect payment, by creating a charge on the suit property for the said payment; (c) declaring the first defendant not liable to render accounts to the plaintiff for the rental collections; (f) discharging the first defendant appointed as Receiver, subject to his filing final accounts and passing of the same; (g) declaring the plaintiff to be entitled to the amounts collected by the Receiver from the suit property, subject to the Receiver's remuneration and other amounts payable to him and (h)

ordering the defendants to pay costs of the suit to the plaintiff. Aggrieved by that judgment and decree dated 25-4-1979, the first defendant (since dead) has preferred O.S. A. No. 77 of 1979 and defendants 3 and 4 have preferred O.S. A. No. 74 of 1979. 14. Learned counsel for the appellants con tended that the doctrine of no nest fact um did not have application to the facts of the case, that the plea of undue influence was not properly pleaded and proved, that the trial Judge has shifted wrongly the burden of proof on the defendants, that there was no specific plea of fraud, that the finding of the trial Judge that the suit property was purchased exclusively with the money of the plaintiff was not sustainable and that more particularly the Judge has taken into account evidence con trary to the pleas. 15. Learned counsel appearing for the plaintiff 1st respondent contended that in the circumstances of the case the relation 6f active confidence justified the presumption of undue influence, that there were certain admissions by the first defendant in public documents which were fatal to his case, that defendants 2 and 3 cannot have better title than the first defendant and that they were in addition lacking bona tides. 16. As far as the plea of nonest factum is concerned, learned counsel for the first defendant contended that this doctrine dose not apply where the case is that the plaintiff has signed a blank paper. He pointed out that the essence of the doctrine is that there should be misrepresentation as, to the contents and nature of the documents. He further added that the defence of nonest factum was available only in respect of documents which as signed imposed some liability to the signatory and not to documents signed in blank. In support of his above argument, he placed before us the following authorities: "One case which deserves special mention is that of a document signed blank, which is intended by the signatory to be an offer, and the signatory hands over the signed document to another to fill in the details, but details are inserted which are not in accordance with the instructions of the signatory, and the docu- ment is then preferred to a third person for his acceptance."(Halsbury's Laws of England Volume 9, page 171. para 295] "I do not understand how in such a case any question of non est factum can arise, 1 agree with Person, L. J. that in the present case there is no evidence that Phelan represented either by words or conduct that the defendant was signing documents which related to a mortgage transaction," (Mercantile Credit Co. Ltd. v. Hamblin. 1964) 3 AT.R 592: "The plea of non est factum can only rarely be established by a person of full capacity and although it is not confined to the blind and illiterate, any extension of the scope of the plea would be kept within the narrow limits and that in particular it is unlikely that the plea would be available to a person who signed the document without informing him-self of its meaning." Placing full reliance on the above propositions, learned counsel for the first defendant appellant argued that in the present case the clear stand of the plaintiff is that she signed either on a blank paper or on none other written paper the contents of which were unknown to her. Such being the plea, it was added, there is no room for the plea of non est factum. 17. In fact, the plaintiff did not invoke the doctrine of non est factum nor the learned counsel for the plaintiff placed his argument on such a plea. It is the first defendant who in his written statement ventured to say that the ease is not one covered by the plea of non est facium. The trial Judge has also not rendered a finding against the plaintiff on the basis of that doctrine. Therefore, it is not necessary in this case to consider this point. 18. Therefore, the points which arise for our consideration in this case arc as follows: (a) Whether there was undue influence by the first defendant on the plaintiff? (b) Whether there was fraud played by the first defendant on the plaintiff? (c) Whether the sale consideration was paid by the plaintiff or the first defendant exclusively? (d) To what relief the parties are entitled? 19. Point No. I : - The case of the learned counsel for the plaintiff is that the rule in Section 111 of the Evidence Act was different from the one embodied in Section 16(3) of the Contract Act, that it applied to a variety of relations, whenever it is shown that there was a possibility of exercise of dominion and influence by one party on the other and that In

such cases there will be a presumption of undue influence and the burden of proving the contrary would lie on the stronger party. In support of this stand, the learned counsel placed before the Court the following propositions with the corresponding auth-orities:-"The onus is on the party in whom confidence is reposed to show that the party to whom he owed the duty in fact acted voluntarily, in the sense that he was free to make an independent and informed estimate of the expediency of the contract or other transaction." (Cheshire and Fifoot's Law of Contract Tenth Edition page 279, under the head duress and undue influence) The presumption applies to substantial gifts or benefits provided by an intended wife for her intended husband and this is so even if she is no longer young." (Snell's Principles of equity 28th Edition page 541; under the head (Fraud): "Where the relations between the doner and the donee have at or shortly before the execution of the gift been such as to raise the presumption that he had influence over the donor. In such a case the court will set aside the voluntary gift unless it is proved that in fact the gift was the spontaneous act of the donor acting under circumstances which enable him to exercise an independent will and which justifies the court in holding that the gift was the result of free exercise of the doner's wish." (Inche Noriah v. Shaik Alii, 1929 MWN 105 : AIR 1929 PC 3. The relation of paramour and mistress may be one of the cases where the possibility of exercising influence exists from confidence created or established. In such cases, when a person obtains any benefit from another by exercising his influence which, in the opinion of the Court, prevents the grantor from exercising an independent judgment in the matter, the Court can set aside the contract or recover the gift. (Shivgangawa v. Basangouda, MANU/MH/0122/1937 : AIR1938Bom304 . Where a wife is clearly under the influence of her husband owing to her youth, compara tive illiteracy 'and lack of intelligence and executes a document for the benefit of her husband' there 'is a presumption that under these circumstances such document is null and void." (Tungabai Pui;ushottam v. Yeshwant Dunkar (1945) 1 LR Bom 189 ;.A!R J945, PC 8 "In such transactions as those involving'a 'deed of arrangement or settlement (as distinct from an extravagant gift of a ring) made between an engaged couple, where the transaction appears on its face to be much more favourable to one party than to the other, the court may, in the circumstances of the case, find that a fiduciary relationship existed such as to cast an onus on the party benefited to prove, if [he transaction^ to stand, that it w as completed by the other party after full, free and informed thought about it." (Zamet v. Hyman, 1961 (3) AER 933' "A minor who is under the influence of his de facto guardian during his-minority cannot be expected to come out of that influence merely on attaining majority Or within a short time thereafter. Where there is question of good faith of a transaction between the parties one of whom stands to the other in a position of active confidence, the burden of proving the good faith of the transaction is on the party who is in a position of active confidence." (Pannalal v. Dilip Kumar, MANU/WB/0078/1977 : AIR1977Cal297 ) "Any relationship in which one party enjoys the active confidence of another party who is to lean on him and is inclined to repose implicit confidence in him is enough to approximate to the kind of relationship which may attract the provisions of S. 111 of the Evidence Act with regard to the rule of burden of proof." (Daya Shankarv. Bachi, MANU/UP/0307/1982 : AIR1982All376 ). 20. Learned counsel for the first defendant on his side first contended that undue influence should be specifically pleaded, that without a specific plea no finding of undue influence can be given and that therefore in this case the plaintiff who failed to" plead undue influence cannot pray the Court to extend to him the benefit arising out of undue influence. He placed before the Court in support of his contention the following propositions with corresponding decisions:

"Though pleas of undue influence and coercion may overlap in part in some eases they are separable categories in law and must be separately pleaded. In cases of fraud, undue influence and coercion, the parties pleading it must set forth full particulars and the case can only be decided on the particulars as laid. There can be no departure from them in evidence." (Bishundeo v. Sheogeni Rai, MANU/SC/0059/1951 : [1951]2SCR548 ) "A plea of undue influence must be precise and all necessry particulars in support of that plea must be embodied in the pleading." (Ladli Prasad Jaiswal v. Karnal Distillery Co. Ltd;, MANU/SC/0061/1962 : [1964]1SCR270 ) 21. Learned counsel for the first defendant then contended that the plea of undue influence does not arise whenever there is some relationship between the parties. In this connection, he placed before the Court the following propositions and the correspondent authorities:-"To hold a contract as vitiated by undue influence two conditions must be satisfied. Firstly the relationship subsisting between the parties must be such that one party is in a position to dominate the will of the other and secondly, that the person so placed should have used that position to obtain an unfair advantage over the other." On the application of this principle, it was held on facts that the gift deeds executed by the lady were made voluntarily having fully understood the implications of the transactions being a person of strength of will and business mind and not one unfamiliar with the business ways or could be easily led aw ay (Sattemma v. Subbi Reddy, MANU/AP/0078/1963 : AIR1963AP72 ). "The court trying a case of undue influence must consider two things to start with, namely, (1) are the relations between the donor and the donee such that the donee is in a position to dominate the w ill of the donor, and (2) has the donee used that position' to obtain an unfair advantage over the donor? Upon the determination of these issues a third point emerges, which is that of the onus probandi. If the transaction appears to be unconscionable, then the burden of proving that the contract was not induced by undue influence is to lie upon the person w;ho wa,s in a position to dominate the will of the other." (Subhas Chandrav. Ganga Prosad, MANU/SC/0069/1966 : [1967]1SCR331 ). 22. Lastly, the learned counsel for the first defendant contended that undue influence, as contemplated under Section 16 of the Contract Act, would not apply when the relationship is that of husband and wife and placed reliance on the following decisions: (1) Howes v. Bishop 1909 (2) KB 390; (2)Zamet v. Hyman 1961 (3) All ER 933; (3) Ladli Parshad v. Karnal Distillery Co.. MANU/SC/0061/1962 : [1964]1SCR270 ; (4) Shivgarigawa : v. Basangouda (AIR 1938 Bom 304). 23. Turning back to the facts of the case, we have first to take note of the fact that undue influence was not pleaded at all by the plaintiff, that she pleaded instead fraud. It is the first defendant, who in his written statement, has contended that the transaction was not vitiated by undue influence. Secondly, undue influence would in normal circumstances presuppose some knowledge of the transaction by the influenced person. She would have been aware of what happened and given her consent; that consent would be vitiated by undue influence and would not be a real consent as required by law, for various reasons like lack of information, impossibility to resist, non-avaiiability of independent advice, etc. In the present case, the first defendant and the plaintiff have been living as husband and wife and their relations were excellent. The plaintiff is not a house-wife confined to her house. She is an artist musician and film actress. She was first married to another person and has left him to come and live with the first defendant. Though she said that she had abandoned the entirety of the administration of the business of the family in the hands of the first defendant she did not come forward to say that she had to accept whatever the first defendant said. On the contrary she was perfectly able to understand what is what. As per her own averment, when the property was to be purchased she had to be pursuaded with adequate reasons. The steps she has taken in respect of the transaction, viz. once she has decided to jump into action, in this matter, shows that she is capable of understanding the nature of the transactions and resisting the first defendant if need be. Her case was clearly that she was not aware on the transaction at all and that the signature was obtained from, her without her being informed of the nature of the transaction and it is for that reason that she pleaded fraud. We have, therefore, to conclude that this is not a case of undue influence in which the principles of S. 111of 'the Evidence Act would apply.

24. In the result, the first point is answered in the negative. 25. Point No. 2:-- As far as fraud is concerned, a specific plea was taken in the plaint. In paragraph 12 of the plaint it is stated that after the plaintiff and the first defendant came to live in the suit premises, the latter had evidently conceived a fraudulent intention of somehow obtaining a transfer of the suit property in his name with a view to appropriate it for himself as it now transpires. Later in the same paragraph it is stated as follows: "Since 1st defendant was attending to all the plaintiff's affairs, as stated in paragraph 7 above the plaintiff has now come to believe that he must have taken advantage of her ignorance and implicit confidence in him either to get her signature in an application for transfer or used a blank paper signed by her for that purpose." This allegation is in respect of an application made in May 1971 to the Corporation of Madras for transfer of the suit property in his name in the Property Tax Register in which the property had stood in the name of the plaintiff. The plaintiff states further in paragraph 13 of the plaint' as follows: "In the same manner the 1st defen dant appears to have obtained the plaintiff's signature to a letter or used a blank paper signed by her for a letter requesting the 2nd defendant to execute a sale deed in respect of the suit property in favour of the 1st defen dant as plaintiff's nominee without her know - ledge. 26. The case of the first defendant was that fraud is not a matter of presumption, that no positive act of fraud was alleged and that the allegations made in the plaint were bereft of the essential particulars. Learned counsel for the first defendant reiterated his objections very strongly raised at the time of arguments before the trial Judge. He particularly relied on the following decisions: Bishundeo Narain v. Seogeni Rai, MANU/SC/0059/1951 : [1951]2SCR548 ; Bira Jena v. Tauli Dei. MANU/OR/0043/1972 : AIR1972Ori143 and Union of India v. Pandu-rang Kashinath More. MANU/SC/0396/1961 : (1961)IILLJ427SC . His case was that in case of fraud; the plaint should set forth full particulars, that the case can be decided only on the particulars as placed, that general allegations are not sufficient even to amount to an averment of fraud, that when particulars of fraud are not pleaded no evidence should be allowed on the matter of fraud and that if allowed it would be inadmissible and no finding can be based thereupon. This argument was rejected by the learned single Judge. He particularly observed that in the circumstances of the case where both parties were living as husband and wife and the plaintiff reposed full confidence on the first defendant it would be totally unjust to non suit the plaintiff merely on the ground that the particulars of fraud were not described in detail in the plaint. 27. From the plaint allegation that the signature on Ext. A-2 could have been ob- (tained in a routine manner without her being put on notice about the nature of the docu- ment, it is clear that she is not able to say as to how she happened to affix signature on Ex.D- 2. It is even alleged that it was usual for her to affix signature on many documents without enquiring or without knowing the contents thereof. The plaintiff has gone to the extent of saying that she used to sign on blank papers. In such a case and taking into account the relation between the parties, we cannot apply the ratio embodied in the judgments relied on by the learned counsel for the first defendant. We have to ascertain from the circumstances of the case whet her the plea, however, vague it may be, as put forth by the plaintiffs has any "truth in it. 27A. In her evidence, the plaintiff has come forward to say that she would have affixed her signature on Ex.B-2 probably on the day when her daughter was, about to proceed for a programme in the year. 1971 since at that time, according to her the first defendant brought some papers and asked her to sign, them. As she was in a hurry to proceed to her daughter's programme, she simply signed all those papers. Apart from the above details, she was not able to say anything else nor was she able to remember the date. This would however, suggest that she was not used to sign papers without ascertaining the con- tents as a matter of course. Hut she happened to do so in certain exceptional circumstances like the one referred to by herself. In this background, we have to find out the truth in respect of the plea taken by the plaintiff and, so doubt the burden, is upon her. 28. In this case we have got her own sworn statement which is neutralised by the sworn statement of the first defendant. Learned single Judge however came to the conclusion that there was fraud in scrutinising very minutely the evidence of the first defendant in the course of his cross-examination regarding all that he had done on the day he took the signature and had the name changed in his favour upon the letter of request to that effect from the plaintiff. No doubt the first defendant was not able to satisfactorily answer regarding his whereabouts and his acti- vities on that day. But that will not clinch the issue especially when the burden is on the plaintiff to prove the case. When w e scrutinise closely the statements and depositions of the plaintiff, we find the following facts: In the statement (plaint) in paragraph 15 she says are follows: "Towards the end of 1972 the plaintiff observed some person calling at the plaintiff's residence on two or three occasions and being closeted with the first defendant. On the last occasion when the said person came, from the manner in which he was talking to the 1st defendant, plaintiff suspected that he was a money lender and had come to make a demand for payment towards loan. She

thereupon made enquiries with the 1st defendant who gave evasive replies. This aroused her suspicion that he had probably borrowed on the security of the suit property and she therefore made enquiries in the office of the 2nd defendant society to find out whether there was any encumbrance on the property". This would show that at the first instance she had some doubt about the plaintiff, she was aware that the property was already transferred in his name, because what she suspected was that he has borrowed on the security of the suit property which he could not have done, if the property continued to stand in her name. Secondly when she goes 10 the second defendant Society, it is not- to ascertain in whose name the property stands, but to ascertain whether there was any encumbrance on the property, which again would show that she was already aware that the property stood in the name of her husband and therefore, her signature for transfer was not obtained without her know ledge, as contended now. But in her evidence in pages 15 and 16 she would state as follows:-- "After my eldest son's marriage the first defendant shifted to the outhouse from the main building. I overheard the first defendant talking with some other persons about some arrangements over the property. 1 got suspicion immediately and met the first defendant and made enquiries. He told me that he was doing everything for my benefit only. However 1 had suspicion and went to the society and enquired from the society". It is found that she makes (sic) in her evidence a devia- lion from her statement in the plaint, having probabh realised that her statement in the plaint, (having probably realised that has statement in the plaint) has disclosed truth against her will and that it would be a damage to her stand. But the truth has come out again in the evidence at the later stage in page 39 where she deposed; on the same day, I was overhearing the talk between the first defendant and two strangers about some transaction about the loan. 1 got suspicious and enquired the first defendant as to the transactions talked about himself and the said strangers. He said, it is none of your concern. I need not worry. Then. 1 asked him, you assured me to have the document transferred in my name. He said, he will do it in due course. "This statement makes it clear that when she started entertaining suspicion, she was aware that the transfer was already made in the name of the first defendant and that what she was expecting was only re-transfer of the property in her name. This again makes clear that she affixed her signature on Ex.;D-2 to execute the sale deed in the name of the first defendant with full awareness, for reasons 'better known to herself and on account of some understanding between the plaintiff and the first defendant, the plaintiff has signed Ex.D-2 with full knowledge of its content. Since no specific act of fraud, except absence of knowledge, has been alleged and since that she is found to have had full knowledge, her plea of fraud has necessarily to fail. 29. In the result, this point is answered in the nagative. 30. Point No. 3 :-- This point arises out of an alternate plea taken by the plaintiff. In fact, she stated that in case the court was not inclined to the view that the latter requesting the 2nd defendant to execute the sale deed in favour of the first defendant as her nominee was not obtained by fraud, the plaintiff would in any event be entitled to a declaration that she was the owner of the property since she had paid the entire consideration and the first defendant, if at all would be only a benamidar for her, the beneficial ownership remaining vested in her. The first defendant on his side has also stated in his written statement that from the very beginning of the contract with the Gandhi Nagar Co-operative House Construction Society the whole money for the purchase of the suit property was paid by him. 31. It is to be noted that the present plea of the plaintiff is somewhat inconsistent with the plea of fraud. If there is no fraud, as it has been held the plaintiff should have stated why she has consented for the transfer and for what reason the first defendant has been made a benamidar. The first defendant, who took a symmetrical plea, has come forward to ex plain that the property belonged to one Pundarikaksha Naidu, who was a close reta lion of his, that the said relation approached him for a loan to discharge the dues to the society or to have a transfer of the property in his name; that he having then pleaded in ability felt it delicate to have thereafter transfer of the property in his name when the society put pressure on Pundarikaksha Naidu and that therefore he had the transfer for Pundarikaksha Naidu effected in the name of the plaintiff as his benamidar. This is the back ground in which this issue comes for examina tion. 32. At the outset the learned counsel for the first defendant pleaded that there was variation between the statements in the plaint and the depositions in the course of evidence by the plaintiff. He pointed out that in the plaint it is stated that the plaintiff paid Rs. 2001 to pundarikaksha Naidu on 20-4-1959, that she issued a cheque for Rs. 12,999 -. (admittedly not encashed), that thereafter she paid another amount of Rs. 14,936.66 and a further sum of Rs. 20,000 - to the second defendant Society by way of instalments and that she paid all the taxes. But in her evidence she changed the case saying that she did not pay these amounts, that the first defendant effected factually the payments and that the payments were made out of her fund. Learned counsel for the first defendant contended that the plaintiff is not entitled to change her stand in such a manner and that therefore it is to be held that she has not proved her case and the suit should be dismissed. In support of

his contention, he placed reliance on the deci-sions. First is the one rendered by the Andhra Pradesh High Court in A. Gangadhara Rao v. G. Gangarao, MANU/AP/0117/1968 : AIR1968AP291 where it was held as follows (Para 7):-"It is, trite to say that a party is expected and is bound to prove the case as alleged by him, and as covered by the issue framed. This is in accordance with the main principle of practice that a parly can only succeed according to what was alleged and proved secundum alle-gata at probata. He should not be allowed to succeed on a cause which he has failed to set up. He should not be permitted to change his case or set up a case which is inconsistent with what he had himself alleged in his pleading except by way of amendment of the plaint." Second is the one by the Supreme Court in Vinod Kumar v. Surjit MANU/SC/0827/1987 : [1987]3SCR552 where it was held as follows: (Para 11) Kaur,

"The pleadings of the parties form the foundation of their case and it is not open to them to give up the case set out in the pleadings and propound a new and different case." It is true that the plaintiff has shifted the case as pointed out by the learned counsel for the first defendant. After having said in the plaint she has paid all the money, she turned to say in the evidence that all payments not only in respect of this property but also in respect of other transactions and family affairs were made by the first defendant, but that all those payments were made only out of her fund. 33. In this particular case, we cannot Overlook the fact that the parties have been living as husband and wife and that in case of Such situation it is not uncommon to find husband effecting actually the operations on behalf of his wife with the money belonging to the hitler. Therefore, we do not think that in this ease it is proper to discard the direct evidence of the plaintiff on this technical ground and reject her case on that ground. However, we have to bear in mind that the first defendant was somehow prejudicied in the trial by the fact that the plaintiff took a stand in the plaint and changed her course in the trial stage. 34. On the other side, the learned counsel for the plaintiff very vehemently contended that the plea that he paid the consideration for the purchase of the suit property was not at all open and available to the first defendant, because in the sale deed. Ex. P-86. executed on 12-7-1971 by the Society in the name of the first defendant on the strength of Ex. D-2 and also in the mortgage deeds executed by the first defendant to various parties in succession, viz. Ex. P-50, P-51 and P-52 dated respectively 22-12-1971, 5-6-1972 and 20-3-1972, there is a clear recital to the effect that the entire consideration has been paid by the plaintiff. He contended that these documents contained an unequivocal admission by the first defendant that the entire consideration was paid by the plaintiff and therefore it was not necessary even to look at the other pieces of evidence to decide the controversy. It is true that in the sale deed, Ex. P-S6. there is a recital as follows: "Whereas Smt. M. K. Lakshmi member No. 2174 from 19-4-1961 T. S. Krishnaswamy Hony, Secretary the Gandhinagar Co-operative House Construction Society Ltd., XNC 494 (Seal) The Gandhinagar Co-operative House Construction Society Ltd., ENC Madras-20 has observed, performed and satisfied the said terms covenants conditions and by laws and paid to the vendor in the aggregate the sum of Rs. 45,030.82 (Rs. forty five thousand thirty and paise eighty two only) in full discharge of all her liabilities and obligations to the vendor under the said Indenture of Hire Purchase and whereas the Chairman State Housing Board (Co-op, wing) Madras-35 has released the property from Government Mortgage in his D. No, 8119/79 G. dated 4-7-1971. Whereas by the letter dated 12-7-1971 Smt. M, K. Lakshmi the member has requested the vendor society to execute the sale deed in favour of her husband Sri C. K. Deenadayalu the purchaser aforesaid as her nominee in terms of the aforesaid Hire Purchase Agreement......" 35. Learned counsel for the first defendant contended that if the statement contained that the documents are to be considered as an admission then the whole statement should be laken into account and therefore the statement that the plaintiff requested the vendor society to execute the sale deed in favour of her husband should not be a matter of dispute. In this connection, learned counsel reiied on a decision of the Supreme Court in Hanumant v. State of M. P., MANU/SC/0037/1952 : 1953CriLJ129 where it has been held as follows:-(Para 23) "An admission made by a person whether amounting to a confession or not cannot be split up and part of it used against him. An admission must be used either as a whole or not at all." Even without going to that extent, it is to he noted that the recitals in Exs. P-50 to P-52, mortgage deeds, are merely the reproduction of the recital found in Ex. P-86, sale deed. The sale deed reciles all the operations relating to the sale of the property. It is quite

natural that in the sale deed executed by the Society there is a mention that the money was paid by the Plaintiff, since the contract was in her name, even though factually the payment was made by the first defendant. Therefore, this recital in Ex. P-86 is not a decisive proof that the money, which was used for the payment to the society, belonged exclusively to the plaintiff. If there was any document between the plaintiff and the first defendant in which the first defendant admitted that she has paid the money for the transaction such document would certainly exclude the possibility of oral evidence to the contrary. It is not so in this case. Therefore, this contention of the learned counsel for the plaintiff cannot be accepted. 36. As far as this point is concerned, the trial court has shifted entirely the burden of proof on the first defendant on the consideration that the plea of benamidar taken by the plaintiff was only an alternate one. We do not see any reason for such a course. The plaintiff having taken the plea of benami has first to discharge her burden and the same will shift on the first defendant only upon the plaintiff proving her case to a certain extent. 37. We shall now proceed to analyse the evidence adduced by both the parties as far as the point is concerned. The case of the first defendant is that he paid all the money and the plaintiff, who stated that the money was paid by her, has admilted that factual pay- ment was effected by the first defendant, but that the money belonged to her. In this connection, each party has adduced evidence in respect of their sources of income. The plaintiff examined nine witnesses including herself and exhibited documents, Exs. P-l to P-107. The first defendant examined himself a D.W. 1 and defendants 3 and 4 examined their father as D.W. 2 and on the side of the defendants 32 documents were exhibited. The total amount paid was R.s. 45.030.82. The parties have been living together amicably as husband and wife from 1959 to 1971. Ex. D-2. transfer letter, executed by the plaintiff in favour of the first defendant and Ex. P-6,sale deed, executed by the Society in favour of the first defendant, took place in the year 1971 when they were so living. 38. As per the evidence of the plaintiff. P.W. 1 was a musician and her children, P.Ws. 3 and 4. were cine artistes, who have acted in several films. P.W. I was musician popular to some extent, as would be described by the trial Judge, and she acted in some films. The plaintiff's daughter also gave several dance performances. The plaintiff was also getting rents from the house bearing door No. 1, Shanmugha Mudali Street. Royapat-tah, from 19-4-1961. when she moved to the suit property, till 18-6-1967 when the said Royapettah property was sold. But, as far as the amount realised by the plaintiff and her children, there is no clear and convincing evidence. 39. On his side, the first defendant has produced evidence to show that he w as assisting his friend in Calcutta in securing artistes for dance performance and music recital there, that he was having the Kulachara milk trade, touring cinemas, morning shows held in Kamadhenu theatre, decoration work ill the said theatre, that he was sending talkies to foreign places and that he was also the Manager of Kamadhenu theatre, Mylapore, Further, he was having a rental income from the property bearing door No, 94, T.S.V, Koil Street, Mylapore. Again, in his case also, there is no clear evidence about the quantum of money realised. 40. Each party has been attempting in their evidence to exaggerate his own income and to belittle that of the other party. The only safe conclusion that can be drawn from their evidence in respect of their source of income is that both of them were having sources of income without any possibility of exactly ascertaining the quantum of their income. One fact is however clear, money was not spent only for the purpose of acquiring this property and for household expenses, but also for some other specific items exclusively for the benefits of the plaintiffs and her children. In fact properties were acquired at Karaikudi in the name of the plaintiff for Rs. 4500, - and other properties of the total value of Rs. 15,000:- (vide Ex. P-47) in respect of which the plaintiff admits that the fjrst defendant paid the money, but that the money belonged to her. The plaintiff's daughter also purchased 412 acres of land, a scooter was purchased for the plaintiff's, son; Rs. 10,000/- was spent in the year 1971 for the plaintiff's son's marriage. The money for all the above is also admitted by the plaintiff to have been paid by the first defendant, but with the rider that it was out of her own fund. The case of the first defendant of course would be that all the money belonged to him and that he spent the money out of love for the plaintiff. Whatever may be the exact position, the above facts indicate that, apart from the purchase of the suit property, large amounts have been spent for the exclusive benefit of the plaintiff and her children out of the total earnings of the family. 41. Let us now turn to the evidence regarding some specific amounts which have been paid towards the discharge of the dues to the Society for the purchase of the house. P.W. 1 obtained a settlement from her mother in respect of the property bearing door No. 1, Shanmugha Mudali Street, Royapettah, Madras, under Ex. P-36 and almost immediately thereafter she mortgaged the said property to Purasawakkam Hindu Suntha-thar Sanga Nadhi 1st Branch Limited, under Ex. P-37. As per that exhibit, the purpose for which the loan was raised was to purchase a house bearing door No. 26, I Main Road, Gandhi Nagar,

Adyar, Madras (suit property) and for family maintenance expenses. The first defendant has identified the wit- nesses to the document at the lime of the registration of the suit mortgage in the office of the Sub Registrar, Mylapore, The mortgage deed, Ex. P-37, is dated 24-6-1959. In the course of her evidence, the plaintiff who stated that the money was raised to pay Pundarikaksha Naidu later on admitted that the money so raised was not paid to that person and the Society, and that the amount was paid to that person and the society out of the money realised by mortgage of the property of the first defendant. 42. D.W. I on his side mortgaged his property, 94, T.S.V. Koil Street, Mylapore, Madras-4, with one Manali Ramakrishna Mudaliar, raised a loan of Rs. 20,000 - and out of the said sum of Rs. 20,000 - payment was made to the second defendant Society. This fact is not disputed by the plaintiff. However, there is controversy regarding the person who discharged the said mortgage, each party claiming that the mortgage was discharged out of his own fund and deposing to that effect on oath. As per Ex. P-i02, registration copy of the receipt granted by Ramakrishna Mudaliar, there was a part payment of Rs. 1000. - in the first instance and a second payment of Rs. 23,000. - by cheque. D.W. 1 did not have any bank account, but the plaintiff did have one. Ex. P-102 dated 20-8-1962. The 1st defendant in his affidavit of documents, under document No. 7 has listed the plaintiff's pass book the bank for the period from 20-6-1959 to 1-11-1962. That document was not produced by the first defendant and he stated that the said document was missing. Learned single Judge drew an adverse inference on account of the non-production of document No, 7, because he presumed that in all probability the said document would contain the cheque referred to in Ex.P-102. But this inference is absolutely impossible on account of the unambiguous admission made by the plaintiff in the witness box as follows: "Before I met him. 1 was in the habit of depositing the money into bank and after I had contact with him. I gave my earnings and children's earnings to him." The first contact between the plaintiff and the first defendant started in the year 1957 and they have been living together from the year 1959. Therefore, the amount of Rs. 20.000. towards discharge of the mortgage would not have come out of the bank account of the plaintiff. Therefore, the fact that the first defendant raised a loan of Rs. 20,000 - by mortgaging his own properly and paid that sum of Rs. 20,000. - to the second defendantSociety is admitted by the plaintiff herself, even though she contends that the mortgage was discharged with her own money, without adducing any adequate proof to that effect. On the other side, it is found from Ex. D-11 that a sum of Rs. 2782 - was paid on 17-51960 to the Society and that the said amount was borrowed by the plaintiff from Manali Ramakrishna Mudaliar upon executing a promissory note, Ex. P-103. There is also a recital in Ex. P-103 that the borrowal was made for remitting the amount to the second defendantSociety. There is also another document. Ex. P-104, copy of the letter issued by the plaintiff to Manali Ramakrishna Mudaliar requesting him to give her the abovesaid loan of Rs. 2782 . 43. It results from what has been said earlier that there is clear evidence to the effect that the amount of Rs. 20,000, - has been paid to the Society out of the money realised by D.W, 1 mortgaging his property and that an amount of Rs.2782/- has been paid to the Society by the plaintiff out of the money received by executing a pro-note in favour of Manali Ramakrishna Mudaliar. 44. To sum up the plaintiff has not also disclosed the reason why benami transaction was resorted to, but the first defendant has given a convincing version why he took the plaintiff as benamidar. There is evidence to the effect that a property of the plaintiff was mortgaged for the purpose of paying consideration for the suit property, but the money so realised was not utilised for that purpose. There is evidence that a substantial amount has been paid by D.W. 1 towards the acquisition of the suit property by mortgaging his property and that a smaller amount has been paid by the plaintiff towards that end. There is no adequate evidence as to what was the quantum of income and the extent of expenses by each one of them during the relevant period. Therefore, the plea taken by the plaintiff that the property was acquired with her own money in the name of D.W. I which was sought to be established by the overwhelming balance of income over expenses of the plaintiff is far from being proved. The counter-plea of the first defendant that he alone paid the entirety of the money is not also established. This point is answered accordingly. 45. Point No.4:- The evidence makes clear that the parties, though not married, have been living as husband and wife from 1959 to 1971 that D.W. 1 has been looking after the affairs of the whole family as the father, that he has been incurring all expenses for the family, for the household needs, for the artistic performahces for the family ceremonies of the children of the plaintiff and also for the purchase of the properties' in 'the names of the plaint iff and her children. It is in that background that the suit property w;as first sought to be purchased in the name of the plaintiff and then a transfer was effected in the name of the first defendant and the property was ultimately purchased in the latter's name. In view of the relation existing between the parties at that time, none of them has thought that there would be any dispute regarding the property. They have not of course thought of equipping

themselves on each occasion with all proofs necessary for establishing their case, in case of dispute. All acts were done as if they were one soul. It would be artificial at this stage to scan the evidence let in after dispute has crept in in order to find out the real truth. The fact remains that the plaintiff has not established her case nor the first defendant. It is also true that overall control of the family matters was with the first defendant, who was having all the paper?, connected with the suit transaction, but the manner in which the parties were behaving and the way in which the interest of the members of the plaintiff's family were looked after would show that the first defendant was not in and manner acting detrimental to the interest of the plaintiff and that of her children and there is nothing to suggest that the plaintiff had any doubt on the sincerity of the D.W. I in the interest for her family evinced by him. There is no evidence establishing that any one of them has exclusively contributed to the acquisition of the suit property. Undue influence and fraud alleged have not been proved. We have to consider therefore that the property was acquired by the joint efforts of the plaintiff and the first defendant. Though they are not husband and wife, we are convinced that it is just and proper that the property belongs to both of them and not exclusively to the plaintiff or the first defendant as claimed by each of them. 46. In tact, in Cooke v. Head, (1972) 2 All FR 38 it has been observed as follows: "I he constructive or resulting trust imposed by the Courts on the legal owner in the case of a husband and wife who by their joint efforts acquired property to he used for their joint benefit, applied to a man and his mistress who acquired property by their joint efforts with the intention of setting up home together." Accordingly, it was held in that case that [he man was holding the property on trust for himself and his mistress. We are of the opinion that the same principle can be applied to the facts of the ease. Regarding apportionment, in the absence of any definite evidence, we have to decide that it is just and proper that each one of them is declared to be entitled to half in the suit property. 47. As far as the mortgages are concerned, the learned single Judge has held that the money was borrowed and spent by the first defendant for the purpose of improvements to the suit property and that finding has not been challenged by the plaintiff. Therefore, the mortgages will he binding on the two owners of the property equally. 48. In the result, the appeal. O.S.A. 77 of 1979 is allowed in part; the judgment of the learned single Judge is set aside and a decree shall issue on the following lines - "The plaintiff is declared to he the owner of half of the suit property and the mortgages executed by the first defendant in favour of the defendants 3 and 4 are binding on her for half of their value. The suit is dismissed in all other respects. O.S.A. 74 of 1979 is allowed. Each party will bear his own costs. O.S.A. 74 of 1979-- Consequent to our judgment concerning the money in Court deposit or any other directions that may he required the parties are at liberal to more the learned single Judge on the Original Side. 49. Order according.

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MANU/TN/0205/1985 Equivalent Citation: AIR1985Mad321 IN THE HIGH COURT OF MADRAS Decided On: 17.12.1984 Appellants: Andalammal Vs. Respondent: Rajeswari Vedachalarn (deceased by Lrs.) and Ors. Hon'ble V. Ramaswami and Shanmukham, JJ. Counsels: For Appellant/Petitioner/Plaintiff: R. Kesava Aiyangar and K. Yamuna, Advs. For Respondents/Defendant: M.R. Narayanaswami and L.R. Srinivasan, Advs. Subject: Civil Subject: Property Catch Words Mentioned IN Acts/Rules/Orders: Transfer of Property Act, 1882 - Section 41; Indian Contract Act, 1872 - Section 16, 16(1), 16(2) and 16(3); Civil Procedure Code, 1908 - Order 6, Rule 4; Indian Evidence Act, 1872 Section 3 Cases Kaufman v. Gerson, (1904) 1 KB 591, 73 LJKB 320, 90 LT 608 (CA) Case Referred: Judges:

Note:

Property title Section 41 of Transfer of Property Act, 1882, Sections 16, 16 (1), 16 (2) and 16 (3) of Indian Contract Act, 1872, Order 6 Rule 4 of Code of Civil Procedure, 1908 and Section 3 of Indian Evidence Act, 1872 burden is on person who sets up case of benami in case burden not discharged ostensible title prevails in case benamidar and real owner to be related as wife and husband or concubine and paramour payment of consideration by husband or paramour would not be decisive husband or paramour intended to benefit wife or concubine appellant established that she is not benamidar but is real owner burden not discharged by respondent held, ostensible title prevails.

JUDGMENT Shanmukham, J. 1. These appeals are directed against the judgment of Ismail J. as he then was, in A. S. Nos. 843 and 844 of 1971. The learned Judge set aside the common judgment and decrees of the learned Subordinate Judge of Cuddalore in 0. S. Nos. 23 of 1967 and 144 of 1968 respectively. 2. O. S. 23 of 1967 is by the present appellant for setting aside the sale deed dated 17-71965 relating to the suit property marked as Ex. B 2, for recovery of possession of the said property and also for recovery of mesne profits, both past and future. Respondents 1 and 2 in L. P. A. 77 of 1978 are defendants 1 and 2 in that suit. The second respondent is an alienee of the suit property from the first respondent.

3. The case of the appellant is that Ex. B 2 sale for Rs. 8000 was brought about by undue influence, coercion and fraud. According to the appellant, the first respondent, her Manager Venkatarama Naidu and her husband (appellant's husband) were in a position to dominate her will having regard to the relative positions they occupied as against her. It is her further case that Ex. B 2 transaction is a most unconscionable one under which the first respondent had obtained an unfair advantage. She further alleged that she is an illiterate and at the time of execution and registration of Ex. B 2, she was not apprised of the nature and particulars of the transaction. Her further complaint is that D. W. 4, the first respondent's manager threatened that if Ex. B 2 sale deed was not executed, both her husband and herself would be sent to jail. It is her further case that the second respondent's guardian was quite aware of the fact that Ex B 2 sale is void and unenforceable and, therefore, the second respondent is not a bona fide purchaser for value. She also stated that she is the real owner of the suit property and the stand taken by the first respondent that she is benamidar for her husband is wholly baseless. 4. The first respondent's defence is that the appellant's husband is the real owner of the suit property, that he has been enjoying the property paying taxes etc., and that as he was in need of money he raised a loan with the Bank and executed the mortgage deed in favour of the bank in respect of the suit property along with his wife as the property stood in her name. As the appellant's husband was found guilty of criminal misappropriation to the extent of Rs. 25,000, the appellant voluntarily offered to execute Ex. B 2 in order to save her husband from being proceeded against for criminal misappropriation by the first respondent. It is common ground that the appellant's husband was employed in a petrol bunk owned by the first respondent. According to the first respondent, a large sum of nearly Rs. 25,000 was found due and payable by the appellant's husband to her and in partial discharge of the said liability, the appellant joined her husband and executed Ex. B 2 sale deed out of her Own accord. The charge of misrepresentation, coercion and fraud are false and are denied by the first respondent. It is further pointed out that nearly a year after Ex. B 2, sale and the execution of the promissory note marked as Ex. B 1, dated 20-7-1965 for the recovery of which the first respondent had instituted the other suit O. S. 144 of 1968 against the appellant and her husband, did the appellant give notice to him to which he gave suitable reply. Both the suit notice and the suit are at the instigation of the appellant's husband. It is immediately relevant to notice that the first respondent was the real owner but failed to put forward a defence on the assumption that the suit property belonged to the appellant contending that nevertheless the appellant's case of misappropriation, coercion and fraud are baseless. The second respondent, alienee from the first respondent, while adopting the written statement of the first respondent, resisted the suit on the ground that the appellant is a mere benamidar for her husband as she had no funds of her own to acquire the suit property and as she was never in possession in her own right, that her husband alone was in possession of the same that Ex. B 2, sale is true, valid and supported by consideration the same having been executed voluntarily by the appellant and her husband knowing its full implications and that in any event this respondent purchased the suit property for proper value without any notice of any defect in title. 5. O. S. 144 of 1968 is by the first respondent herein against the appellant and her husband for recovery of Rs. 1186-63 being the principal and interest due on Ex. B 1, promissory note dated 20-7-1965, executed for Rs. 9672-51 representing the balance due by the appellant's husband in respect of Rs. 25000 for which he had to account to the first respondent. It is unnecessary to refer to the defence taken by the appellant's husband in this action because though the trial Court dismissed the suit even as against him, he did not prefer any appeal against the judgment and decree made by the learned single Judge of this Court in A. S. 844 of 1971 setting aside the order of dismissal. It is needless to state that the judgment and decree of the learned single Judge of this Court had become final vis-a-vis the appellant's husband (first defendant in O. S. 144 of 1968). The appellant's defence in that action is that she did not execute Ex. B 1; nor did she receive any consideration therefore; even otherwise the consideration under it is illegal, void and opposed to public policy and therefore Ex. B 1 is unenforceable. According to her, her signatures were taken on various blank sheets of paper, one amongst them bearing stamps and her signatures were taken on the date on which Ex. B 2 sale was registered at Tindivanam Sub Registrar's office on 20-71975. She further submitted that Ex. B 1 must have been concocted by the first respondent and her partisans on blank sheets of paper, which contained her signatures. The recitals in Ex. B 1 are all false and fraudulent. She never undertook to discharge the liability of her husband; nor did she ever agree to pay the amount covered by Ex. B 1 to the first respondent. 6. The trial Court framed as many as 9 issues in O. S. 23 of 1967 which are as follows : 1. Whether the suit house had been purchased by the plaintiff with her funds and belonged to her and if not so the plaintiff was only a benamidar for her husband? 2. Whether the sale deed dated 17-7-1965 executed by plaintiff to first defendant is not valid, not supported by consideration and not true?

3. Whether the said sale deed dated 17-71965 is vitiated by undue influence, coercion and fraud and hence void as alleged by plaintiff? 4. Whether the sale deed dated 17-7-1965 is liable to be set aside for all or any of the reasons stated in the plaint? 5. Whether the second defendant is in any event a bona fide transferee for value from first defendant without notice of the rights of the plaintiff to avoid the transaction as alleged? 6. Whether the plaintiff is entitled to past profits and if so at what rate? 7. Whether the suit is not properly valued for the purpose of Court fee? 8. Whether even if so, the plaintiff is precluded from putting forward her title to the suit house? 9. To what relief is the plaintiff entitled? The trial Court observed as regards issues 7 and 8 that they were not argued at all. On other issues it held in favour of the appellant and therefore decreed the suit as prayed for with costs but subject to the payment by the appellant of the mortgage amount which the first respondent paid to the Land Mortgage Bank while it relegated the question of mesne profits to be determined in separate proceedings under O. 20 R. 12 C.P. Code. 7. In the other suit O. S. 144 of 1968 the Trial Court framed the following issues: 1. Whether the suit pronote is true? 2. Whether the suit pronote was executed in the circumstances as mentioned in the written statement of defendants 1 and 2? 3. Whether it is not supported by consideration? 4. Whether it is illegal and opposed to public policy? 5. To what relief if any is plaintiff entitled? The trial Court held issues 1 to 4 in favour of the appellant and her husband the other defendant in the suit and therefore dismissed the suit with costs. 8. On appeal, the learned single Judge of this Court framed four points for determination and they are : 1. Whether it is true that P.W. 4 had misappropriated the amounts belonging to the appellant with regard to her business as Burmah Shell agent? 2. Whether the execution of Ex. B 2 sale deed by P.W. 1 is vitiated by exercise of undue influence, coercion and fraud? 3. Whether the property at Tindivanam sold under Ex. B 2 to the appellant was the absolute property of P.W.1 in whose name the title deed stood or was it purchased by P.W. 4 out of his funds in the name of P.W. 1 not intending to make P.W. 1 the exclusive beneficial owner of the said property? and 4. Whether the execution of Ex. B 1 by P.W. 1 and P.W. 4 was true and whether the said promissory note is enforceable against them? 9. As far as the third point was concerned, the learned Judge felt that it is really unnecessary to consider the same in view of his conclusions on points 1 and 2. As regards the first point his conclusion is that the misappropriation alleged against P.W. 4 (appellant's husband) by the first respondent (appellant before him) and her agent was true and was admitted by P.W. 4 himself. As regards the second point, he held that Ex. B 2 was not vitiated by the exercise of any undue influence as contended by P.W. 1 (appellant herein) and that the said document was executed by her with her free consent and with full knowledge that it was a sale deed by which P.Ws. 1 and 4 were attempting to discharge part of the amount due to the first respondent by P.W. 4 and as a result of the misappropriation of the moneys committed by P.W. 4. 10. Before we advert to the arguments advanced by Mr. R. Kesava Aiyangar, learned counsel for the appellant, which were pregnant with the substantial substance, it may be

useful to take note of the scope of the Letters Patent appeal. In the decision in Ashu Devi v, Dukhi Sao MANU/SC/0019/1974 : [1975]1SCR611 , the Supreme Court has held that the limitation on the power of the Court imposed by Ss. 100 and 101 of the Civil Procedure Code cannot be made applicable to an appellate Court hearing a Letters Patent Appeal from the judgment and decree of the Court subordinate to the High Court, for the simple reason that a single Judge of the High Court is not a Court subordinate to the High Court and that there is no doubt that in an appropriate case a Letters Patent Bench hearing an appeal from an order of a learned single Judge of the High Court in a first appeal heard by him is entitled to review even findings of fact and that the contention of the appellant before them that the Letters Patent Appeal Bench was not in law entitled to reverse the concurrent findings of fact must be negatived and also that under Cl. 15 of the Letters Patent an appeal lies from a judgment and decree without any limitation being imposed upon the powers of the Appellate Court and the whole decree lies open before the Court. It is significant to note that in this case the learned single Judge of this Court reversed the finding of the learned trial Judge. If so, the principle enunciated by the Supreme Court will operate with more vigour here than in a case where both the trial Judge and the learned single Judge of this Court sitting in first appeal concurred with the findings of facts. 11. As the appeal L.P.A. 77 of 1978 is more comprehensive, we propose to deal with it in the first instance. It is also convenient to advert to the defence taken by the second respondent even at the outset. His principal defence is that he is a bona fide purchaser for value without any notice of any defect in title. We may add that as regards the other defence, viz. the appellant is only a benamidar for her husband, it would be dealt with by us in due course. It is needless to state that even if the defence of the first respondent were to be negatived yet the second respondent is entitled to succeed if he were to successfully establish his defence that he is a bona fide purchaser for value as aforesaid. 12. The immediate question that arises for consideration is whether the appellant had adduced proof of the second respondent's guardian's knowledge of the defect in title, In the instant case, we find that there is intrinsic evidence in the documents produced and relied on by the respondents themselves to positively suggest that the said guardian - be it the second respondent's paternal grandfather or his father was sufficiently put on notice of such defect. It is no gain saying that, the evidentiary value of a document is undoubtedly superior to the oral testimony. It is stated in Ex. B 2, the registration copy of which is marked as Ex. A 37, that the suit property was purchased from Shanmugham Pillai out of the earnings of the appellant's husband, that the said property had been in the possession and enjoyment of the appellant and her husband and that to compensate the amounts misappropriated by the appellant's husband as an employee in the first respondent's depot in Gingee, the appellant and her husband (executants of Ex. B 2) had agreed to sell the suit property for Rs. 8000 to the first respondent. It is further recited therein that the vendee (the first respondent) should redeem the mortgage from Tindivanarn Co-operative House Mortgage Bank. Had the guardian of the second respondent examined as Ex. B 2, as she is bound in law to do, she must have been put on notice that the consideration for the sale in the appellant's husband's misappropriation in the vendee's business at Gingee and that though the apparent title stood in the name of the appellant, it is alleged therein that she is only a benamidar for her husband. These averments, in our careful consideration, would have excited suspicion in the mind of any bona fide or reasonable person, particularly when the property purchased is to benefit a minor. Yet another aspect of intrinsic evidence, which would support an inference, is that while in Ex. B 2. it was stated that the suit property was purchased by the appellant's husband out of his earning but in the name of the appellant, in Ex. B 35, it is stipulated that the schedule mentioned property belonged to both the appellant and her husband. Thus there are two inconsistent and irreconcilable sources of title as regards the appellant on the one hand and her husband on the other. Further an enquiry was found necessary is evident from the lawyer's reply Ex. A 41 to the appellant's notice Ex. A 39 sent on behalf of the second respondent's grandmother acting as his guardian. That the grandmother is the guardian of the second respondent is stated in Ex. A 41 and asserted by D.W. 6 in his cross-examination. The evidence of D.W. 6 is that he was not shown as guardian in Ex. B 34, that his mother (the second respondent's grandmother) is the guardian of the second respondent and that it is the said grandmother who gave the reply Ex. A 41. It is also essential to notice at this stage that it is not the case of the second respondent that though the grandmother is the guardian D.W. 6 looked after, all the transactions since negotiation till the execution and registration of Ex. B 35 because the said guardian is very old. For a reference to Ex. A 41 discloses that the said reply was sent under instructions of the minor's grandmother. We had just now referred to the evidence of D.W. 6 in cross examination. He also asserted that it is his mother who is the guardian and gave instructions contained in Ex. A 4 1, reply notice obviously meaning that instructions were given by her to the counsel. While so, there is every force in the contention advanced by Mr. Kesava Aiyangar, learned counsel for the appellant, that in the light of the above admitted evidence, non-examination of the minor's grandmother is fatal to the defence. He fortified his submission by relying on the ruling of the Supreme Court reported in Gopal Krishnaji v. Mohd. Haji Latif MANU/SC/0168/1969 : [1968]3SCR862 . The Supreme Court succinctly laid down the principles in the said decision thus (at p. 1416) -

"Even if the burden of proof does not lie on a party the Court may draw an adverse inference if he withholds important documents in his possession which can throw light on the facts at issue. It is not, in our opinion, a sound practice for those desiring to rely upon certain state of facts to withhold from the Court the best evidence which is in their possession which could throw light upon the issues in controversy and to rely upon the abstract doctrine of onus of proof. In our view, the above dictum would be applicable with great vigour to the instant case, for, we had earlier pointed out that the contents in Exs. B 2 and B 35 are enough to put the minor's guardian on notice about the defect in title and that in Ex. A 41 it was alleged that such an enquiry was made. A fair reading of Ex. A 41 - would indisputably establish that the enquiry was made by the grandmother because she gave instructions to send the notice and because there is no evidence that on her behalf her son D.W. 6 played all the roles in all the transactions to put it differently, though the guardian was put on notice, no evidence was placed at the instance of the second respondent to prove that there was such an enquiry and that despite such enquiry the defect was not noticed. We have to reiterate that there is no reference to D.W. 6 ever taking any part either in the negotiations or in the end transaction, the sale under Ex. B 35 in Ex. A 41. It would immediately follow that no weight can be attached to the evidence of D.W. 6 on this vital aspect of enquiry. Even otherwise, as per the ruling of the Supreme Court, cited supra, the best witness is kept out of Court. These are not all. While Ex. B 35 was executed as early as on 29-12-1965 it came to be registered on 20-4-1966, Even D.W. 6 admitted that it is D.W. 4 (the first respondent's manager) who conducted all the negotiations and finalised the sale under Ex. B 35. We will be referring, in due course, that D.W. 4 is the arch villain in bringing about not only Ex B2, but also Ex. B 35. Further the evidence of D.W. 6 is that he did not notice who was the predecessor-in-title and that though he saw Ex. B 2, he did not care to read the contents thereof. He further deposed that he does not know in whose favour the prior title stood and under what circumstances the sale deed came to be executed by the predecessor-in-title, obviously referring to Ex. B 1. Even in the chief examination he would add that because the first respondent was doing business in a large scale, he thought that he could purchase the property. This admission on the part of D.W. 6 is enough to conclude that no enquiry at all was made on behalf of the minor purchaser notwithstanding that the documents themselves reveal that defect. If, according to D.W. 6, D.W. 4 was simply trusted and D.W. 4 brought about all the transactions resulting in the execution and registration of Ex. B 35, it is reasonable to infer that the minor's guardian is not a bona fide purchaser for consideration without notice of the defect. In the last but the third and fourth paras of the judgment of the learned single Judge, of this Court, this aspect has been dealt with. According to the learned Judge : "There is absolutely nothing to indicate that a perusal of the sale deed Ex. B. 2 by any person will convince that person that the title of the vendee therein was not a perfect title. Equally there is nothing improbable or unnatural in a wealthy person disposing of a property, which he or she had purchased. Consequently, the case of P.W. 1 in this behalf that the purchase by the second appellant in the former appeal was not bona fide and that he was not a transferee for consideration has not been established." He relied upon the following circumstances to support his finding. Nearly a year after Ex. B. 2, the appellant caused Ex.A. 39 notice to be issued. The appellant's explanation for the delay that because she did not have enough money there was delay in sending the lawyer's notice was not acceptable. Her evidence that Ex.A. 39 came to be issued two months after obtaining the registration copy of Ex. A. 37 is therefore not correct. According to the learned Judge, therefore, "This conduct on the part of P.W. 1 (the appellant herein) will lead to the inference that P.W. 1 and P.W. 4 (the appellant's husband) originally executed Ex. B. 2 with the full knowledge that it was sale deed and that it was being executed to liquidate the amount due by P.W. 4 to the appellant therein (first respondent before us) but only later, they wanted to make something out of it and probably they wanted to get some more money from the appellant and that was the cause for the present suit." He further found that there is material discrepancy between the evidence of P.W 1 and her son-in-law P.W. 3, for P.W. 1 stated in her evidence that the second respondent came to her daughter's house and asked her whether she could purchase the suit house and that P.W. 1 told her that there was a case relating to the suit property and asked her not to purchase the same but then P.W. 3 had stated in his evidence that P.W. 1 did not come to his house at all during the relevant period. With great respect to the learned Judge, he has fallen into factual errors while he negatived that the explanation put forward is not true and that there is discrepancy between the evidence of P.W. 1 and P.W. 3. Ex.A. 37 is the registration copy of Ex.B. 2. For issuing the suit notice Ex.A. 39, the appellant had to obtain not only the registration copy of Ex.B. 2 sale but also that of Ex.B. 35 sale. We had earlier pointed out that Ex B. 37 is the registration copy of Ex B 2, while Ex, B. 38 is the registration copy of Ex. B. 35. A reference to Ex. A. 38 shows that the registration copy was applied for on 1-6-1966 and it was prepared and delivered on 3-6-1966. As between 3-6-1966 and 25-7-1966 when Ex.A. 41 was issued, the interval was only about 2 months. It is pertinent to notice what P.W. 1deposed is:

(Matter in Vernacular omitted - Ed.) Factually P.W. 1 made no reference to Ex.A. 37 when she said that she gave notice 2 months after. On the other hand, her evidence is so clear that she gave notice 2 months after she obtained the registration copies of Ex. B. 2. and B. 35. If so, the reasoning of the learned Judge referred to above cannot be sustained. It is true that P.W. 1 had stated that the second defendant came to her daughter's house and asked her whether she (second defendant) could purchase the suit property for which she (P.W. 1) told her that since the said property is involved in a case, she should not purchase the same. The learned Judge is not right when he stated that P.W. 3 had deposed that P.W. 1 did not come to his house at all during the relevant period for his evidence is (Matter in Vernacular omitted - Ed.) 13-14. It is pertinent to notice that Ex. B. 2 is dated 17-7-1965 and Ex. B. 35 is dated 2912-1965. From the evidence extracted above P.W. 3's wife would have given birth to a child in about 4 months. This priod certainly falls within the above interregnum. Therefore, we are unable to find any inconsistency. The other important factor to be noticed in this connection is that there must have been some misunderstanding by P.W. 1 and also by the learned trial Judge when the former spoke about the visit of 'D.2'. It is important to note that the second defendant is a minor though is represented by his father D.W. 6, as guardian. Thus a reference to the second defendant in the deposition of P.W. 1 is an obvious mistake. It might be that P.W. 1 was rather referring to the minor's grandmother because in the deposition as recorded by the learned trial Judge we find the following (Matter in vernacular omitted - Ed.) It is significant to notice that the reply notice was sent only by the minor's grandmother but not by his father. In the cyclostyled copy of the deposition prepared by this office for the purpose of A.S. 843 of 1971 it is wrongly prepared as follows : (Matter in Vernacular omitted - Ed.) The expedient course is not to be, therefore, influenced one way or the other by that part of the evidence of P.W. 1 because of the foregoing circumstances. For the reasons stated above, we find that the finding of the learned Judge of this Court can hardly be supported by evidence. 14A. In the result, we are constrained to set aside his finding and restore that of the learned trial Judge. 15. The next question to which we propose to advert is the issue relating to benami theory. It is by now well settled that the burden is on the person who sets up the case of benami in the instant case the respondents - and that if the burden is not discharged, the ostensible title will prevail. To substantiate a case of benami, the judicial pronouncements have laid down several factors have to be taken into consideration and on an over all assessment of such factors is the Court to render a finding. The relevant factors are: (a) the consideration; (b) possession and enjoyment of the property; (c) possession of the title deeds; (d) motive and (e) mutation in the public records. Further, if the benamidar and the real owner were to be related as wife and husband, or concubine and paramour, the payment of consideration by the husband or paramour, as the case may be, would not be decisive, for, it is most likely that the husband or paramour intended to benefit the wife or the concubine. We had already referred to the inconsistency as regards source of title to P.W. 1 or P.W. 4 as between Ex. B. 2 and. Ex. B. 35. We recall the same at this juncture to point out that there is no consistency in the defence on this vitial aspect. In Ex. B. 2, it is recited that out of the earnings of P.W. 4, the suit property was purchased. However, nothing was elicited from P.W. 4, as to the date of his employment, particular of his employment, particulars of - his salary and his savings. It has to be immediately pointed out that none of the defence witnesses had ever spoken to these relevant matters. Thus, no satisfactory evidence is placed before the Court in proof of the means of P.W. 4 at the time of purchase under Exs. A. 2 and A. 3. It may not be out of place to point out that from the evidence it is possible to conclude that P.W. 4 would not have been in employment at the time of Exs.A. 2 and A. 3. According to D. W. 5. P.W. 4 had 18 years of service. Evidence was given on 199-1971. This will take us to about 1953. D.W. 4 would depose that he came to be employed in the first respondent's service in 1951 and that even before that P.W. 4 was working under D.W. 5. All these will suggest that P.W. 4 would have got employed only in 1951. In any event, it is most unlikely that P.W. 4 would have saved Rs. 2000 to find the consideration for Exs.A. 2 and A. 3. As the parties are related as husband and wife, possession and enjoyment of the property would not throw any definite light and therefore we leave this out of consideration. As regards possession of documents of title, the property came to be mortgaged with the Tindivanam Co-operative House Mortgage Bank under Ex.B. 33 dated 24-9-1962, and the mortgage deed was executed both by P.W. 1 and P.W. 4. It is the evidence of P.W. 1, that

as she happened to be a woman, the bank insisted that her husband should also join the execution of the mortgage deed. A reference to Ex.B. 33, would reveal that a printed form of mortgage deed was utilised by the Bank. Therefore, even this has to be left out of consideration. As regards motive, there is neither pleading nor evidence, as rightly pointed out by the learned trial Judge. Fortunately, for the appellant, the property is registered in her name in the records of Tindivanam Municipality as seen from Exs.A. 11 to A. 19, which are all house tax receipts issued in her name. On the top of it all, Ex.A. 20, dated 2-7-1956 is the plan submitted by the appellant for effecting improvements. In that document the appellant alone had signed as owner. The above conspectus will undoubtedly establish that far from the respondents discharging their burden, the appellant has satisfactorily established that she is not the benamidar but is the real owner. At any rate, we have to reiterate that the burden had not been discharged and in such a case as already pointed out, the ostensible title will have to be upheld. 16. With reference to this issue, the learned Judge of this Court has observed thus:"As far as the third point is concerned, it is really unnecessary to consider the same in view of my conclusions on points Nos. 1 and 2. Once it is held that P.W. 1 executed the sale deed Ex.B. 2, voluntarily and with full knowledge of its contents as a sale deed, it is totally irrelevant whether the property belonged to her or not." Two possibilities emerge from the above observations. The first is that he did not want to disturb the finding of the learned trial Judge while the other is that the learned Judge would have proceeded on the assumption that the real owner is P.W. 1, but yet her case regarding undue influence, coercion and fraud was not established. 17. According to Mr. Kesava Aiyangar, learned counsel for the appellants, the respondents restricted their defence that P.W. 4 is the real owner but failed to plead a case in the alternative to the effect that even assuming that P.W. 1 is the real owner, yet the case of undue influence and coercion is not true. He would further submit that in the absence of an alternative pleading, the Court shall not look into the evidence on this aspect. Relying upon the decision in Atta Md. v. Emperor, AIR 1930 PC 57 (2), the learned counsel would urge that the prohibition is addressed to the Court whereby the Court is refrained from looking into the evidence because there is no pleading on that matter. A proper reading of the written statement filed by the first respondent clearly shows that though such an alternative plea is not expressly pleaded, she had not only denied the undue influence and coercion but also stated that Ex.B. 2 transaction was a voluntary one entered into by the appellant with full knowledge and consent and that the first respondent had not had any unfair advantage. The said defence taken by the first respondent as regards undue influence and coercion will fairly indicate that they are setting forth the defence on the statements of fact in relation to undue influence and coercion are well brought the alternative case based on the assumption that P.W. 4 is the real owner. The draftsman is not the first respondent herself but luckily for out in the written statement. If so, it would be rather unjust to read the written statement as not raising a defence on the alternative case. We are therefore unable to agree with the learned counsel for the appellant that because no alternative case is pleaded, the evidence should not be looked into and also that the approach of the learned Judge of this Court in not deciding this issue relating to benami had vitiated his judgment; 18. So it is rather unnecessary to peep into the two decisions cited by the learned counsel for the appellant namely Atta Md. v. Emperor, AIR 1930 PC 57 (2) and Bhagat Singh v. Jaswant Singh, AIR 1966 SC 1861. 19. It is now convenient to advert to the first point for consideration as determined by the learned Judge of this Court, The finding of the learned Judge is that the misappropriation alleged against P.W. 4 by the first respondent and her agent D.W. 4 was proved and was admitted by P.W. 4 himself. The learned Judge also pointed out that Mr. Kesava Aiyangar who appeared for P.W. 1 and P.W. 4 dealt with this as the last point and did not, in fact, argue anything in the face of the evidence available on record. The learned counsel before us submitted that his contention on this aspect was not understood in the proper perspective. There is no need for us to get ourselves entangled on this very nice controversy. Fortunately for us, the substratum of the arguments advanced by the learned counsel hinged upon as to whether the appellant had not succeeded in substantiating that Ex.B. 2 was brought about under undue influence, coercion and fraud. In short, the submission turned upon the assessment of evidence in this case. This, in turn, takes us to examine issues Nos. 2, 3 and 4 as framed by the learned trial Judge and point No. 4 as formulated by the learned Judge of this Court. 20. Before we proceed to assess the evidence in this case, it is useful to look at the position of law. Immediately it has to be noticed that the appellant's case is not that the document is void ab initio as offending S. 23 of the Contract Act, but is voidable by virtue of undue influence, coercion and fraud practiced on her both by P.W. 4 and D.W. 4. S. 16 of the Contract Act defines what is undue influence. S. 16 reads as follows -

"16(1) A contract is said to lie induced by 'undue influence' where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other. (2) In particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in a position to dominate the will of another (a) where he holds a real or apparent authority over the other, or where he stands in a fiduciary relation to the other; or b) where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress. 3. Where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proof that such contract was not induced by undue influence shall lie upon the person in a position to dominate the will of the other." 21. A close examination of the said provision reveals that under circumstances set out in S. 16(l) a case of undue influence is established. If the circumstances set out either in subcl. (a) or sub-clause (b) in sub-sec. (2) are found to be established, a person is deemed to be in a position to dominate the will of another. Sub-sec. (2) is common to sub-sec. (1) and sub-sec. (3) of S. 16. As between sub-sec. (1) and sub-sec. (3), the common factor is that one of the parties was in a position to dominate the will of the other. Sub-sec. (1) and subsec. (3) cover two different fields, though at times, one may overlap the other. To attract sub-sec. (1) two things should be established, namely, (a) one of the parties was in a position to dominate the will of the other and (b) he used that position and obtained an unfair advantage over the other while to attract sub-sec. (3),(a) the person was in a position to dominate the will of the other and (b) the transaction appeared on the face of it or the evidence adduced was to be unconscionable. There is another vital difference between subsec. (1) and sub-sec. (3). In sub-sec. (3), if the two ingredients are established, the burden of proof that contract was not induced by undue influence shall lie upon the person in a position to dominate the will of the other. This presumption is absent in sub-sec. (1). This, in our view, is the proper reading of S. 16 of the Contract Act. Another special feature is found in S.16(3), i.e., if it is established that a person who is in a position to dominate the will of another entered into a contract with him and if the transaction appeared either on the face of it or on the evidence adduced to be unconscionable, the burden is upon the person who was dominating the will of another to prove that such contract was not induced by undue influence. The word 'shall' found in S. 16(3) indicates that the presumption is mandatory. In the instant case, if the ingredients referred to in S. 16(3) were to be established by the appellant the burden would be on the respondents to satisfactorily prove that Ex.B. 2 sale was not induced by undue influence. The concomitant position is that if the burden is not discharged, the presumption shall prevail. It is further significant to notice that either on the evidence or on the face of the transaction it is enough if it appeared to be unconscionable. In other words, it is enough for the appellant to substantiate that the transaction was prima facie unconscionable and that she was under the domination of her husband P.W. 4 and the, first respondent's manager D.W. 4. To put it differently, positive proof that the transaction is unconscionable is dispensed with to raise a statutory presumption and the statutory presumption would be in force until the burden is rebutted. According to the learned counsel for the appellant, this import of Cl. (3) of S. 16 was not noticed by the learned Judge of this Court and the result was the learned Judge threw the burden wrongly on appellant. This, according to the learned counsel, has to a greater extent vitiated the judgment of the learned Judge. He would further urge that there are enough circumstances to project a prima facie case as envisaged by S. 16(3) and that in any event, there is ample evidence in this case to support misrepresentation, coercion and fraud. 22. S. 16(2) says what is domination. If a person should hold either a real or apparent authority over the other, he would be deemed to be in a position to dominate the will of another (emphasis by us). We shall not lose the significance of the expressions 'real' and 'apparent' employed in that sub-section. In our view, even if the circumstances were to project that one had apparent authority over the other, it would be deemed that the person dominated the will of the other as envisaged by sub-sec. (2) of S. 16. So too, if a person were to stand in a fiduciary relationship with the other, the former would be deemed to have dominated the will of the other. We are not referring to sub-sec. (b) as that is not relevant in this case. The plain meaning of sub-sec. (2) clearly points out that the relationship between the two has no relevance at all though it may in certain cases project a prima facie case. 23. It is now worthwhile to refer to the citations brought to our notice in this context. They are Tungabai v. Yeshwant MANU/PR/0003/1944; Inche Noriah v. Shaik Allie AIR 1929 PC 3; Kaufman v. Gerson (1904). 1 KB 591; Rama Patter and Bros v. Manikam AIR 1935 Mad

726; Subhas Chandra v. Ganga Prosad, MANU/SC/0069/1966 : [1967]1SCR331 (This is relied on by both the counsel) and Ladli Prasad Jaiswal v. Karnal Distillery Co. Ltd., MANU/SC/0061/1962 : [1964]1SCR270 . These are all cited by the learned counsel for the appellant. The learned senior counsel for the respondents brought to our notice the decisions in Raghunath Prasad v. Sarju Prasad, AIR 1924 PC 60 and Poosathurai v. Kannappa Chettiar, AIR 1920 PC 65. The learned senior counsel for the respondents contended that in all cases if the facts were either under S. 16(l) or under S. 16(3), these provisions would not be attracted unless there is proof that P.W. 4 and D.W. 4 dominated the will of the appellant. He would further submit that on the evidence in this case the factum of domination as alleged by the appellant was not established at all. The facts in Tungabai v. Yeshwant Jog MANU/PR/0003/1944 are : - The husband was heavily in debt; he had mortgaged all his own property and, being pressed for money had nothing to offer by way of security for a further loan than his already encumbered estate. He approached his creditor for a further loan of Rs. 7000 but the latter was unwilling to lend it either on the security of the husband's encumbered lands or on a promissory note. So the only security, which could be offered, was the wife's land. The wife was quite illiterate; unable to read or write, but could sign her name. Her husband managed the wife's property entirely; she was a submissive wife, and if her husband told her to execute a document she did so at his bidding and without informing herself of the contents. The wife's property brought some income on which the family had to depend and the wife executed the mortgage deed for Rs. 7000 for the husband's benefit and received nothing out of the amount herself. On those facts the Privy Council held that the wife was acting under the influence of her husband for whose benefit the mortgage was being executed and that the creditor who benefited by the transaction had notice of the facts, which raised presumption, and hence he was in no better position than the husband who exercised influence. It was further held that it was unnecessary to decide whether there was actual fraud by the husband; it was enough to show that the wife was acting under his influence and not as a free agent; considering that he was at the end of his resources and that the income from the wife's property was all that was to support the family it was a most improvident thing to mortgage their only means of livelihood for the purpose of using at any rate a substantial portion of the money to pay off antecedent debts of the husband, and an action which no right minded person ought to have entertained. This decision cited with approval the earlier decision of the Privy Council in Inche Noriah v. Shaik Allie, AIR 1929 PC 3. There the donee who is related as nephew of the donor took advantage of the fact that the donor was a feeble old woman unable to leave the house and entirely trusted the donee, the donee took a settlement deed, The principle is settled as follows by the Privy Council "That the relations between the donor and donee were sufficient to raise the presumption of the influence of the donee over the donor and to render it incumbent upon him to prove that the gift was the spontaneous act of the donor acting under circumstances which enabled her to exercise an independent will, and which justified the Court in holding that the gift was the result of the free exercise of her will." We do not find the principle laid down in Kaufman v..Gerson (1904) 1 KB 591 is ever applicable to the facts in this case, because, as already pointed out by u I s, it is not the case of the appellant that the consideration for Ex.B. 2 was to stifle the prosecution and opposed to public policy but then the document came to be executed by her because of undue influence, coercion and fraud. The ratio laid down by a Division Bench of this Court in Rama Pattar and Bros v. Manikkam, AIR 1935 Mad 726 as appropriate for the present case is that in a case of undue influence and fraud the mere fact that on one or two matters the Court does not accept a party's evidence will not disentitle him to relief, for in such cases conclusion of the Court rests not so much upon direct evidence showing that any deception was practised as upon inferences arising from the situation of the parties and nature and effect of the transaction and also that whether the creditor himself exercised undue influence or took benefit under that transaction with notice that that transaction was the result of undue influence exercised by the debtors, the nature of the transaction would suffer the same infirmity. In Subbash Chandra v. Ganga Prosad MANU/SC/0069/1966 : [1967]1SCR331 the facts are as follows :"The suit in, the present case was for declaring that a deed of settlement executed by the plaintiff's father and the plaintiff's sister in favour of the plaintiff's brother's son in respect of certain properties was fraudulent, collusive and invalid and for cancellation of the said document. The trial Court dismissed the suit. However in appeal the High Court proceeded on the basis that in the circumstances of the case and in view of the relationship of the parties the trial Court should have made a presumption that the donee had influence over the donor and should have asked for proof from the respondents before the High Court that the gift was the spontaneous act of the donor acting under circumstance which enabled him to exercise an independent will and which would justify the Court in holding that the gift was the result of a free exercise of the donor's will. The High Court went on to presume from the great age of the donor that his intelligence or understanding must have deteriorated with advancing years and consequently, it was for the, Court to presume that he was under the influence of the younger son at the date of the gift. In appeal before this Court it was contended on behalf of the defendant appellant that the judgment of the High

Court had proceeded on an entirely erroneous basis and that there was no sufficient Pleading of undue influence nor was there any evidence adduced at the trial to make out a case of undue influence". On those facts, the Supreme Court laid down the following principle "The law as to undue influence is the same in the case of gifts inter vivos as in the case of a contract and the Court trying a case of undue influence must consider in view of S. 16(l) of the Indian Contract Act, two things to start, with, namely, (1) are the relations between the donor and the donee such that the donee is in a position to dominate the will of the donor and (2) has the donee used that position to obtain an unfair advantage over the donee? Sub-sec. (2) of S. 16 illustrates is to when a person is considered to be in a position to dominate the will of another. These are inter alia (a) where the donee holds a real or apparent authority over the donor or (b) when he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness or mental or bodily distress. Sub-sec. (3) of the section throws the burden of proving that a contract was not induced by undue influence on the person benefited by it when two factors are found against him namely that he is in a position to dominate the will of another and the transaction appears on the face of it or on the evidence adduced to be unconscionable. Thus under S. 16 the unconscionableness of the bargain is not the first thing to be considered. The first thing to be considered is the relation of the parties. But the High Court neither determined the relationship of the parties as required in S. 16(l), nor did it find that the transaction was unconscionable. Therefore the presumption made by it were unwarranted by law. (ii) Before a Court is called upon to examine whether undue influence was exercised or not it must scrutinise the pleadings to find out that such a case has been made out and that full particulars of undue influence have been given as in the case of fraud. These conditions remained unsatisfied in the present case. I (iii) On the evidence in the case the trial Court was right in its conclusion that the donor was fully aware of the fact that he had transferred the property to defendant No. 1. It had not been established that he was of unsound mind. iv) There could be no presumption of undue influence merely because the donor and the donee were nearly related to each other. Nor could the fact that a grandfather made a gift of a portion of his properties to his only grandson a few years before his death show that the transaction was unconscionable". It is relevant to notice that the Supreme Court has only quoted the following observations from Raghunath Prasad v. Sarju Prasad, (1924) 51 Ind App 101 : AIR 1924 PC 60 "The unconscionableness of the bargain is not the first thing to be considered. The first thing to be considered is the relations of these parties. Were they such as to put one in a position to dominate the other?" 24. A reading of the judgment of the Supreme Court will reveal that except what they have quoted above, the learned judges have not expressed their views one way or the other. Immediately after the quotation, the Supreme Court observed: "It must also be noted that merely because the parties were nearly related to each other no presumption of undue influence can arise". Therefore, it cannot be understood that the Supreme Court had subscribed their concurrence to the above observations. We had taken some pains to refer to this passage because section as such does not make any reference to relationship. It may - be stated that in that case the Supreme Court set aside the judgment and decree of the High Court particularly because the case of undue influence had not been sufficiently alleged either in the pleadings or substantiated on the evidence adduced. Two matters on which the principle of law is settled by the Supreme Court are enough to be noticed. The first is that a vague or general principle regarding undue influence can never serve the purpose or satisfy the requirements of 0. 6. R. 4 of the Civil Procedure Code, that the party pleading must therefore be required to plead the precise nature of the influence exercised, the manner of are of the influence, and the unfair advantage obtained by the other that the rule had been evolved with a view to narrow the issue and protect the party charged with improper conduct from being taken by surprise and that a plea of undue influence must. To serve the dual purpose, be precise and all necessary particulars in support of the plea must be embodied in the pleading. The other principles relate to construction of S. 16 and we quote the following from the decision of the Supreme Court in Ladli Prasad Jaismal v. Karnal Distillery Co. Ltd., MANU/SC/0061/1962 : [1964]1SCR270 -

"A transaction may be vitiated on account of undue influence where the relations between the parties are such that one of them is in a position to dominate the will of the other and he uses his position to obtain an unfair advantage over the other. It is manifest that both the conditions have ordinarily to be established by the person seeking to avoid the transaction; he has to prove that the other party to a transaction was in a position to dominate his will and that the other party had obtained an unfair advantage by using that position. Clause (2) lays down a special presumption that a person is deemed to be in a position to dominate the will of another where the holds a real or apparent authority over the other, or where he stands in a fiduciary relation to the other or where he enters into a transaction with a person whose mental capacity is temporarily or permanently affected by reason of age, illness or mental or bodily distress. Where it is proved that a person is in a position to dominate the will of another (such proof being furnished either by evidence or by the presumption arising under sub-sec. (2)) and he enters into a transaction with that other person, which on the face of it or on the evidence adduced, appears to be unconscionable the burden of proving that the transaction was not induced by undue influence lies upon the person in a position to dominate the will of the other. But sub-sec. (13) has manifestly a limited application: the presumption will only arise if it is established by evidence that the party who had obtained the benefit of a transaction was in a position to dominate the will of the other and that the transaction is shown to be unconscionable. If either of these two conditions is not fulfilled the presumption of undue influence will not arise and burden will not shift. No doubt, in that case the Supreme Court, on the evidence, stated that the High Court was in error in relying upon the presumption under sub-sec. (3) of S. 16, because in their view the evidence does not justify the conclusion that the plaintiff was in a position to dominate the will of the defendants and that the resolutions gave an unconscionable advantage to the plaintiff. The decision in Raghunath Prasad v. Sarju Prasad, AIR 1924 PC 60 is referred to by the Supreme Court in Subhash Chandra v.Ganga,Prasad, MANU/SC/0069/1966 : [1967]1SCR331 and there is no need to advert to it once over. As for the decision in Poosathurai v. Kannappa Chettiar, AIR 1920 PC 65it is enough to notice the ratio laid down therein which is as follows "It is a mistake to treat undue influence as having been established by a proof of the relations of the parties having been such that the one naturally relied upon the other for advice, and the other was in a position to dominate the will of the first in giving it. Up to that point 'influence' alone has been made out. Such influence may be used wisely, judiciously and helpfully. But, whether by the Law of India or the Law of England, more, than mere influence must be proved so as to render influence, in the language of the law 'undue'. It must be established that the person is in a position of domination has used that position to obtain unfair advantage for himself, and so to cause injury to the person relying upon his authority or aid. And where the relation of influence, as above set forth, has been established, and the second thing is also made clear, viz, that the bargain is with the 'influence' and in, itself unconscionable, then the person in a position to use his dominating power has the burden thrown upon him and it is a heavy burden of establishing affirmatively that no domination was practised so as to bring about the transaction, but that the grantor of the deed was scrupulously kept separately advised in the independence of a free agent." Of course, in that case the Privy Council upheld the decision of the High Court, which reversed the decree of the learned Subordinate Judge and held that the undue influence was not proved. 24A. Let us now turn to the evidence While the learned counsel for the appellant covered this field with moot minute details, the learned Senior counsel for the respondents argued that we should go by the broad probabilities in this case particularly emphasising on the finding that P.W. 4, the appellant's husband, had embezzled the moneys of the first respondent as her employee and also pointed out that it is not uncommon that a Hindu dutiful wife would sacrifice her personal property for the sake of her husband. According, to the learned Senior Counsel, it is the feeling of reparation that has persuaded the appellant to voluntarily execute Ex.B. 2. Had the facts been so simple as suggested by the learned Senior Counsel and had the appellant's husband been once and for all exonerated in lieu of Ex.B. 2 transactions, it might be that the transaction cannot be presumed to be unfair or unconscionable. As a matter of fact, these submissions prevailed upon the learned single Judge of this Court as can be seen from his reasoning :- "To save him from his predicament, P.W. 1 should have agreed to execute Ex.B. 2 as well as to join the execution of the promissory note and that would have been the natural reaction of any wife when she finds that her husband has misappropriated a huge amount of his employer and therefore he had to make good the amount" and "the contention of Mr. A R. Narayanaswami is that what P.W. 1and P.W. 4 have done in the present case is to make a

reparation and such making of reparation should be encouraged, and that P.W. 1 and P.W. 4 having offered to make the reparation and made the reparation ought not to be allowed to go back on what they have done. I am inclined to agree with this contention. The execution of Ex.B. 2, the sale of the lorry and the execution of Ex.B. 1 are all in the nature of making reparation with regard to the swindling of the appellant's money by P.W. 4 and there is nothing illegal about the making of such reparation, and the making of, such reparation could not be challenged on the ground of exercise of undue influence. Hence, my conclusion on this point is that no threat was administered to P.W. 1, in order to enable her to challenge Ex.B. 2, the sale deed, on the ground that it was vitiated by the exercise of undue influence and that her consent to the same was not free." But, in this case, there are complex circumstances. The evidence adduced by the respondents is not only mutually contradictory but is also unconvincing and unworthy of acceptance and, on the top of it all, all the possessions of P.W. 1 and P.W. 4 were not only stripped off in the process of alleged reparation but they were also called upon to execute Ex.B. 1 promissory note. 25. As rightly pointed out by the learned counsel for the appellant, the learned Judge was not right when he expressed the opinion that the probabilities of the case are against such stand of P.W. 1, that he had already referred to the fact that the evidence of D.W. 4 was that he asked P.W. 4 to get P.W. I to the company's premises at Gingee on 16-7-1965 and that she accordingly came to the depot and agreed to execute the sale deed and that if that was true, it would mean that Ex.B. 2 was written and executed after P.W. 1 and P.W. 4 had agreed to execute the same and therefore the question of administration of any threat at the time of obtaining the signature on 17-71965 did not arise. Finally, he concluded as follows : "Under these circumstances, I am clearly of the opinion that when P.W. 1 executed Ex.B.2 she was not subjected to any threat that she would be sent to jail or her husband would be sent to jail and the document was written and executed as a result of the prior understanding between the parties." The prior understanding as already referred to is said to have taken place on 16-7-1965 at Gingee at the first respondent's company premises. First of all this case was not pleaded. Secondly this particular aspect was not put to P.W. 1, in the course of cross examination. Further, even. D.W. 5 the first respondent herself had not spoken to this in the witness box. Above all, for the first time, this is whispered by D. W. 4, the first respondent's manager in his cross examination and the relevant evidence is that on 16-7-1965 after meals D.W. 4 went to Gingee and asked P.W. 4 to get, P.W. 1 and that P.W. 1 on 16th evening agreed to execute the sale deed. It is also relevant to, notice that his further statement is to the effect that he did not instruct his counsel to put this ease to P.W. 1 and P.W. 4 because he thought that it was wholly unnecessary. It is this piece of evidence which was accepted by the learned Judge in spite of the infirmities stated supra and also to be stated infra. On the top of all, the above statement of 4 in the cross examination can hardly be reconciled with his evidence in chief. In the chief examination D.W. 4 had stated that on 6th evening the stamp papers for Ex.B. 2 work arranged to be purchased at Tindivanam and that, thereafter D.W. 4 and P.W. 4 went to Gingee and that it was agreed that as the title deeds stood in the name of P.W. 1, both P.W. 1 and P.W. 4 should join the execution of the sale deed agreed to be executed, that on 17th P.W. 4 was at Gingee, that the stamp papers were purchased on 17th and were brought by P.W. 4, that in Gingee depot Srinivasan prepared a draft, that the same was read over to P.W. 4, that P.W. 4 approved the same and that thereafter Ex.B. 2 was prepared. The above evidence will rule out the possibility of D.W. 4 having met P.W. 1 on the 16th evening. This selfcontradictory statement made by D.W. 4 was also not noticed by the learned Judge. Quite rightly, therefore, was the learned counsel for the appellant well founded in his criticism that the learned Judge has wholly erred in believing that there is evidence that on the 16th evening P.W. 1 agreed to D.W. 4 to execute the sale deed, such an erroneous approach by the learned Judge will certainly have a telling effect on his decision. 26. According to the learned Judge, for the first time P.W. 1 stated in her evidence that D.W. 4 threatened that she as well as her husband would be sent to jail if she did not execute the document Ex.B. 2, that P.W. 2 did not say about anybody being sent to jail, that he merely stated that D.W. 4 stated that if P.W. 1 did not sign it could lead to a criminal case and that the evidence of P.W. 3 is different while he stated that D.W. 4 threatened P.W. 1 that P.W. 4 would be sent to jail. But in the plaint in para 5 the following averment is found : "Petitioner learns that thereafter, the first respondent and her manager Venkatarama Naidu told Veerabadran Pillai that unless he along with the petitioner executed a sale deed of the under mentioned house to the 1st respondent for Rs. 8000 he would be prosecuted and, sent to jail for criminal dishonest misappropriation to the extent of Rs. 25000". In para 8 it is stated thus : "Venkatarama Naidu (D.W. 4) also threatened them that if the petitioner plaintiff did not put her signature to that document, she would also be arrested and sent to jail". Thus, the learned Judge's statement that for the first time P.W. 1 stated in her evidence that D.W. 4 threatened that she as well as her husband would be sent to jail is not correct. So too, the other criticism that there is discrepancy between the evidence of P.W. 2 and P.W. 3 can hardly be accepted on the materials in this case. It is relevant to notice that P.W. 2 is an attestor to Ex.B. 2. It is equally relevant to notice that a fair reading of his evidence will disclose that he was not present right through the transactions resulting in the execution of Ex.B. 2. He did say as follows:-

(Matter in vernacular omitted - Ed.) The reference to criminal case is comprehensive enough to take into its fold the threat of P.W. 1 and P.W. 4 being sent to jail. It is very important to notice that this statement of P.W. 2 was not challenged in the cross examination. Ruining to the evidence of P.W. 3, it will be seen that this witness also was not present right through the transaction P.W. 3 in chief examination had deposed as follows (Matter in ' vernacular omitted - Ed.) We fail to understand as to how there is any inconsistency between the evidence of P.W. 2 and P.W. 3 with regard to the threat extended to P.W. 1. It is needless to state that the evidence of a witness should be read as whole while a comparison is made with that of the testimony of another witness. It is rather hazardous to expect that the corroboration by one witness should be in identical terms with the testimony of another witness. The reasonable course is to read the evidence of all the witnesses as a whole and to find out whether on the material aspect, which alone will have, an impact on the issue concerned was there corroboration. On the evidence in this case we reiterate that the evidence of P.W. 1 finds corroboration not only from P.W. 2 but also from P.W. 3; we exclude from our consideration the evidence of P.W. 4 who is after all P.W. 1's husband and also P.W. 5 ,and P.W. 6 for the present. 27. We will now demonstrate as to how the evidence of P.W. 5 and P.W. 6 is of assistance to the appellant though according to the learned Judge of this Court it was otherwise. It is seen from the testimony of P.W. 5 that he was not present at the time when P.W. 6 signed Ex.B. 6. At the same time, his evidence is that the moment P.W. 1 refused to sign he left the place. Thus this witness has spoken to the incident that had taken place as long as he was present. Even that evidence is to the effect that P.W. 1 refused to sign Ex.B. 2. This evidence is sufficient to sustain an inference that she was not prepared to execute the document voluntarily. Turning to P.W. 6 the important feature worthwhile noticing is that he is an independent and disinterested witness; he owns a soda factory. This witness has been categorical in his statement that only after D.W. 4 threatened P.W. 1 and P.W. 4 to send them to jail unless she (P.W. 1) signed the document, did P.W. 1 sign it. Nothing was suggested to this witness during the course of cross-examination to discredit his testimony. The only suggestion put to him in the course of cross-examination was that at the instance of P.W. 1 he was deposing falsely . It is pertinent to note that this witness has also spoken to the, fact that Ex.B. 2 was not read over, that P.W. 1 was somewhere in the interior portion of her house and that after the Manager (D.W. 4) sent for her, she came to the front portion of the house. Nontheless the learned Judge has stated that the evidence of P.W. 6 is not of much assistance. Thus it turns out that the rejection of the evidence of P.Ws. 2,5 and 6 in any event is not proper. 28. Now let us examine the evidence adduced on behalf of the first respondent. We had already dealt with the evidence of D.W. 6 the alienee's father. So far as D.W. 5 (first respondent) is concerned, it is very significant to notice that she made no reference to P.W. 1. Also in Ex.A. 40 which is the reply notice sent at the instance of the first respondent, there is no reference that instructions for the notice were conveyed by the first respondent through her manager D.W. 4. On the other hand, a reading of Ex.A. 40 will reveal that the first respondent herself had personally given instructions for the said reply. In the reply notice it is alleged that P.W. 1 was aware of her husband having misappropriated Rs. 25000, that the first respondent came to know about the same, the matter was discussed in the presence of P.W. 1, P.W. 4 and certain other persons who were interested in them and P.W. 1 and P.W. 4. This, according to the averment suggests that there must have between a discussion between the first respondent on the one hand and the appellant her husband and others on the other. But this vital aspect is not spoken to by D. W. 5 herself in her evidence. We had just now referred to the fact that D.W. 5 made no reference to P.W. 1. On the other hand, a reading of her evidence as a whole would show that she had met P.W. 4 only and all the transactions were dealt with by her with P.W. 4. The second crucial aspect to be noticed is that in Ex.A. 40 it is stated that out of the funds misappropriated, the suit house was improved and that P.W. 4 purchased jewels for P.W. 1, and that because of the same, P.W. 1 voluntarily agreed to make good the amount misappropriated by her husband. Again this material aspect was not spoken to by D.W. 5 in the witness box. It will be further seen that tile above stand taken by the defence will go a long way to give a death blow to the respondent's case. According to the averments in Ex.A. 10, P.W. 1 volunteered to make good the amount to the first respondent because out of the misappropriated amount the house was improved and jewels wefe purchased. This will repel the theory of reparation that is said to have worked in the mind of P.W. 1. The above* averments only exhibit the first respondent's anxiety to justify Ex. B. 6 as a fair deal by some means or other. As already pointed out not only did D.W. 5 fail to refer to this vital aspect but also was this case not put to P.W. 1. The documentary evidence, which we will be referring to presently, will destroy the above theory trotted out by the first respondent in her reply Ex.A. 40. It is seen from the evidence of D.W. 4 and Ex.B. 7 that the amounts said to have been

misappropriated must be between 1-4-1965 and 30-6-1965. A reference to Ex.A. 20 which is the plan submitted by the appellant for improvement is dated 2-7-1965, and from this it is obvious that improvement should have been made somewhere in 1956. Thus it is conclusively established that the amount which is said to have been misappropriated in 1965 could not have been utilised for improving the suit house. It is further interesting to note that D.W. 4 would excel his master D.W. 5 as to how the alleged misappropriated amount was utilised, by P.W. 5. Even in the chief examination he had deposed. (Matter in vernacular omitted - Ed.) This is a new invention by D.W. 4 is beyond doubt. For, it is neither alleged in Ex.A. 40 nor in the written statement nor did D.W. 5 speak to this aspect. At any rate, the said statement is wholly false is obvious from the fact that the amount was misappropriated somewhere in 1965 while the suit house was purchased under Exs. A. 2 and A.3 as early as in 1950. How then are we to trust either D.W. 4 or D.W. 5. It is seen from the evidence of D.W. 5 that she was not personally aware of the alleged misappropriation. According to her, it is D.W. 4 who told her that P.W. 4 had misappropriated. Now if we turn to the testimony of D.W. 4 we will find that it is too difficult to act on his testimony. We have just now pointed out as to how his evidence is unworthy of acceptance. It is rather surprising that D.W. 1, who is an employee under D.W. 5 drawing a salary of Rs. 500 was able to amass much fortune as conceded by him in the course of cross-examination. The evidence recorded on 16-9-1971 shows that besides several investments in the name of his daughter and his wife he is owning a bus and a bungalow in the city of Madras opposite to Grama Vidyodaya. According to him he purchased the bungalow for Rs. 49000 while a bus for Rs. 35000. Besides he owns a house in Chittoor. Further he owns a lorry since 1965. He is now an income-tax assessee. We would also like to point out that his evidence as regards the alleged agreement between him and P.W. 1 whereby P.W. I agreed to execute the sale deed is but false. Above all D.W. 5 admitted that P.W. 4 was in her service for 18 years and till the alleged misappropriation she had no complaint whatever to make against P.W. 4. He had further referred to the fact that it is D.W. 4 who negotiated and finalised the sale under Ex. B 35 to the second respondent. It is, therefore, that we characterised. him as an archvillain. Therefore, we do not hesitate to reject the testimony of D.W. 4 as unworthy of credence. D.W. 1 is Also one of the attestors to Ex. B. 2. His testimony is that at about 4.30 p.m. on the date of execution, P.W. 4 and D.W. 4 took him to the house. He could remember the document having been read over, that when he signed P.W. 3 had already signed as a witness and that he did not know others who had signed. He would say in chief examination that P.W. 4 telephoned to him at about 11 a.m. on that day and asked him to go over to Gingee to collect the lorry dues due to him. He would also add that when he asked about P.W. 4 and D.W. 4 about lorry matter, he was informed that it would be settled in about a week after selling the lorry to another person. It is rather difficult to accept his evidence because it was suggested to P.W. 4 that he ever phoned to D.W. 1 on that day representing that he was having the cash ready to discharge the lorry dues and because it,is highly improbable that P.W. 4 would have phoned like that when, in fact, the lorry was not sold by them and he had no funds either. 29. D.W. 2 has not spoken to about Ex. B2. Therefore, his evidence will be of no use to the defence. 30. D.W. 3 is the scribe, but he is still working under the first respondent. It is not elicited from him that he is a document writer or well versed with such talents. Further, D.W. 4 would state that Sarangapani used to write documents. Why Srinivasan was chosen for Ex. B6 remains unexplained. The probability is that D.W. 4 would not like more persons to be brought into the scene. Even according to D.W. 3 he only acted under instructions of D.W. 4 but not under instructions of the first respondent. While D.W. 3 would state that the draft prepared by him was destroyed by him after Ex..132 was prepared, the evidence of P.W. 4 is that the draft is not with him. A reference to Ex. B2 shows that a sum of Rs: 3247.49 was undertaken to be paid by the first respondent purchaser to the appellant's mortgagee, namely, Tindivanam Co-operative House Mortgage Bank. Both D.W. 4 and D.W. 5 by P.W. 4. The description of the property in Ex. B2 refer to 4 boundaries, the measurements, municipal door Number ward number and survey numbers. These particulars, as already stated, were furnished by P.W. 4 from memory. The suggestion put at the instance of the appellant is that they got the particulars from the mortgagee bank and P.W. 4 could not have given such particulars from memory. We prefer the stand taken by the appellant to the evidence of D.W. 4 and D.W. 5 because it is too difficult to belive that P.W. 4 was able to carry all the particulars in his memory and also the figure due to the Co-operative Bank to the last pie. Thus, in our, view, the evidence of D.W. 4 is not only interested but is equally unsatisfactory to commend acceptance. We had already discussed the evidence of D.W. 4 and D.W. 5. Thus, a fair assessment of the evidence of D.Ws. 1 to 5 would go to show that there is no consistency in the defence on vital matters such as whether P.W. 4 is the real owner and P.W. 1 is the ostensible owner of the suit property and what really persuaded P.W. 1 to convey her property for her husband's alleged defalcation. In short, the evidence of D. Ws. do not carry conviction to us.

30A. The consequence is that the appellant's case appears to be nearer the truth. There are also additional circumstances which would fortify our conclusion. When Ex. B2 came to be executed on 17-7-1965 it was registered only on 20-7-1965 while Ex.A34 was registered on 20-4-1966. Secondly, the first respondent would expect the court to believe that notwithstanding no threat of prosecution or other criminal proceedings against P.W. 1, both P.W. 1 and P.W. 4 volunteered to execute Exs. B6 and Bl and that P.W. 4 voluntarily sold his lorry to discharge the balance duo in respect of his embezzlement. It is interesting to note that even the learned Judge of this court had observed that "he (D.WA) would have made it clear that P.W. 4 might have handed over to the police or prosecution with regard to the misappropriation and the only way of avoiding that was by making good the amount misappropriated and naturally P.W. 4 would have offered to make good the amount by executing the sale of the house as Well as the sale of the lorry and executing the bond or the balance." We will have to reiterate that that would have been in the natural and ordinary course of events if really it was found out by D.W. 4 and was made known to D.W. 5 that P.W. 4 had misappropriated to the tune of Rs. 25000. Yet the defence would not fairly accept that stand. In our opinion, it is not unlikely that D.W. 4 and D.W. 5 are not prepared to concede the factual position lest it should be complained that Ex. B2 would offend S. 23 of the Contract Act or might support the appellant's case of undue influence and coercion. How are we then to accept the, defence when it turns out that they had I 'impressed deliberately certain events that had really taken place. We had already pointed 'cut that all the possessions of P.W. 1 and PW. 4 were stripped off in the process of alleged reparation. P.W. 1 was asked to sell the house, P.W. 4 was asked to dispose of his lorry, the insurance amount in respect of that lorry was also appropriated by the first respondent through D.W. 4 and for the balance due Ex. B1 was taken from P.W.1 and P.W. 4. It is very hard to believe that all these transactions were volunteered by P.W. 1 and P.W. 4. P.W. I had a big family to be maintained and unless there had been a pressure brought to bear on P.W. 1, she would not have voluntarily parted with her only property. P.W. 1 case is that both her husband and D.W. 4 were in a position to dominate her will and used that position to obtain an unfair advantage over her by taking Ex. B2. She and also her- husband was threatened to be put behind the bars. The evidence of P.W. 1 that she is an illeterate and could only sign her name is not challenged in the course of cross examination. So too she had spoken that the contents of Ex. B6 were read over to her. There is also ample evidence that she first refused to sign but only after the threat by D.W. 4 did she execute Ex. B2. When she stated in re-examination that the property was worth Rs. 15,000/, in 1965 and though there was subsequent cross-examination her statement about valuation was not challenged. It may be interesting to notice, at this stage, the testimony of D.W. 5. According to her, she did not ascertain the value of the suit property. Even D.W. 4 had simply stated (Matter in vernacular omitted - Ed.) What is its market value is not spoken to by D.W. 4. The facts, which fell for consideration by the Privy Council in Tungabai v. Yeshwant Jog MANU/PR/0003/1944 are, on all fours, or identical to the facts in the present case save the difference that in that case the wife was found to be submissive while in the instant case there is definite evidence 'that the wife was coerced to execute Ex.B2 under threat of being arrested. It is fairly established from the evidence in this case that on the one side P.W. 4 was urging P.W. 1 to execute Ex. B2 taking advantage of his status as her husband. In other words, P.W. 4 had the real authority over her to induce P.W. I to execute Ex. B2, while on the other hand, under threat of sending her to jail D.W. 4 had apparent authority over P.W. 1. But for such authority being exercised both by P.W. 4 and D.W. 4, P.W. 1would not have voluntarily executed Ex.B 2. From our assessment of the evidence we have no hesitation to conclude that the transaction is unconscionable. If P.W. 1 was asked to forgo her property for the sake of her husband and if in consideration therefore, the husband was once and for all relieved from the predicament in which he was placed by virtue of the alleged defalcation, it is possible to contend that the transaction B2 is not unconscionable. But in this case it is admitted that P.W. 1 was not called upon to forgo her property but also to execute Ex. BI promissory note for the balance. In addition there to, P.W. 4's lorry was sold. These circumstances will go a long way to suggest strongly that all these transactions are but unsconscionable. We may add that D.W. 4 had only acted as D.W. 5's -agent in all these transactions and therefore, the first respondent cannot escape from the undue influence practised by D.W. 4 on P.W. 1. From the foregoing assessment, we find that the appellant had succeeded in establishing that that D.W. 4 and P.W. 4 were not only in a position to dominate her will but also brought about Ex. B2 transaction which both on the evidence and on the face of it not only appeared to, be unconscionable but was actually proved to be so. In other words, the first respondent did not, discharge the onus that was on her by virtue of S. 16(3) but also miserably failed to adduce evidence to rebut such a statutory presumption. 31. The only, other point to be adverted to, is the issue whether the appellant could be held liable under Ex. B1 promissory note. Ex. B 1 is admittedly executed for the balance due in respect of Rs. 24858.74 said to have been misappropriated by P.W. 4. It is sighed not only by P.W. 4 but also by P.W. 1. When Ex. B2 was found to be voidable because of undue influence and coercion brought to bear on P.W. 1 by P.W. 4 and D.W. 4 it would

automatically follow that Ex. B1 cannot be enforced as against P.W. 2. Further, so far as P.W. 1 is concerned, Ex. B is not supported by consideration. Both P.W. 1 and -P.W. 4 would depose that at the time they signed on the stamp in Ex. B1 it was blank. P.W. 4 also added that had he known that it was a promissory note, he would not have subscribed his signature to it. it is attested by P.W. 3 and. D.W. 2. P.W. 3 also stated that at the time he signed as a witness the contents therein were not written. For the reasons already stated, we do hold that Ex. B1 was not executed by P,W. 1 voluntarily. If so, she cannot be held liable under Ex. B1. 32. The result is that these appeals succeed; the judgment and decree of the learned single Judge. are set aside and those of the trial Court restored only as regards the appellant with costs here and in A.S. 843 of 1971. Advocate's fee one set. 33. This matter having been set down for being mentioned this court made the following Order : - At the time when the judgment was rendered, we have not provided for any directions as regards payment of court-fee, since the appeals have been presented by the appellant as an indigent person. The appellant has succeeded in the appeals. Accordingly, we direct the legal representatives of the first respondent in these appeals to pay the court fee due to Government in the L. P. Appeals. 34. L. P. Appeals allowed.

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