The profession of lawyer and that of a doctor stand on equal footing as both are professionals and so is the lawyer's office and that of doctor's clinic/dispensary or even a pathology lab. The building in question is recognized by the respondents themselves partial as residential in nature, therefore the portion of the doctor's clinic/dispensary or lab situate therein would be a part of the residential premises. The area has also been notified by the Jhansi Development Authority as residential in nature. In short, the clinic/dispensary or laboratory is being run from a residential area and the portion would not be covered by commercial establishment or shop within the meaning of Sub-section (4) and 16 of Section 2 of the Adhiniyam and its market value is not determinable as a commercial building as provided under Rule 2 (d) of the Rules. In view of the aforesaid facts and circumstances, I hold that the authorities below have erred in treating the ground floor portion of the building in question to be commercial in nature for the reason that at one point of time a doctor's clinic or a pathology lab was being run from there. It is a part of a residential building.

HIGH COURT OF JUDICATURE AT ALLAHABAD 

A F R

Writ Petition No. 16843 of 2011

Satya Prakash Singh and another Petitioners

Vs.
State of U.P., and Others Respondents

Hon'ble Pankaj Mithal,J.

Petitioners are purchasers of two storied building vide registered sale deed dated 16.2.2009 for a sale consideration of Rs. 40 lacs, but for the purposes of payment of stamp duty petitioners disclosed its market value as Rs. 75lacs and paid stamp duty accordingly.
The authorities under the Indian Stamp Act, 1899 (hereinafter referred to as an 'Act'), on the report of the Sub-Registrar dated 19.2.2009 drew proceedings under Section 47-A of the Act for determination of deficiency in stamp duty, if any.
The Additional District Magistrate (for short ADM) inspected the property on 25.8.2009. On the basis of the above inspection and the report of the Sub-Registrar the authorities held that the property is partly in commercial use and partly is of residential nature. Accordingly, the market value of the ground floor portion of the building was assessed by treating it to be commercial for the reason it happened to be a clinic of a doctor and that of the first floor to be residential in nature. Thus, deficiency in stamp duty was determined and an equal amount of penalty was imposed. Both the amounts were directed to be recovered with interest @ 12.5% per mensum.
It is against the aforesaid two orders determining the deficiency in stamp duty and imposing penalty that the petitioners have invoked the writ jurisdiction of this Court under Article 226 of the Constitution of India.
I have heard Sri S.K. Chaturvedi, learned counsel for the petitioners and Sri Nimai Das, learned Standing counsel for the respondents and with their consent proceeds to decide the petition finally on the basis of the pleadings exchanged.
There is no dispute that the property was inspected by the ADM himself on 25.8.2009 in the presence of petitioner no. 1 and the Lekhpal of the area. A sketch map of the location of the property was prepared and placed on record showing shops in vicinity to the ground floor of the building in question. The said inspection was made at the insistence of the petitioners and in their presence. Therefore, the map prepared on the inspection can not be discarded simply for the reason that it is not accompanied by any narrative or a report when the inspection was made by the authorized officer himself in accordance with Rule 7 of the Uttar Pradesh (Stamp Valuation of Property) Rules, 1997. However, the said inspection map is not conclusive of the fact that the ground floor portion happened to be a commercial establishment or that it existed in a commercial area.
It has been stated in the writ petition that under the master plan of the Jhansi Development Authority the area where the building is located has been notified as residential area and therefore no part of the building can be treated as commercial. The averments to this effect made in the writ petition have not been denied by the respondent in the counter affidavit. Therefore, the Court is left with no option but to treat the area as residential in nature.
In the above facts and circumstances the solitary question which arises for consideration is whether the ground floor portion of the building situated in a residential locality and which at one time was being used as a clinic or a pathology laboratory by the Doctor son of the erstwhile owner would be assessable to market value as a commercial property for the purposes of realizing stamp duty on the aforesaid sale deed.
Commercial property has not been defined under the Act but the Rules in Section 2 (d) explains "commercial building" as a commercial establishment or a shop as defined under Section 2 (4) and (16) respectively of the U.P. Dukan and Vanijya Adhisthan Adhiniyam, 1962 (hereinafter for short 'Adhiniyam').
In view of the above definition of the commercial building, property which is covered by the definition of commercial establishment or shop as contained in Section 2(4) and (16) respectively of the Adhiniyam alone shall be assessable to market value as commercial building. Section 2 (4) of the Adhiniyam defines commercial establishment to mean any premises, not being the premises of a factory, or a shop, wherein any trade, business, manufacture, or any work in connection with, or incidental or ancillary thereto, is carried on for profit and includes a premises wherein journalistic or printing work, or business of banking, insurance, stocks and shares, brokerage or produce exchange is carried on, or which is used as theater, cinema, or for any other public amusement or entertainment or where the clerical and other establishment of a factory, to whom the provisions of the Factories Act, 1948, do not apply.
The above definition of the 'commercial establishment' can be put in a simplified manner to mean:-
i) Any premises or a shop wherein any trade, business, manufacture is carried on or any work in connection with, or incidental or ancillary thereto is carried on for profit;
ii) Such premises includes a premises wherein journalistic or printing work, or business of banking, insurance, stocks and shares, brokerage or produce exchange is carried on;
iii) Premises which is used as theater, cinema or for any other public amusement or entertainment.
iv) Any premises where clerical or other establishment of a factory to whom the provisions of Factories Act, 1948 do not apply. It excludes premises of a factory.

The ground floor portion of the building in question is certainly not covered by clause (ii) (iii) and (iv) above of the definition of the commercial establishment as referred to above.
Section 2(16) of the Adhiniyam defines 'shop' to mean any premises where any wholesale or retail trade or any business is carried on, or where services are rendered to customers and includes all offices, godowns or warehouse, which are used in connection with such trade or business.
The ground floor portion of the building is not a godown or a warehouse and to that extent would not be covered by the definition of the shop.
Now the issue is whether the ground floor portion of a building in a residential locality which at one time was used as a clinic/dispensary/pathology laboratory by a doctor would be a premises, shop or office where any trade either retail or wholesale or business is said to be carried or services are being rendered to customers.
The work of a Doctor, Chartered Accountant or a Lawyer or as a matter of fact any consultant is a profession which is distinct from any trade or business. Generally, profession is an activity which is carried by an individual by his personal skill, intelligence depending upon his character. It is not in the nature of any trade or business. It is a vocation or occupation requiring special, advance education, knowledge and skill predominantly of an intellectual nature rather than physical or manual.
The Supreme Court had an occasion to consider the nature of the activity of a private dispensary run by a a doctor vis-a-vis the definition of 'commercial establishment' contained in Section 2 (4) of the Bombay Shops and Establishment Act, 1948 which is para-materia to the definition of commercial establishment contained in Section 2 (4) of the Adhiniyam. Their Lordship's of the Supreme Court after in depth consideration of the matter held that the activity of a doctor is a profession and is not a commercial activity and therefore a private dispensary of a doctor is not a 'commercial establishment'.
A similar controversy arose before the Supreme Court in connection with lawyers office. The Supreme Court in considering the definition of commercial establishment as appearing in Section 2(4) of the Kerela Shops and Establishments Act went on to hold that office of lawyers or a firm of lawyers is not a commercial establishment within the meaning of the Act, as lawyers do not carry a trade or business nor do they render services to the customers.
In another case before the Supreme Court, the M.P. Electricity Board charged the Advocate with electricity tariff applicable to non domestic users by treating his office as a commercial activity. The Madhya Pradesh High Court held that the legal profession does not involve any commercial activity and therefore the rate applicable to commercial consumers can not be applied to a lawyer's office. The matter was taken up before the Supreme Court and the Supreme Court disagreeing with certain observations made in an earlier decision in the case of New Delhi Municipal Counsel Vs. Sohan Lal Sachdeva dead (2000) 2 SCC 494 referred the matter to a larger Bench.
The larger Bench of the Supreme Court vide judgment and order dated 27.10.2005 held that advocate running his office from his residence can not be charged additional tariff on commercial basis. However, in case office is run by him from an independent and commercial place, then he can not be exempted from the commercial tariff. Thus, a distinction was made between the office of a lawyer situate in a residential area or in a residence and the office situate in a commercial place.
The profession of lawyer and that of a doctor stand on equal footing as both are professionals and so is the lawyer's office and that of doctor's clinic/dispensary or even a pathology lab. The building in question is recognized by the respondents themselves partial as residential in nature, therefore the portion of the doctor's clinic/dispensary or lab situate therein would be a part of the residential premises. The area has also been notified by the Jhansi Development Authority as residential in nature. In short, the clinic/dispensary or laboratory is being run from a residential area and the portion would not be covered by commercial establishment or shop within the meaning of Sub-section (4) and 16 of Section 2 of the Adhiniyam and its market value is not determinable as a commercial building as provided under Rule 2 (d) of the Rules.
In view of the aforesaid facts and circumstances, I hold that the authorities below have erred in treating the ground floor portion of the building in question to be commercial in nature for the reason that at one point of time a doctor's clinic or a pathology lab was being run from there. It is a part of a residential building.
Accordingly, a writ of certiorari is issued quashing the impugned orders dated 10.3.2011 and 29.5.2010 passed by the Commissioner, Jhansi Division, Jhansi and Additional Collector respectively.
The writ petition is allowed. No costs.

Dated: 29.5.2012
SKS 

a conditional Hiba is valid - while gifting two other house properties to each of his two sons, the suit schedule property was gifted by Sharfuddin to his wife Mahboob Bee for her life time maintenance and for her protection as well as to his two sons together.The Privy Council in Nawazish Ali Khan Vs. Raza Khan (1st supra) succinctly stated that gifts of the usufruct (ariyat) is recognized under Muslim law and such gift is not a gift of corpus. Further there was no necessity for the donor to write the names of his two sons also while making the gift to his wife Mahboob Bee if really corpus was gifted to late Mahboob Bee. The trial Court has completely missed the aforesaid aspect and proceeded on the footing as if it is a gift of corpus to Mahboob Bee. It is no doubt true that if any condition is attached to a gift of corpus, which runs inconsistent with or in derogation of gift, such condition is held to be void as per Section 164 of the Mulla's Principles of Mahomedan Law. To my mind, a fair reading of the document Ex.B1 with the help of translations on record, shows that the gift deed-Ex.B1 in respect of suit schedule property was in two parts, while usufruct was gifted to Mahboob Bee, the corpus was gifted to both of his sons. When once we reached to the conclusion that the gift to Mahboob Bee was only of usufruct and not corpus, Section 164 of the Mulla's Principles of Mahomedan Law by itself will have no application to the facts of the present case. Consequently after the death of Mahboob Bee on 20.6.1988, the suit schedule house stands gifted to both the sons, each having an equal share. The conclusion of the trial Court that there was no Matruka property left by Mahboob Bee is, therefore, unsustainable. Equally inconsequential the further contention of the defendants that Mahboob Bee exercised her right and sold the property to D.W.2 under Ex.B3. Once it is found that Mahboob Bee had only life interest and was entitled to the usufruct only for her life sustenance, it cannot be said that she had a right to alienate the property. As noticed above, Mahboob Bee died on 20.6.1988 and the present suit for partition was filed on 11.2.1993 within about five years of her death. Once the plaintiff is held to be entitled to seek a decree for partition, any unauthorized alienation made by Mahboob Bee has to yield to the said partition. It is not necessary for the plaintiff to separately question the alienation made by Mahboob Bee under Ex.B3 in favour of D.W.2. In my view, therefore, the points 1 and 2 deserve to be answered in favour of the plaintiffs/appellants and consequently the judgment of the trial Court is liable to be reversed. 16. Accordingly the appeal is allowed, the judgment and decree passed by the trial Court are set aside and the suit filed by the plaintiffs/appellants shall stand decreed as prayed for. No costs.

THE HON'BLE SRI JUSTICE VILAS V. AFZULPURKAR        
C.C.C.A.NO. 69 of 2001

31-05-2010

Abdul Khader (died) and others

Muzaffaruddin (died) and others

Counsel for appellants: Mr. K. Prathap Reddy

Counsel for Respondents: Mr. Basith Ali Yavar

:JUDGMENT:

1.      Plaintiffs in OS.No. 147 of 1993 on the file of the VI-Addl. Senior Civil
Judge, City Civil Court, Hyderabad are the appellants. They filed the said suit
seeking to pass a preliminary decree for partition and separate possession in
respect of Matruka property bearing H.No. 17-1-238 to 241, admeasuring 1640 sq.
yards situated at Hat Mama Bhaktawar, near Santhoshnagar colony, Hyderabad. The
suit was dismissed under the impugned judgment and decree dated 30.11.2000. The
parties are referred to as they are arrayed in the suit.
2.      The facts, which are borne out by the record, are as follows,
        The original plaintiff and the defendants 1 to 4 are brothers being the
sons of late Sharfuddin and late Mahboob Bee. Late Sharfuddin was the owner of
the suit house bearing No. 17-1-238 to 241 as well as other two houses, with
which we are not concerned in this suit. It is alleged in the plaint that late
Sharfuddin executed a gift deed dated 3.9.1953 whereby the suit schedule house
was gifted to his wife Mahboob Bee, out of love and affection and for the
services rendered by her, and towards her life maintenance. The other two houses
were exclusively gifted to the first plaintiff and the first defendant.
Sharfuddin died on 11.1.1966, whereas his wife Mahboob Bee died on 20.6.1988.
The plaintiff, therefore, alleges that after the death of Mahboob Bee, the life
interest created for Mahboob Bee with respect to the suit schedule house came to
an end and thereby the first plaintiff and the first defendant are entitled to
equally share the Matruka property. The plaintiff alleges that on 1.2.1993 he
demanded the defendants to make partition of the suit schedule house and for
separate possession and as the same having been denied, the present suit was
filed for partition and separate possession, on 11.2.1993.
3.      The defendants 1 to 4 resisted the suit by filing their written statement
claiming that under the registered gift deed dated 3.9.1953 Mahboob Bee became
exclusive owner of the suit schedule house and under the same document the first
defendant was exclusively gifted another house bearing H.No. 17-1-385 to 387.
It is further alleged that Mahboob Bee during her life time executed a
registered sale deed dated 27.8.1970 in favour of wife of first defendant and as
such there is no Matruka property left by her, when she died on 20.6.1988.  It
is alleged that the plaintiff being aware of the sale made by Mahboob Bee in
favour of wife of first defendant, did not challenge the same and only in the
year 1993 he filed the present suit for partition suppressing the said sale.
4.      The original plaintiff and the first defendant died pending the suit and
the plaintiffs 1 to 6 are the legal heirs of original plaintiff, whereas the
defendants 9 to 29 were impleaded as legal heirs of first defendant.
5.      The plaintiff No.3 examined himself as P.W.1 and a close relative of the
plaintiff as P.W.2. Similarly the defendant No.24 was examined as D.W.1 and the
defendant No.9 as D.W.2 who is the wife of first defendant. On behalf of the
plaintiff, Exs.A1 to 7 were marked and crucial document among them is Ex.A6-
copy of registered gift deed executed by late Sharfuddin dated 3.9.1953 which is
in Urdu and the English thereof was marked as Ex.A7. The defendants also filed
and marked original gift deed as Ex.B1 which is in Urdu and its English
translation as Ex.B2. The registered sale deed dated 27.8.1970 under which D.W.2
purchased the suit house is marked as Ex.B3 and English translation thereof is
marked as Ex.B4. The trial Court framed the following issues,
(1) Whether the plaintiff is entitled for preliminary decree for partition and
separate possession of the suit property?
(2) Whether the suit property is not Matruka property of late Mahboob Bee and
not liable for partition as contended by the defendants 1 and 2?
(3) To what relief?

The trial Court came to the conclusion that the translations of Ex.A7 and Ex.B2
do not tally with each other and as per Ex.B2-the translation, there is no life
interest created in late Mahboob Bee. The trial Court also held that even if any
conditions or restrictions are placed on Mahboob Bee, as a donee under Ex.B1,
based upon Section 164 of the Mulla's Principles of Mahomedan Law, the said
condition is void and thereby Mahboob Bee acquired an absolute interest in the
said gifted property i.e., the suit schedule property. The trial Court also held
that since late Mahboob Bee sold the said house to D.W.2 under Ex.B3, the
plaintiff is not entitled to claim that there is any Matruka property left by
late Mahboob Bee and consequently the suit was dismissed.
6.      In this appeal Sri K. Prathap Reddy, learned senior counsel appearing for
the plaintiffs/appellants contended that the trial court's findings are perverse
and contrary to the record and suffer from misreading of Ex.B1. He also
submitted that under Mohammedan Law there is no prohibition for gifting of the
usufructs while making a gift.  He submits that Mohammedan Law recognizes the
principle that a property can be gifted to a donee by reserving the usufructs
either in the donor or gifting the usufructs alone to a donee. The learned
senior counsel submits that Section 164 of the Mulla's Principles of Mahomedan
Law, relied upon by the trial Court, is misapplied to the present case by
thinking as if there is a gift of corpus and he fairly submits that even if
Ex.B1 is treated as a gift of corpus so far as Mahboob Bee is concerned, and if
there is any condition for restriction on it's enjoyment by the donee, to that
extent, the condition would become void, however that is not the case at present
and a fair reading of Ex.B1-gift deed clearly shows that Sharfuddin intended to
gift life interest only to Mahboob Bee and as such the gift is clearly valid.
He relied upon a decision of the Privy Council reported in Nawazish Ali Khan Vs.
Raza Khan 1 as well as on the decision of a Division Bench of this Court
reported in Shaik Mastan Be and others Vs. Shaik Bikari Saheb and others 2.
7.      Sri Basith Ali Yavar, learned counsel appearing for the respondents
submits that Ex.B1-gift deed is clear and unambiguous, inasmuch as the intention
of the donor was clear from the fact that out of three houses referred to in
Ex.B1, he gifted one house to his wife Mahboob Bee and one house each to his
both sons i.e., the first plaintiff and the first defendant. The learned counsel
also states that there is nothing in Ex.B1 to indicate that only life interest
was gifted to late Mahboob Bee. He, therefore, submits that any recital in the
gift deed putting restriction on the enjoyment of the property by Mahboob Bee
would be rendered void to the extent of such restriction. The learned counsel
submits that the trial Court has rightly appreciated the said fact that during
her life time itself Mahboob Bee sold the suit schedule house to D.W.2 and the
plaintiff never objected nor instituted any proceedings questioning the same.
The learned counsel, therefore, supported the trial Court's judgment and
contended that the suit is not maintainable as the sale deed-Ex.B3 in favour of
D.W.2 is not challenged in the suit.
8.      While hearing of this appeal, I found that there are two translations of
Ex.B1. While Ex.B1 is original document in Urdu, Ex.A6 is a copy of Ex.B1. Ex.A7
is English translation of Ex.B1 filed by the plaintiff along with Ex.A6, whereas
Ex.B2 is the English translation of Ex.B1 filed by the defendants along with the
original document-Ex.B1. Since there is a variation in the said two English
translations, the trial Court has chosen to follow Ex.B2-English translation,
while interpreting Ex.B1-gift deed. During the hearing of this appeal, when I
was confronted with these two contradictory translations, I requested both the
learned counsel to prepare an agreed translation of Ex.B1. The learned counsel
for the respondents has filed an English translation of Ex.B1, which was not
accepted by the learned counsel for the appellants. Thereupon, I directed the
Registry to get Ex.B1 translated through Translation and Printing Department of
the High Court and it was accordingly prepared and examined by both the learned
counsel who have made detailed submissions in the appeal, as briefly mentioned
above. Thus the problem relating to true translation mentioned above is required
to be resolved. As mentioned above, though there was oral evidence led by both
the parties, but controversy centers around the true and correct interpretation
of Ex.B1, dated 3.9.1953 and both the learned counsel rightly did not place any
reliance on the said oral evidence and have concentrated primarily on Ex.B1 and
the meaning it conveys.
9.      The questions, therefore, that fall for consideration are (1) the effect
of purport of Section 164 of Mulla's Principles of Mahomedan Law? and (2)
whether Ex.B1-gift deed falls within the provisions of the said Section 164?
10.     Section 164 of Mulla's Principles of Mahomedan Law reads as under,
        "164. Gift with a condition,- When a gift is made subject to a condition
which derogates from the completeness of the grant, the condition is void, and
the gift will take effect as if no conditions were attached to it (s)."
     
The Muslim personal law relating to gifts was very elaborately considered by the
Privy Council in Nawazish Ali Khan Vs. Raza Khan (1st supra) and it will be
useful to extract the paragraphs 19 and 21 of the said judgment for the purpose
of appreciating the issued involved,
"19......... In their Lordships opinion this view of the matter introduces into
Muslim law legal terms and conceptions of ownership familiar enough in English
law, but wholly alien to Muslim law. In general, Muslim law draws no distinction
between real and personal property, and their Lordships know of no authoritative
work on Muslim law, whether the Hedaya or Baillie or more modern works, and no
decision of this Board which affirms that Muslim law recognises the splitting up
of ownership of land into estates, distinguished in point of quality like legal
and equitable estates, or in point of duration like estates in fee simple, in
tail, for life, or in remainder. What Muslim law does recognise and insist upon,
is the distinction between the corpus of the property itself (ayn) and the
usufruct in the property (manafi). Over the corpus of property the law
recognises only absolute dominion, heritable and unrestricted in point of time;
and where a gift of the corpus seeks to impose a condition inconsistent with
such absolute dominion the condition is rejected as repugnant; but interests
limited in point of time can be created in the usufruct of the property and the
dominion over the corpus takes effect subject to any such limited interests.
...........
This distinction runs all through the Muslim law of gifts - gifts of the corpus
(hiba), gifts of the usufruct (ariyat) and usufructuary bequests. No doubt where
the use of a house is given to a man for his life he may, not inaptly, be termed
a tenant for life, and the owner of the house, waiting to enjoy it until the
termination of the limited interest, may be said, not inaccurately, to possess a
vested remainder. But though the same terms may be used in English and Muslim
law, to describe much the same things, the two systems of law are based on
quite" different conceptions of ownerships. English law recognises ownership of
land limited in duration; Muslim law admits only ownership unlimited in
duration, but recognises interests of limited duration in the use of property.
................
Their Lordships think that there is no difference between the several Schools of
Muslim law in their fundamental conception of property and ownership. A limited
interest takes effect out of the usufruct under any of the schools. Their
Lordships feel no doubt that in dealing with a gift under Muslim law, the first
duty of the Court is to construe the gift. If it is a gift of the corpus, then
any condition which derogates from absolute dominion over the subject of the
gift will be rejected as repugnant; but if upon construction the gift is held to
be one of a limited interest the gift can take effect out of the usufruct,,
leaving the ownership of the corpus unaffected except to the extent to which its
enjoyment is postponed for the duration of the limited interest."

11.     In a decision of this Court reported in Shaik Mastan Be and others Vs.
Shaik Bikari Saheb and others (2nd supra) a similar question was considered and
it was held that the intention of the donor has to be ascertained from the
document as to whether he intended to gift only life time interest in the
property to the donee and for that purpose a reading of the entire document is
essential. This Court further held as follows,
"After considering all these cases it is clear that a Sunni under Hanafi
Mohammedan Law cannot without consideration convey ownership of the property
with limitations for the life of the donee. But where the ownership is vested in
somebody and only the enjoyment of the property is conveyed or received, the
rules does not apply. Therefore limitation on the enjoyment of property is
permissible though it is not allowed on ownership. This separate enjoyment is
known as ariat and therefore if the reservations in favour of the donor under
Exhibits B1 and B2 be of this kind, they would be valid.
The passages in Exhibits B1 and B2, which persuade us to hold their having
conveyed immediate rights in the donees can be shortly stated. The relevant part
of Exhibit B1 reads as follows:-
"I have ...........conveyed to you under dakhal the hereunder schedule mentioned
immovable property...............belonging to me and created rights to your in
the property now itself".
Similarly, the relevant passage in Exhibit B2 reads thus:-
"I have......conveyed to you under dakhal the hereunder schedule mentioned
immovable property.........belonging to me and created rights to you in the
property now itself".
In our opinion, the intention indicated by these parts in the two documents is
that the donees were being then vested with the rights, which the owner had.
Therefore, what the donor preserved for herself was the retention of the
properties which, according to the later passages in the documents were for
enjoying the produce till her life-time. Mastan Bi, in her cross-examination as
P.W.1, admits that the 1st defendant and farm servants plough the lands and that
the 3rd defendant was paying the kist. She further admits that she herself had
not leased the lands to other persons. Also Madhav Rao, D.W.1 states that the
1st defendant was cultivating the lands. D.W.2 who is the 3rd defendant swears
that the 1st and the 2nd defendants were in possession of 8 1/2 acres. Exhibits
B9 and B10 are certified copies of the application for transfer of pattas in
favour of the donees. Exhibits B5 to B8 are abstracts of cultivation accounts
for Faslis 1358, 1359, 1360 and 1361 respectively showing that defendants Nos. 1
to 3 were in possession of Survey No. 110.  In addition, Exhibit B11 shows the
1st defendant as having raised tobacco on acre 1-50 cents in 1950-51. In these
circumstances, we have no doubt that Mastan Bi conveyed ownership of the
properties, which she got from her brother to her nephew and niece on the dates
of Exhibits B1 and Exhibit B2 and also delivered possession to the donees. It is
equally clear that she reserved only rights in the usufructs for herself during
her life, because she had in both the documents stipulated that she shall not
effect any alienation and create any right and interest in respect of the
property in any manner during her life. Then Mastan Bi in her cross-examination
as PW.1 admits that if the 1st and 2nd defendants maintain her, they should
enjoy the property. That was the arrangement. It follows that the donor reserved
to herself enjoyment of the produce of the properties and vested ownership in
the donees. That beding the nature of the arrangement. It follows that the donor
reserved to herself enjoyment of the produce of the properties and vested
ownership in the donees. That being the nature of the arrangement, the
limitation on the produce being enjoyed for life-time, would not be void".

12.     In the light of the above legal position, if we consider Ex.B1 with the
help of its translations on record, the following position emerges. As per Ex.A7
the relevant recitals are as follows,
"............Since I have reached the age of my normal life, and there is no
guarantee of life, as such I wish to gift with possession these houses, out of
natural love and affection and in lieu of obedience and for purposes of welfare
and life-time maintenance of my wife, Smt. Mahboob Bi, in favour of my own two
sons Sri Abdul Qadar, age (35) years and Muzaffaruddin, age (24) years,
excepting them there is no other lawful heir to me. That I have the full right
and authority to gift the above said property. Accordingly the house bearing No.
IIS-9-238 to IIS-9-241 situated at Hat Mama Bakathwar valued O.S. Rs. 150/-
(Rupees One hundred fifty only) is gifted by way of Gift Settlement, in favour
of my wife Smt. Mahboob Bi till her life time and the house No. IIS-9-251 to
IIS-9-253 situated at Hat Mama Bakthawar valued O.S. Rs.150/- (Rupees One
hundred fifty only) is gifted in favour of my son Abdul Qadar and the house No.
I-4-385 to 387 situated at Imliban valued O.S. Rs.200/- (Rupees two hundred
only) is gifted in favour of my son Muzaffaruddin............"

13.     Similarly, as per Ex.B2-translation the relevant portion is as follows,

"..........As I have become old aged and I reached to an age where there is no
hope of my life and death position, therefore, in view of natural love and
faithful services rendered by my wife Smt. Mahboob Bee and my two sons namely
Abdul Quader, aged 35 years, and Muzaffaruddin, aged 24 years, for looking after
me and maintaining me with love and affection and except them nobody is there as
my legal heirs and successors. As such I have full, sole and absolute right to
gift them with possession during my life time, my below mentioned owned and
possessed property, in the manner hereunder, The house bearing Nos. IIS-9-238 to
IIS-9-241 situated at Mama Baqtawar Haat, valued O.S. Rs.150/- in favour of my
wife Smt. Mahboob Bee; the house bearing Nos. IIS-9-251 to IIS-9-253 situated at
Mama Baqtawar Haat, valued O.S. Rs.150/- in favour of my son Abdul Quader; and
the house bearing Nos. I-4-385 to 387 situated at Imlibun valued O.S. Rs.200/-
to and in favour of my another son Muzaffaruddin........"

14.     As per the translation supplied by the Registry of this Court, the
relevant portion is as follows,
".........Since I have become aged, and there is no hope of life, therefore I am
intending to gift with possession of my houses, in view of natural love and
affection and faithful services for purpose of maintenance in favour of my wife
Smt. Mahboob Bee to the extent of this document and two own sons of this
Executant namely Abdul Khader, aged 35 years, and Muzaffaruddin, aged 24 years,
except themselves nobody can be legal heir, in my life time, of which I have
complete rights. Therefore, duly obtaining legal opinion having gifted away with
possession the house bearing Nos. IIS-9-238 to IIS-9-241, situated at locality
Hatt Mama Bakhtawar, value Rs.150/- O.S. (Osmania Sikka), to the extent of this
document in favour of this executant's wife Smt. Mahaboob Bee, house bearing No.
IIS-9-251 to IIS-9-253 situated at locality Hatt Mama Bakhtwar, valued Rs.150/-
O.S. in favour of this executant's son Abdul Khader, house bearing No. I-4-385
to 387, situated at locality Imli Ban, valued Rs.200/- O.S. in favour of this
Executant's son Muzafaruddin......."

15.     A conjoint reading of all the translations of Ex.B1 shows that Sharfuddin
had recorded natural love and affection as well as services rendered by his wife
and gifted the house property to her for making provision for her life time
maintenance. The translations of Exs.A7 and B2 are similar to that extent,
except the word 'life time maintenance' is missing in Ex.B2-translation. The
translation supplied by the Registry specifically states that apart from the
natural love and affection, faithful services, 'for the purpose of maintenance'
the gift was made in favour of Mahboob Bee. The Urdu text used the word
'parvarish' and 'Tajist'. While parvarish means nourishment, sustenance,
protection, patronage, rearing, fostering, upbringing etc., Tajist means, for
the purpose. The said two words, therefore, unmistakably point out that
Sharfuddin wanted to make provision for life time maintenance of his wife and
for her sustenance and in recognition of services rendered by her and out of
natural love and affection, the said gift deed was made. It is also very
striking to note that in all the three translations it is mentioned that the
donor had gifted the suit schedule house to Mahboob Bee as well as to his both
sons viz., Abdul Khader and Muzaffaruddin.  Exs.A7 and Ex.B2-translations show
that the gift was made by Sharfuddin in favour of Mahboob Bee as well as to his
sons. The translation supplied by the Registry also confirms to the same. A
reading of the entire text of Ex.B1-gift deed would unmistakably point out that
while gifting two other house properties to each of his two sons, the suit
schedule property was gifted by Sharfuddin to his wife Mahboob Bee for her life
time maintenance and for her protection as well as to his two sons together. The
Privy Council in Nawazish Ali Khan Vs. Raza Khan (1st supra) succinctly stated
that gifts of the usufruct (ariyat) is recognized under Muslim law and such gift
is not a gift of corpus. Further there was no necessity for the donor to write
the names of his two sons also while making the gift to his wife Mahboob Bee if
really corpus was gifted to late Mahboob Bee. The trial Court has completely
missed the aforesaid aspect and proceeded on the footing as if it is a gift of
corpus to Mahboob Bee.  It is no doubt true that if any condition is attached to
a gift of corpus, which runs inconsistent with or in derogation of gift, such
condition is held to be void as per Section 164 of the Mulla's Principles of
Mahomedan Law.  To my mind, a fair reading of the document Ex.B1 with the help
of translations on record, shows that the gift deed-Ex.B1 in respect of suit
schedule property was in two parts, while usufruct was gifted to Mahboob Bee,
the corpus was gifted to both of his sons.  When once we reached to the
conclusion that the gift to Mahboob Bee was only of usufruct and not corpus,
Section 164 of the Mulla's Principles of Mahomedan Law by itself will have no
application to the facts of the present case. Consequently after the death of
Mahboob Bee on 20.6.1988, the suit schedule house stands gifted to both the
sons, each having an equal share. The conclusion of the trial Court that there
was no Matruka property left by Mahboob Bee is, therefore, unsustainable.
Equally inconsequential the further contention of the defendants that Mahboob
Bee exercised her right and sold the property to D.W.2 under Ex.B3. Once it is
found that Mahboob Bee had only life interest and was entitled to the usufruct
only for her life sustenance, it cannot be said that she had a right to alienate
the property.  As noticed above, Mahboob Bee died on 20.6.1988 and the present
suit for partition was filed on 11.2.1993 within about five years of her death.
Once the plaintiff is held to be entitled to seek a decree for partition, any
unauthorized alienation made by Mahboob Bee has to yield to the said partition.
It is not necessary for the plaintiff to separately question the alienation made
by Mahboob Bee under Ex.B3 in favour of D.W.2. In my view, therefore, the points
1 and 2 deserve to be answered in favour of the plaintiffs/appellants and
consequently the judgment of the trial Court is liable to be reversed.
16.     Accordingly the appeal is allowed, the judgment and decree passed by the
trial Court are set aside and the suit filed by the plaintiffs/appellants shall
stand decreed as prayed for. No costs.

?1  AIR (35) 1948 PRIVY COUNCIL 134
2  1958 II An. W.R. 473

a conditional Hiba reserving life enjoyment is valid - .In general, Muslim Law draws no distinction between real and personal property, and their Lordships know of no authoritative work on Muslim law, whether the Hedaya or Baillie or more modern works, and no decision of this Board which affirms that Muslim law recognizes the splitting up of ownership of land into estates, distinguished in point of quality like legal and equitable estates, or in point of duration like estates in fee simple, in tail, for life, or in remainder. What Muslim law does recognize and insist upon, is the distinction between the corpus of the property itself (ayn) and the usufruct in the property (manafi). Over the corpus of property the law recognizes only absolute dominion, heritable and unrestricted in point of time; and where a gift of the corpus seeks to impose a condition inconsistent with such absolute dominion the condition is rejected as repugnant; but interests limited in point of time can be created in the usufruct of the property and the dominion over the corpus takes effect subject to any such limited interests." Reliance also was placed on the decision of the Privy Council on the decision referred to (2) supra in this regard. In the decision referred to (4) supra, it was held that where property is transferred by way of a gift and the donor does not reserve dominion over the corpus of the property, nor any share of dominion over the corpus but stipulates simply for and obtains a right to the recurring income during his life, the gift and the stipulation are both valid and the reservation of usufruct does not by itself make the gift of the property in question void under Muhammadan law and that applies not only to Shias but also to Sunnis. In fact, the Division Bench of the Madras High Court in this decision had followed the decision of the Privy Council referred (2) supra and also NAWAB UMJAD ALLY KHAN Vs. Mt.MOHUMDEE BEGUM 14. The construction of a gift creating life interest in income of certain land under Muhammadan law had been dealt with in the decision referred (5) supra. In the decision referred to (8) supra, it was held that in the case of a gift to A for life and thereafter to B where there is no compelling language to the contrary, Courts might reasonably construe the gift as a gift of the corpus absolutely to B and of the usufruct to A for life so as to conform to the Muslim Law governing Hiba. In the decision referred to (3) supra where the intention indicated by the documents was that the donees were being then vested with the right which the donor had and thereafter the donor reserved for herself the retention of the properties which according to the later passages in the documents were for enjoying the produce till the donor's life time, by mere use of the word 'life-time' in the documents it cannot be said that the donee intended to convey only vested remainders in favour of the donees and that had that been her intention she would not have applied for transfer of patta in favour of one of the donees nor the gift deeds would have been accompanied with the possession of the property and in view of the language of the gift deeds the gifts in question were held to be valid. Further, reliance also was placed on the decision referred (6) supra. It is no doubt true that certain of the decisions cited are distinguishable on facts. But the question is when absolute rights had been transferred under a gift by a Mohammadan, whether such document will be invalid for the mere reason that the right to enjoy the property is postponed inasmuch as such rights are retained by the donor herself for life ? From the recitals of Ex.A-1, the intention of the donor is clear and categorical to convey absolute rights in favour of the appellant/plaintiff. In fact, while retaining the right to enjoy the income for maintenance, a restriction not to have the right of alienation, also is imposed and this is also suggestive of the fact that what had been conveyed by the donor to the donee under Ex.A-1 are absolute rights in the plaint schedule property and hence the mere fact that there was no delivery of possession in presenti on the date of the document cannot by itself invalidate Ex.A-1. In fact this is the view expressed even by the Privy Council in the decision referred (2) supra. On a careful reading of the decisions referred to supra, it can be seen that no contrary opinion had been expressed in this regard. In the case of passing of absolute rights under a gift by a Muhammadan, the postponment of enjoyment will definitely fall under an exception and on that ground it cannot be said that Ex.A-1 is invalid and this view expressed by me also is in accordance with the view expressed by our High Court in the decision referred to (3) supra and also a Division Bench of the Madras High Court referred (7) supra. It is needless to point out that in the light of the view expressed by me relating to the validity of Ex.A-1, the appellant/plaintiff is entitled to the relief prayed for since the validity of Ex.A-2 and Ex.A-3 will depend upon Ex.A-1 only. Except this Point, no other Points had been urged though relating to the conduct of the parties certain documents like Ex.A-23 and Ex.A-24 had been referred to. Hence, in view of the findings recorded by me relating to the interpretation of Ex.A-1, I am of the considered opinion that the appellant/plaintiff is bound to succeed in this Second Appeal.Accordingly, the Second Appeal is allowed. No order as to costs.

THE HONOURABLE SRI JUSTICE P.S.NARAYANA          
S. A NO.442 OF 1991

 10/07/2001


BEPARI SHAIK PEERAN    

petitioner

KAMALAPURAM MAHABOOB BI        
AND OTHERS  

respondent


COUNSEL FOR THE APPELLANT:  MR. K. SUBRAHMANYAM REDDY                

COUNSEL FOR THE RESPONDENTS: MR. NARASIMHA REDDY              



:JUDGMENT:-  
The unsuccessful plaintiff in the Courts below is the appellant.  The
appellant/plaintiff instituted the suit O.S.No.4/85 on the file of Principal
District Munsif, Proddatur for declaration of title relating to the plaint
schedule property and for recovery of possession and also for future mesne
profits and for costs of the suit.  Since the 2nd defendant died, her legal
representatives were brought on record as defendants 3 to 10 by an order in
I.A.No.233/85, dated 16-8-1985.
On the strength of the respective pleadings of the parties, Issues were settled
and the evidence of PW-1 to PW-6 and DW-1 to DW-4 had been recorded and Exs.A-1    
to A-26 and Ex.B-1 were marked and the Court of first instance after recording
evidence had arrived at a conclusion that the gift deed Ex.A-1 does not satisfy
the third ingredient of delivery of possession under the Muslim law and hence
the said document is not valid and after recording certain other findings also
apart from this finding, dismissed the suit and aggrieved by the same the
unsuccessful plaintiff had preferred A.S.No.1/87 on the file of Subordinate
Judge, Proddatur and the said Appeal also was dismissed and aggrieved by the
same the present Second Appeal is filed.
The real controversy in the present Appeal revolves around   Ex.A-1 - a gift
deed, executed by one Jahara Bi in favour of the appellant/plaintiff relating to
the plaint schedule property.  The principal question which had been argued
elaborately by both the counsel is relating to the validity of Ex.A-1.  Though
in the Grounds of Appeal several questions had been raised and also shown as
substantial questions of law, the only substantial question of law that arises
for consideration in this Second Appeal is as follows:
Whether the gift deed Ex.A-1 executed by a Muslim is invalid merely because the
third ingredient of delivery of possession is not satisfied though she had not
retained any other rights over the domain ?
Sri K.Subrahmanyam Reddy, the learned Senior Counsel appearing on behalf of the
appellant/plaintiff had mainly contended that the findings recorded by both the
Courts below that Ex.A-1 is invalid merely on the ground that the third
ingredient in the case of a gift by a Muslim i.e., delivery of possession is not
satisfied and hence the said gift is invalid, cannot be sustained since except
the right to enjoy the property during lifetime even without right of alienation
nothing more had been retained by the said Jahara Bi and hence the findings
recorded by both the Courts below that the document Ex.A-1 is invalid on the
said ground are totally illegal and unsustainable.  The learned Counsel no doubt
had pointed out to certain other relevant facts also but had mainly concentrated
only on this question and the learned Counsel further while elaborating his
submissions had maintained that if this question is decided, automatically the
appellant/plaintiff is entitled to succeed in the suit, especially in the light
of the peculiar findings recorded by both the Courts below.  The learned Counsel
pointed out to the relevant findings recorded by the Court of first instance and
also the appellate Court.  The learned Counsel further contended that as per the
recitals in Ex.A-1 it is clear that on the date of Ex.A-1 itself absolute rights
had been given away to the appellant/plaintiff, and what had been retained is
the right to enjoy limiting it to only maintenance without even right of
alienation and in the light of these recitals since all the rights had been
transferred except retaining the right of enjoyment, the gift cannot be said to
be invalid.  The learned Counsel also further maintained that when absolute
rights had been given under a gift, necessarily always the ingredient of
delivery of possession need not be satisfied and it is one of the exceptions.
The learned Counsel also had drawn my attention to the finding recorded by the
trial Court that absolute interest had passed in favour of the
appellant/plaintiff under Ex.A-1.  The learned Counsel further pointed out that
it was held to be invalid only on the ground that possession was not delivered
and the third condition relating to the validity of a gift by a Muslim had not
been satisfied.The learned Counsel also commented that the gift was questioned
only on the ground of fraud or coercion, but however the Courts below had gone a
step further and had arrived at the conclusion that Ex.A-1 is invalid for want
of satisfaction of the third condition for the validity of a gift by a Muslim
i.e., delivery of possession.  The learned Counsel incidentally had referred to
certain other documents like Ex.A-2 - registration copy of the gift deed,
executed by Jahara Bi in favour of the 1st defendant and    Ex.A-3 -
registration copy of the sale deed executed by the 1st defendant in favour of
the 2nd defendant and also the other documents, Exs.A-4 to A-22 and also Exs.A-
23, A-24, A-25 and a-26.  The learned Counsel also had placed reliance on
NAWAZISH ALI KHAN Vs. ALI RAZA KHAN 1, MD.ABDUL GHANI Vs. Mt.FAKHR JAHAN 2,              
MASTAN BI Vs. BIKARI SAHEB 3, K.VEERANKUTTY Vs. P. UMMA 4, MOHAMED Vs. KAIRUM 5,                
DURIESH MOHIDEEN Vs. MADRAS STATE 6, JAMEELA BEEVI Vs. SHEIK ISMAIL 7, SHAIK              
KHATUM BIBI Vs. MAHAMAD ZAHINA BI 8.      
Sri Narasimha Reddy, the learned Counsel representing the contesting
respondents, on the contrary had contended that both the Courts below had
recorded concurrent findings to the effect that Ex.A-1 is invalid since it does
not satisfy the most essential ingredient of delivery of possession in the case
of a gift by a Mohammadan.  The learned Counsel also had drawn my attention to
the essential ingredients of a gift under Mohammadan law and had commented that
the recitals of the document Ex.A-1 are clear and no absolute rights or absolute
domain as such had been created, but in fact, possession was not delivered and
it is not a case of retaining only enjoyment, but it is a case of non-delivery
of possession on the date of Ex.A-1 and hence unless the third essential
ingredient also is satisfied, such a gift by a Muslim is definitely invalid and
there cannot be any doubt as far as this aspect is concerned.  The learned
Counsel also with all emphasis had contended that under     Ex.A-2, not only the
gift was accepted, even possession was delivered and hence Ex.A-2 is definitely
a valid document, whereas Ex.A-1 is an invalid document.  Relating to the
absence of plea on the aspect of delivery of possession, the learned Counsel
commented that it is a matter relating to interpretation of a document and when
the validity of Ex.A-1 was specifically raised, all these questions are only
incidental questions and hence the Courts below are well justified in recording
such findings.  The learned Counsel also had drawn my attention to Ex.A-23 and
Ex.A-24 and had commented that these documents - G.P.A. dated    8-12-1983 and  
also the registered will dated 20-12-1983, clearly go to show that the
appellant/plaintiff also was conscious of the fact that this Ex.A-1 is an
invalid document and if that is not the reason there is no necessity of having
Ex.A-23 or Ex.A-24.  The learned Counsel also had meticulously taken me through
the findings recorded by both the Courts below and had ultimately concluded
stating that at any rate there is no substantial question of law involved in the
matter and hence in the light of the concurrent findings, the Second Appeal is
bound to fail in view of the limitations imposed on this Court under Section 100
of the Code of Civil Procedure.
Heard both the counsel at length.
The only substantial question of law which arises for consideration in this
Second Appeal had been already specified supra.  The plaint schedule property is
an extent of Acs.2-42 cents in Maduru Village.  It is not in dispute that
originally this property belonged to one Jahara Bi w/o.Fakruddin and she is the
mother's sister of the appellant/plaintiff.  The said Jahara Bi had only one son
and he died long ago and therefore she developed love and affection towards the
appellant/plaintiff and he was brought up as her foster son and out of love and
affection she had gifted the plaint schedule property on    7-5-1973 in favour
of the appellant/plaintiff and executed a registered gift deed - Ex.A-1. This is
the crucial document around which the whole controversy revolves.  As per the
terms of this Ex.A-1, the donor had to enjoy the income from the property during
her life but however she had no right of alienation and the other absolute
rights had been given to the appellant/plaintiff.  The said gift deed was
voluntarily executed and the same was accepted by the appellant/plaintiff and no
doubt subsequent thereto there were certain ill-feelings and hence the donor
left the house of the appellant/plaintiff and executed another gift deed dated
28-9-1979 - Ex.A-2, in favour of the 1st defendant in respect of the plaint
schedule property.  The 1st defendant had executed a sale deed in favour of the
2nd defendant and as already referred to supra, the legal representatives had
been brought on record.  The said sale deed dated 26-6-1980 is marked as Ex.B-1
and the registration copy of the said sale deed is marked as Ex.A-3.  Inasmuch
as the said Jahara Bi died on 14-12-1984 and in view of the fact that the cause
of action arose only subsequent to her death, the suit was instituted.  No
doubt, it is recorded that the 2nd defendant died even prior to the institution
of the suit but however defendants 3 to 10 were brought on record and defendants
5 to 10 remained ex parte.  Defendants 1 and 4 filed separate written statements
and the 3rd defendant filed adoption memo.  The stand taken by them is to the
effect that Jahara Bi was the absolute owner of the property and the
appellant/plaintiff had exercised undue influence and by playing fraud, obtained
the gift deed - Ex.A-1, and no doubt several other allegations had been made
relating to the aspect of undue influence and fraud.  It was also further
pleaded that Jahara Bi had learnt that fraud was played on her and hence she
executed another gift deed in favour of the 1st defendant with full rights and
thus she became absolute owner of the plaint schedule property by virtue of the
gift deed defendant    28-9-1979, marked as Ex.A-2.  The 4th defendant had taken
a stand that the 1st defendant is the owner of the plaint schedule property and
she had executed a registered sale deed in favour of the 2nd defendant - Ex.B-1,
and since then the 2nd defendant was in possession till her death and subsequent
thereto defendants 3 and 4 are in possession of the property.  A specific stand
was taken that the appellant/plaintiff will not get any title to the plaint
schedule property under the invalid gift deed - Ex.A-1.
As can be seen from the material available on record, the appellant/plaintiff is
the donee under Ex.A-1 and the 1st defendant/1st respondent is the donee under
the original of Ex.A-2 and the 1st defendant is the vendor and the 2nd defendant
who is no more is the vendee under Ex.B-1.  Several of the facts are not in
dispute and hence those facts need not be discussed in detail.  The Courts
below, apart from Ex.A-1 to Ex.A-3, had also discussed Ex.A-4 to Ex.A-22 and
also   Ex.A-23 to Ex.A-26. The plaintiff had examined himself as PW-1 and apart
from his evidence there is evidence of PW-2 to PW-6.  No doubt, PW-1 had deposed
about Ex.A-1 to Ex.A-26 and he had also taken specific stand that Jahara Bi in
fact was living with him only in the same house.PW-2 is a licenced document
writer at Proddatur and the scribe of Ex.A-1.  PW-3 is the attestor of the will
Ex.A-24.  PW-5 is one of the attestors of Ex.A-1 gift deed. These witnesses no
doubt had deposed about the voluntary execution of the gift deed Ex.A-1 by
Jahara Bi in favour of the appellant/plaintiff.PW-6 is the attestor of Ex.A-22 -
Mahazarnama.The 1st defendant was examined as DW-1 and DW-2 is the husband of    
DW-1. DW-3 is a resident of Chenchupalle village who stated that he cultivated
the suit land on lease for 35 years and he was giving 14 bags of paddy to Jahara
Bi towards lease and he gave grains for 2 years to DW-1 and thereafter stopped
cultivation. The 4th defendant was examined as DW-4.
Though several documents had been marked, Ex.A-1 to Ex.A-3 alone are crucial for
the present purpose.  As far as fraud and undue influence are concerned, the
Courts below had recorded finding that Jahara Bi executed Ex.A-1 voluntarily.
However the main ground on which Ex.A-1 was held to be invalid and consequently
Ex.A-2 and Ex.A-3 were held to be valid, was that there was no delivery of
possession under Ex.A-1 gift deed.  The essential ingredients of a gift under
Mohammadan law are as follows:
A declaration of gift by the donor; An acceptance of gift, express or implied by
or on behalf of the donee; delivery of possession of the subject matter of the
gift by the donor to the donee either physically or constructively.

Both the Courts below had recorded a finding that inasmuch as it is not the case
of the appellant/plaintiff that he had taken possession of the plaint schedule
property under Ex.A-1 and there is no recital also to that effect, the gift is
invalid. This is the exact question which had been elaborately argued by both
the counsel.
In THIMMAIAH Vs. NINGAMMA 9 it was held that unless the High Court in Second  
Appeal expressly arrives at a conclusion contrary to the concurrent findings of
the courts below, it must be taken that such findings are accepted and necessary
inferences from such findings must be necessarily made.  In VEERAYEE AMMAL Vs.    
SEENI AMMAL10 it was observed that it is distressing that despite amendment, the
provisions of Section 100 of the Code have been liberally construed and
generously applied by some Judges of the High Court with the result that the
objective intended to be achieved by amending Section 100 appears to have been
frustrated.  It is also true that no doubt the High Court while deciding a
Second Appeal arising out of concurrent findings should be more careful and
cautious while deciding the matter (V.PECHIMUTHU Vs. GOWRAMMAL 11, PADIKAL        
MADAPPA Vs. C.B. KARIAPA AND OTHERS 12).  In HAFAZAT HUSSAIN Vs. ABDUL MAJEED 13                
it was held that the rule of non-interference in the case of concurrent findings
is not an absolute rule of universal application. In the present case on hand,
the main question is interpretation of the recitals of Ex.A-1 and the legal
effect thereof.  No doubt, certain other documents had been marked and some oral
evidence also had been let-in by the parties.  On appreciation of facts, the
concurrent recorded by both the Courts below is that Ex.A-1 is invalid since it
does not satisfy the third ingredient of delivery of possession since it is a
gift made by a Muslim.  Since it is only the interpretation of a document, the
same being a pure question of law, can be definitely gone into in a Second
Appeal, since that by itself will be a substantial question of law.
The recitals of Ex.A-1 already had been dealt with supra.  The validity of Ex.A-
2 and Ex.A-3 will depend upon the validity or otherwise of Ex.A-1.  Further,
when Ex.A-1 is held to be valid, the subsequent documents Ex.A-2 and Ex.A-3 will
automatically fall to the ground. It is no doubt true that to constitute a valid
gift made by a Mohammadan, three ingredients are to be satisfied and the third
ingredient is delivery of possession.  Here is a case where as can be seen from
the recitals of Ex.A-1 absolute rights had been given to the appellant/plaintiff
and what had been retained was the limited right of maintenance to enjoy the
income out of the property and that too even without the right of alienation.
Thus, the intention of the donor Jahara Bi while executing Ex.A-1 is very clear
that she intended to deliver the entire domain of this property with absolute
rights in favour of the appellant/plaintiff, but however only retaining the
right to enjoy the income without the right of alienation during her lifetime.
This recital of postponement of the right to enjoy income from out of the plaint
schedule property by the appellant/plaintiff is construed to be non-delivery of
possession under Ex.A-1 and consequently it was contended by the learned Counsel
for the respondents that the document is an invalid document.  It is pertinent
to note that when absolute domain or absolute rights had been created in favour
of the appellant/plaintiff under Ex.A-1, the mere fact that the right to enjoy
the property under the said document had been postponed and that right of
enjoyment had been retained by Jahara Bi, by itself cannot invalidate Ex.A-1.
In the decision referred (7) supra, it was held that it is well established that
in order to constitute a valid gift under Mohammadan Law, three necessary
elements which constitute such a gift are, a declaration of gift by the donor,
acceptance of the gift by the donee, which acceptance may be express or may be
inferred by necessary implication and lastly delivery of possession of the
subject matter of the gift by the donor to the donee.  But, in the course of
time, certain exceptions have been engrafted in the matter of upholding of a
gift notwithstanding immediate delivery of possession of the subject matter of
the gift and one such exception is a case where the donor without reserving a
dominion over the corpus of the property or any share therein stipulates only
for a right to enjoy the income from the property during his lifetime or makes a
gift subject to a condition that the donee shall pay the whole of the income
from the property or a part thereof to a person of his choice during the
lifetime of such a person.  In the decision referred to (1) supra, the Privy
Council held as follows:
".....In general, Muslim Law draws no distinction between real and personal
property, and their Lordships know of no authoritative work on Muslim law,
whether the Hedaya or Baillie or more modern works, and no decision of this
Board which affirms that Muslim law recognizes the splitting up of ownership of
land into estates, distinguished in point of quality like legal and equitable
estates, or in point of duration like estates in fee simple, in tail, for life,
or in remainder.  What Muslim law does recognize and insist upon, is the
distinction between the corpus of the property itself (ayn) and the usufruct in
the property (manafi).  Over the corpus of property the law recognizes only
absolute dominion, heritable and unrestricted in point of time; and where a gift
of the corpus seeks to impose a condition inconsistent with such absolute
dominion the condition is rejected as repugnant; but interests limited in point
of time can be created in the usufruct of the property and the dominion over the
corpus takes effect subject to any such limited interests."

Reliance also was placed on the decision of the Privy Council on the decision
referred to (2) supra in this regard.  In the decision referred to (4) supra, it
was held that where property is transferred by way of a gift and the donor does
not reserve dominion over the corpus of the property, nor any share of dominion
over the corpus but stipulates simply for and obtains a right to the recurring
income during his life, the gift and the stipulation are both valid and the
reservation of usufruct does not by itself make the gift of the property in
question void under Muhammadan law and that applies not only to Shias but also
to Sunnis. In fact, the Division Bench of the Madras High Court in this decision
had followed the decision of the Privy Council referred (2) supra and also NAWAB
UMJAD ALLY KHAN Vs. Mt.MOHUMDEE BEGUM 14.  The construction of a gift creating      
life interest in income of certain land under Muhammadan law had been dealt with
in the decision referred (5) supra.  In the decision referred to (8) supra, it
was held that in the case of a gift to A for life and thereafter to B where
there is no compelling language to the contrary, Courts might reasonably
construe the gift as a gift of the corpus absolutely to B and of the usufruct to
A for life so as to conform to the Muslim Law governing Hiba.  In the decision
referred to (3) supra where the intention indicated by the documents was that
the donees were being then vested with the right which the donor had and
thereafter the donor reserved for herself the retention of the properties which
according to the later passages in the documents were for enjoying the produce
till the donor's life time, by mere use of the word 'life-time' in the documents
it cannot be said that the donee intended to convey only vested remainders in
favour of the donees and that had that been her intention she would not have
applied for transfer of patta in favour of one of the donees nor the gift deeds
would have been accompanied with the possession of the property and in view of
the language of the gift deeds the gifts in question were held to be valid.
Further, reliance also was placed on the decision referred (6) supra.
It is no doubt true that certain of the decisions cited are distinguishable on
facts.  But the question is when absolute rights had been transferred under a
gift by a Mohammadan, whether such document will be invalid for the mere reason
that the right to enjoy the property is postponed inasmuch as such rights are
retained by the donor herself for life ?  From the recitals of Ex.A-1, the
intention of the donor is clear and categorical to convey absolute rights in
favour of the appellant/plaintiff.  In fact, while retaining the right to enjoy
the income for maintenance, a restriction not to have the right of alienation,
also is imposed and this is also suggestive of the fact that what had been
conveyed by the donor to the donee under Ex.A-1 are absolute rights in the
plaint schedule property and hence the mere fact that there was no delivery of
possession in presenti on the date of the document cannot by itself invalidate
Ex.A-1.  In fact this is the view expressed even by the Privy Council in the
decision referred (2) supra. On a careful reading of the decisions referred to
supra, it can be seen that no contrary opinion had been expressed in this
regard.  In the case of passing of absolute rights under a gift by a Muhammadan,
the postponment of enjoyment will definitely fall under an exception and on that
ground it cannot be said that Ex.A-1 is invalid and this view expressed by me
also is in accordance with the view expressed by our High Court in the decision
referred to (3) supra and also a Division Bench of the Madras High Court
referred (7) supra.  It is needless to point out that in the light of the view
expressed by me relating to the validity of Ex.A-1, the appellant/plaintiff is
entitled to the relief prayed for since the validity of Ex.A-2 and Ex.A-3 will
depend upon Ex.A-1 only.  Except this Point, no other Points had been urged
though relating to the conduct of the parties certain documents like Ex.A-23 and
Ex.A-24 had been referred to.
Hence, in view of the findings recorded by me relating to the interpretation of
Ex.A-1, I am of the considered opinion that the appellant/plaintiff is bound to
succeed in this Second Appeal.Accordingly, the Second Appeal is allowed.  No
order as to costs.

?1 AIR 1948 P.C. 134
2 AIR 1922 P.C. 281
3 1958(2) An.W.R. 473
4 AIR 1956 MADRAS 514  
5 AIR 1954 MADRAS 769  
6 AIR 1957 MADRAS 577  
7 AIR 1979 MADRAS 193  
8 1956 An.W.R. 771
9 (2000) 7 SCC 409
10 (2002) 1 SCC 134
11 AIR 2001 S.C. 2446
12 AIR 2001 S.C. 2695
13 (2001) 7 S.C.C. 189
14 (1867) 11 M.I.A. 517

Recovery of Debts Due to Banks and Financial Institutions Act, 1993-Sections 17, 18, 19 and 31. Suit by borrower against bank-Held-Jurisdiction of civil courts is barred only in regard to applications by bank/financial institution for recovery of its debts-It is not barred in regard to any suit filed by a borrower or other person against a Bank-On facts, jurisdiction of civil court held not be barred in a borrower's suit for damages against bank for non-disbursement of a sanctioned loan-The suit found not be a counter claim to an earlier Original Application (O.A.) of Bank before D.R.T. for recovery of an amount advanced to the borrower under another loan-Subject matter of O.A and suit were not connected and decision in one did not depend on other-Such a suit was not required to be transferred to D.R.T.-It was more so as the suit was filed after establishment of latter and the provisions of the Act did not support transfer of such suit. Counter claim by borrower/defendant in Bank's Original Application before D.R.T.-Forum for-Held-Counter claim is not the only remedy, but an option available to borrower/defendant-If they have an independent claim against Bank, they cannot be compelled to make their claim against Bank only by counter-claim before D.R.T.-Such a claim made by them by an independent suit in a court having jurisdiction cannot be transferred to D.R.T. against their wishes. Constitution of India, 1950-Article 142-After declaration of law, Supreme Court in operative part of judgment relaxing application of that law under Article 142-In such a case, the precedent value is that of ratio decidendi, and not the relaxation given on special facts-One solution to avoid a situation where relaxation itself comes to be treated as law, is for the Supreme Court to clarify that it was given in exercise of power under Article 142. Appellant-bank sanctioned ad hoc packing credit facilities to the respondent company. According to appellant, respondent utilised the said credit facilities but committed default in repaying the amounts advanced. Therefore, they filed an Original Application (O.A.) before the Debt Recovery Tribunal (D.R.T.) under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 seeking a certificate of recovery thereof with interest. During pendency of the O.A. wherein trial was yet to commence, appellant sanctioned another loan and credit facilities to the respondent, but the sanctioned amounts were not released. For this, respondent filed a suit against the appellant in High Court for recovery of damages with interest. Recording of evidence in the suit had been completed and it was ripe for arguments. At this stage, appellant pleaded that the suit could not be tried by the High Court and it should be transferred to the D.R.T. on the ground that it was broadly in the nature of a counter-claim to appellant's O.A and was integrally connected with it. For this they relied on Sections 19(6) to (11) of the Act. High Court rejected these claims of appellant. Hence the present appeals. On the contentions of the parties, following questions arose for consideration of the Court: (a) Whether the subject-matter of the borrower's suit before the High Court and Bank's O.A. before D.R.T. were inextricably linked? (b) Whether the provisions of the Act require the transfer of an independent suit filed by a borrower against a Bank before a civil court to D.R.T. in the event of the Bank filing a recovery application against the borrower before D.R.T. to be tried as a counter-claim in the Bank's O.A.? Dismissing the appeal, the Court HELD: 1. It is evident from Sections 17 and 18 of the Debts Recovery Act that civil court's jurisdiction is barred only in regard to applications by a bank or a financial institution for recovery of its debts. The jurisdiction of civil courts is not barred in regard to any suit filed by a borrower or any other person against a bank for any relief. [68-f] 1.2. The Debts Recovery Act, as it orginally stood, did not contain any provision enabling a defendant in application filed by the bank/financial institution to claim any set off or make any counter claim against bank/financial institution. The Act was amended by Act 1 of 2000 to remove the lacuna by providing for set off and counter-claims by defendants in the applications filed by Banks/financial institution before the Tribunal. What is significant is that Sections 17 and 18 have not been amended. Jurisdiction has not been conferred on the Tribunal, even after the amendment, to try independent suits or proceedings initiated by borrowers or others against banks/financial institutions, nor the jurisdiction of civil courts barred in regard to such suits or proceedings. [64-b, c, d, f, g] Union of India v. Delhi High Court Bar Association, [2002] 4 SCC 5, relied on. Delhi High Court Bar Association v. Union of India, AIR (1995) Delhi 323 approved. 2. The issues that arose in the Bank's application was whether the borrower failed to repay the sums borrowed and whether the Bank was entitled to the amounts claimed. On the other hand, the issues that arose in the borrower's suit were whether the Bank had promised/agreed to advance certain monies, whether the Bank committed breach in refusing to release such loans in terms of the sanction letter; whether the borrower failed to fulfill the terms and conditions of sanction and therefore the Bank's refusal to advance, was justified; and even if there was breach, whether the borrower suffered any loss on account of such non-disbursement and if so whether the borrower was entitled to the amounts claimed. While the claim of the Bank was for an ascertained sum due from the borrower, the claim of the borrower was for damages which required firstly a determination by the court as to whether the Bank was liable to pay damages and thereafter assessment of quantum of such damages. Thus there is absolutely no connection between the subject matter of the two suits and they are no way connected. A decision in one does not depend on the other. Nor could there be any apprehension of different and inconsistent results if the suit and the application are tried and decided separately by different forums. In the circumstances, it cannot be said that the borrower's suit and Bank's application were inextricably connected. [61-c, f] 3. It is not disputed that the Calcutta High Court had the jurisdiction to entertain and dispose of suit filed by borrower when it was filed and continues to have jurisdiction to entertain and dispose of the said suit. There is no provision in the Act for transfer of suits and proceedings, except section 31 which relates to suit/proceeding by a Bank or financial institution for recovery of a debt. It is evidence from Section 31 that only those cases and proceedings (for recovery of debts due to bank and financial institutions) which were pending before any Court immediately before the date of establishment of a tribunal under the Debts Recovery Act stood transferred, to the Tribunal. In this case, there is no dispute that the Debts Recovery Tribunal, Calcutta, was established long prior to the company filing suit against the bank. The said suit having been filed long after the date when the tribunal was established and not being a suit or proceeding instituted by a bank or financial institution for recovery of a debt, did not attract section 31. [63-g, h; 64-a] 4. Making counter claim in the Bank's application before the Tribunal is not the only remedy, but an option available to the borrower/defendant. He can also file a separate suit or proceeding before a civil court or other appropriate forum in respect of his claim against the Bank and pursue the same. Even the Bank, in whose application, the counter-claim is made has the option to apply to the Tribunal to exclude the counter-claim of the defendant while considering its application. When such application is made by the Bank, the Tribunal may either refuse to exclude the counter claim and proceed to consider the Bank's application and the counter-claim and together or exclude the counter claim as prayed and proceed only with the Bank's application, in which event the counter claim would become an independent claim against a bank/financial institution. The defendant will then have to approach the civil court in respect of such excluded counter claim as the Tribunal does not have jurisdiction to try and independent claim against a bank/financial institution. A defendant in an application, having an independent claim against the Bank, cannot be compelled to make his claim against the Bank only by way of counter-claim. Nor can his claim by way of independent suit in a court having jurisdiction, be transferred to a Tribunal against his wishes. In this case, the first respondent does not wish his case to be transferred to the Tribunal. [65-a-e] United Bank of India, Calcutta v. Abhijit Tea Co. Pvt. Ltd., [2000] 7 SCC distinguished. 5. Many a time, after declaring the law, this court in the operative part of the judgment, gives some directions which may either relax the application of law or exempt the case on hand from the rigour of the law in view of the peculiar facts or in view of the uncertainty of law till then, to do complete injustice. While doing so, normally it is not stated such determination/order is in exercise of power under Article 142. It is not uncommon to find that courts have followed not the law declared, but the exemption/relaxation made while moulding the relief in exercise of power under Article 142. When the High Courts repeatedly follow a direction issued under Article 142, treating it as the law declared by this court, incongruously the exemption/relaxation granted under Article 142 becomes the law, though at variance with the law declared by this Court. The Courts should therefore be careful to ascertain and follow the ratio decidendi, and not the relief given on the special facts, exercising power under Article 142. One solution to avoid such a situation is for this Court to clarify that a particular direction or portion of the order is in exercise of power under Article 142. [70-d, e, f] L.N. Rao, Himanshu Munshi and Rajesh Kumar Chaurasia, for the Appellant. Jaideep Gupta, Rana Mukherjee, Siddharth Gautam and Goodwill Indeevar, for the Respondent.2006 AIR 1899, 2006(1 )Suppl.SCR52 , 2006(5 )SCC72 , 2006(4 )SCALE423 , 2006(5 )JT281

CASE NO.:
Appeal (civil)  10074-10075 of 2003

PETITIONER:
Indian Bank

RESPONDENT:
ABS Marine Products Pvt. Ltd.

DATE OF JUDGMENT: 18/04/2006

BENCH:
Dr. AR. Lakshmanan & R. V. Raveendran

JUDGMENT:
J U D G M E N T


RAVEENDRAN, J.


These appeals by special leave are filed against the judgment dated
10.5.2002 of the Calcutta High Court, dismissing A.P.O. Nos.57-58 of
2001 filed by the appellant-Bank against orders dated 24.1.2001 and
13.3.2001 passed by a learned Single Judge of that court, rejecting an oral
application and a written application respectively, filed by the appellant-
Bank for transfer of Civil Suit No.7/1995 (filed by first respondent herein
against the appellant and others and pending on the file of the Calcutta
High Court) to the Debt Recovery Tribunal, Calcutta, for being tried with
O.A. No.170/1995 (filed by the appellant against the first respondent and
its guarantors).


2. The first respondent (also referred to as the 'borrower' or
'company') approached the appellant-Bank (for short 'the Bank') for
certain credit facilities. By Sanction Advices dated 12.7.1991 and
6.12.1991, the Bank sanctioned ad hoc packing credit facilities to a limit of
Rs.20 lakhs and Rs.5 lakhs respectively. According to the Bank, the
company utilized the said credit facilities, but committed default in
repaying the amounts advanced. Therefore, the Bank filed O.A.
No.170/1995 on 21.8.1995 before the Debt Recovery Tribunal (for short
'the Tribunal') under Section 19 of the Recovery of Debts Due to Banks
and Financial Institutions Act, 1993 (for short 'Debt Recovery Act')
seeking a certificate to recover Rs.30,67,820/04 with interest from the
company and its four guarantors (Directors), jointly and severally. The said
application is pending and trial therein is yet to commence.

3. On 19.12.1991, the Bank sanctioned a Middle Term Loan of Rs.90
lakhs and certain other credit facilities to the company. The sanctioned
loans were not released. The company filed C.S. No.7/1995 against the
Bank in the Calcutta High Court in January, 1995, for recovery of
Rs.25,38,58,000/- as damages (for non-disbursal of the loans) with interest.
By the end of 2000, recording of evidence in the suit was completed and
the suit was ripe for arguments.

4. On 24.1.2001, the Bank made an oral submission that the suit could
not be tried by the High Court and it should be transferred to the Tribunal.
A learned Single Judge rejected the said request by the following order :-

"Though not pleaded in the written statement specifically, the learned
counsel for the defendant contends that in view of the amendment of
section 19 of the Recovery of debts due to Banks and Financial
Institutions Act, 1993, this suit cannot be tried by this court. I have gone
through section 19 of the said act as amended up to date. It appears from
the said amendment that the debtor/respondent will be entitled to make
counter claims in the same proceeding initiated by the bank. Before
amendment there was no such specific provision. But in this case, the
plaintiff/debtor had filed the suit before the bank could file appropriate
proceeding. It is a separate suit. It is neither a cross suit nor can be termed
as counter-claim. So the suit is perfectly entertainable by this court.
Therefore, the preliminary objection raised by the Bank is hereby
overruled."


5. Thereafter, the Bank filed an application in writing, praying for
transfer of C.S. No.7/1995 filed by the borrower to the Tribunal on the
ground that the said suit was broadly in the nature of a counter-claim to
Bank's O.A. No.170/1995 and was integrally connected with its
application. The learned Single Judge rejected the said application by order
dated 13.3.2001, as barred by res judicata, in view of the fact the same
prayer made orally earlier had been rejected on 24.1.2001. The said two
orders dated 24.1.2001 and 13.3.2001 were challenged by the Bank in two
appeals (APO Nos.57-58/2001) before a Division Bench of the High Court.
In support of its contention that C.S. No.7/1995 should be transferred from
the High Court to the Tribunal for being tried with OA No.170/1995,  the
Bank relied on Sections 19(6) to (11) of the Debts Recovery Act and the
following observations of this Court in United Bank of India, Calcutta  v.
Abhijit Tea Co. Pvt. Ltd. [2000 (7) SCC 357] :-

"If a set-off or a counter-claim is to be equated to a cross-suit under
Section 19, a fortiori there can be no difficulty in treating the cross-suit as
one by way of set-off and counter-claim, and as proceedings which ought
to be dealt with simultaneously with the main suit by the Bank ."In
our view, in the context, the word "counter-claim" in Sections 19(8) to
(11) which is equated to a cross-suit, includes a claim even if it is made in
an independent suit filed earlier."


6. A Division Bench of the Calcutta High Court dismissed the Bank's
appeals by an order dated 10.5.2002. The High Court held that :

(i) In the absence of a provision in the Debt Recovery Act enabling a
borrower to file a suit (application) against the bank or a financial
institution, in the Debt Recovery Tribunal, the jurisdiction of the civil
court to entertain a suit filed by the borrower against the bank is not
excluded under Section 18 of the said Act.

(ii) Section 31 of the Debts Recovery Act providing for transfer of the
pending suits/cases, from courts to tribunals, applies only to those suits or
proceedings which were pending before any court immediately before the
establishment of a Tribunal under the said Act and will not apply to any
suit or proceeding validly initiated in a civil court after the establishment
of the Tribunal.

(iii) Sub-section (8) of Section 19 of the Act is merely a provision
enabling a defendant (in a Recovery Application filed by the Bank before
the Tribunal) to raise a counter-claim in his written statement against the
bank, and empowering the Tribunal to try such a counter-claim. Such an
enabling provision cannot be construed as ousting or excluding the
jurisdiction of the civil court to entertain a suit for damages filed by the
borrower against the bank, or enabling the bank to seek transfer of such a
suit, to the Tribunal. The observation in Abhijit (supra) that the borrower's
suit should be transferred to the Tribunal by treating the independent suit
of the borrower as a counter-claim in the application of the Bank, was in
exercise of the extraordinary power under Article 142 of the Constitution
of India, on the special and peculiar facts of that case. As the High Court
in its jurisdiction as a civil court, did not possess the power available to
the Supreme Court under Article 142, it could not pass any order for
transfer of a suit validly instituted before it, to the Tribunal.

(iv) Even assuming that the High Court could transfer the suit, the
basic requirement for transfer laid down in Abhijit (supra), that is, the
subject-matter of the borrower's suit pending before the Court, and the
Bank's application pending before the Tribunal should be inextricably
connected, was not present in this case. Therefore, there could be no
transfer.

(v) Where a borrower's suit is deemed to be a counter-claim in respect
of the Bank's application, and is transferred to the Tribunal,  it would be
open for the Bank, to contend, as enabled by Section 19(11) of the Debts
Recovery Act, that such suit should be tried independently. If such a
contention is accepted by the Tribunal, the suit transferred from the civil
court to the Tribunal will have to be re-transferred from the Tribunal to the
civil court, as the Tribunal has no jurisdiction to entertain or try an
independent suit of the borrower against the bank. That will lead to an
anomalous situation.

(vi) The civil court has jurisdiction to try all suits of civil nature, except
those excluded by reason of an express or implied bar in a statute. The
jurisdiction of a civil court can never be contingent upon an order passed
by the Tribunal, and that too on an application by one of the parties to the
proceeding before the Tribunal. Nor will the jurisdiction vested in a civil
court to proceed with a suit, cease on the Bank or financial institution
filing an application for recovery before the Tribunal.

7. The said decision of the Division Bench of the Calcutta High Court
is challenged by the Bank in these appeals by special leave, on the ground
that the subject matter of the Bank's application and the first respondent's
suit were inextricably connected, and though the suit of the borrower was
prior to the Bank's application before the Tribunal, in view of the law laid
down in Abhijit (supra), the borrower's suit should be considered as a
counter-claim in the Bank's application before the Tribunal and
consequently, transferred to the Tribunal. On the contentions raised, the
following questions arise for our consideration :

(a) Whether the subject-matter of the borrower's suit before
the High Court and Bank's application before the
Tribunal were inextricably connected?

(b) Whether the provisions of Debts Recovery Act mandate
or require the transfer of an independent suit filed by a
borrower against a Bank before a civil court to the
Tribunal, in the event of the Bank filing a recovery
application against the borrower before the Tribunal, to
be tried as a counter-claim in the Bank's application?

(c) Whether  the observation in Abhijit (supra) that the suit
filed by the borrower against the Bank has to be
transferred to the Tribunal for being tried as a counter-
claim in the applications of the Bank, is to be construed
as a principle laid down by this Court, or as an
observation in exercise of power under Article 142 in
order to do complete justice between the parties?
Re : Question No. (i) :
8. The Bank sanctioned an ad hoc packing credit limit of Rs.20 lacs on
12.7.1991 and an additional ad hoc packing credit limit of Rs.5 lacs on
6.12.1991, subject to the terms contained in the Sanction Advice dated
12.7.1991. In regard to the initial limit of Rs.20 lacs, the company executed
an agreement dated 15.7.1991 and its 4 Directors executed a guarantee
dated 15.7.1991. In regard to the additional amount of Rs.5 lacs, a
promissory note and an agreement were executed on 20.11.1991. Claiming
that the company failed to pay the amounts advanced, the Bank filed an
application before the Tribunal for recovery of Rs.30,67,820.04. The cause
of action for the Bank's application is the alleged non-payment of the
amounts advanced to the borrower, in pursuance of ad-hoc limits
sanctioned on 12.7.1991 and 6.12.1991. On the other hand, the subject
matter of the suit filed by the borrower against the Bank and the cause of
action therefor, are totally unconnected with and different from the subject
matter of and cause of action for the Bank's application. On the request of
the borrower, the Bank by letter dated 19.12.1991 sanctioned several credit
facilities to the borrower, namely, (i) a Medium Term Loan of Rs.90 lacs;
(ii) packing credit loan facilities to a  limit  of Rs.50 lacs; (iii) bridge loan
of Rs.15 lacs; and (iv) guarantee facility to an extent of Rs.85.42 lacs. The
Bank also agreed to absorb the ad hoc packing credit facilities of Rs.25 lacs
already sanctioned within the fresh limits sanctioned. The borrower alleged
that it proceeded to a arrange its affairs and activities on the assumption
that the Bank will be releasing the loans; and that the Bank failed to release
the credit facilities, thereby putting it (the borrower) to huge losses, apart
from denying the profits from the business. Consequently, it filed C.S.
No.7/1995 for recovery of Rs. 25,38,58,000/- made up of  Rs.
11,33,22,000/- towards loss of profits, Rs.10 crores as compensation for
loss of goodwill and reputation, Rs.3.50 croress as damages on account of
the impact of inflation and difference in foreign exchange rates,
Rs.31,36,000/- towards expenditure which became infructuous on account
of the Bank's failure to release the loans, and Rs.24 lacs towards interest up
to the date of the suit.  The cause of action for the borrower's suit is the
alleged breach by the Bank, in not releasing the sanctioned loans.

9. The issues that arose in the Bank's application was whether the
borrower failed to repay the sums borrowed and whether the Bank was
entitled to the amounts claimed. On the other hand, the issues that arose in
the borrower's suit were whether the Bank had promised/agreed to advance
certain monies; whether the Bank committed breach in refusing to release
such loans in terms of the sanction letter; whether the borrower failed to
fulfil the terms and conditions of sanction and therefore the Bank's refusal
to advance, was justified; and even if there was breach, whether the
borrower suffered any loss on account of such non-disbursement and if so
whether the borrower was entitled to the amounts claimed. While the claim
of the Bank was for an ascertained sum due from the borrower, the claim of
the borrower was for damages which required firstly a determination by the
court as to whether the Bank was liable to pay damages and thereafter
assessment of quantum of such damages. Thus there is absolutely no
connection between the subject matter of the two suits and they are no way
connected. A decision in one does not depend on the other. Nor could there
be any apprehension of different and inconsistent results if the suit and the
application are tried and decided separately by different forums. In the
circumstances, it cannot be said that the borrower's suit and the Bank's
application were inextricably connected.


Re : Question No. 2 :


10.   Section 17 of the Debts Recovery Act deals with jurisdiction, powers
and authority of the Tribunals. Sub-section (1) thereof provides that a
tribunal shall exercise, on and from the appointed day, the jurisdiction,
powers and authority to entertain and decide applications from the banks
and financial institutions for recovery of debts due to such banks and
financial institutions. "Debt" is defined under Section 2(g) as follows :

"(g) "debt" means any liability (inclusive of interest) which is claimed as
due from any person by a bank or a financial institution or by a consortium
of banks or financial institutions during the course of any business activity
undertaken by the bank or the financial institution or the consortium under
any law for the time being in force, in cash or otherwise, whether secured
or unsecured, or assigned, or whether payable under a decree or order of
any civil court or any arbitration award or otherwise or under a mortgage
and subsisting on, and legally recoverable on, the date of the application;"


Section 18 provides that on and from the appointed day, no court or other
authority shall have, or be entitled to exercise, any jurisdiction, powers or
authority (except the Supreme Court, and a High Court exercising
jurisdiction under Article 226 and 227 of the Constitution) in relation to
the matters specified in Section 17.

11. Section 19 related to the procedure of Tribunal, in regard to filing of
applications. Section 19, as it originally stood, was substituted in entirety
by Act 1 of 2000. Sub-section (1) of section 19 provides that a Bank or
financial institution can make an application to jurisdictional Debt
Recovery Tribunal. Sub-sections (6) to (11) of new Section 19, relevant for
our purpose, are extracted below :

"(6) Where the defendant claims to set-off against the applicant's demand
any ascertained sum of money legally recoverable by him from such
applicant, the defendant may, at the first hearing of the application, but not
afterwards unless permitted by the Tribunal, present a written statement
containing the particulars of the debt sought to be set-off.

(7) The written statement shall have the same effect as a plaint in a cross-
suit so as to enable the Tribunal to pass a final order in respect both of the
original claim and of the set-off.

(8) A defendant in an application may, in addition to his right of pleading
a set off under sub-section (6), set up, by way of counter-claim against the
claim of the applicant, any right or claim in respect of a cause of action
accruing to the defendant against the applicant either before or after the
filing of the application but before the defendant has delivered his defence
or before the time limited for delivering his defence has expired, whether
such counter-claim is in the nature of a claim for damages or not.

(9) A counter-claim under sub-section (8) shall have the same effect as a
cross-suit so as to enable the Tribunal to pass a final order on the same
application, both on the original claim and on the counter-claim.

(10) The applicant shall be at liberty to file a written statement in answer
to the counter-claim of the defendant within such period as may be fixed
by the Tribunal.

(11) Where a defendant sets up a counter-claim and the applicant contends
that the claim thereby raised ought not to be disposed of by way of
counter-claim but in an independent action, the applicant may, at any time
before issues are settled in relation to the counter-claim, apply to the
Tribunal for an order that such counter-claim may be excluded, and the
Tribunal may, on the hearing of such application make such order as it
thinks fit."

 

12. Section 31 of the Debts Recovery Act provides that every suit or
other proceeding pending before any court immediately before the date of
establishment of a Tribunal under the said Act, being a suit or proceeding
the cause of action whereon it is based is such that it would have been, if it
had arisen after such establishment, within the jurisdiction of such
Tribunal, shall stand transferred on that date to such Tribunal.

13. Section 9 of the Code of Civil Procedure provides that the courts
shall have jurisdiction to try all suits of a civil nature, excepting suits of
which their cognizance is either expressly or impliedly barred.

14. It is evident from Sections 17 and 18 of the Debts Recovery Act that
civil court's jurisdiction is barred only in regard to applications by a bank
or a financial institution for recovery of its debts. The jurisdiction of civil
courts is not barred in regard to any suit filed by a borrower or any other
person against a bank for any relief. It is not disputed that the Calcutta
High Court had jurisdiction to entertain and dispose of C.S. No.7/1995
filed by the borrower when it was filed and continues to have jurisdiction
to entertain and dispose of the said suit. There is no provision in the Act for
transfer of suits and proceedings, except section 31 which relates to
suit/proceeding by a Bank or financial institution for recovery of a debt. It
is evident from Section 31 that only those cases and proceedings (for
recovery of debts due to banks and financial institutions) which were
pending before any court immediately before the date of establishment of a
tribunal under the Debts Recovery Act stood transferred, to the Tribunal. In
this case, there is no dispute that the Debt Recovery Tribunal, Calcutta, was
established long prior to the company filing C.S. No.7/1995 against the
bank. The said suit having been filed long after the date when the tribunal
was established and not being a suit or proceeding instituted by a bank or
financial institution for recovery of a debt, did not attract section 31.

15. As far as sub-sections (6) to (11) of section 19 are concerned, they
are merely enabling provisions. The Debts Recovery Act, as it originally
stood, did not contain any provision enabling a defendant in an application
filed by the bank/financial institution to claim any set off or make any
counter claim against the bank/financial institution. On that among other
grounds, the Act was held to be unconstitutional (see Delhi High Court Bar
Association vs. Union of India AIR 1995 Delhi 323). During the
pendency of appeal against the said decision, before this Court, the Act
was amended by Act 1 of 2000 to remove the lacuna by providing for set
off and counter-claims by defendants in the applications filed by
Banks/financial institution before the Tribunal. The provisions of the Act
as amended were upheld by this Court in Union of India vs. Delhi High
Court Bar Association [2002 (4) SCC 275]. The effect of sub-sections (6)
to (11) of Section 19 of the amended Act is that any defendant in a suit or
proceeding initiated by a bank or financial institution can : (a) claim set off
against the demand of a Bank/financial institution, any ascertained sum of
money legally recoverable by him from such bank/financial institution; and
(b) set-up by way of counter-claim against the claim of a Bank/financial
institution, any right or claim in respect of a cause of action accruing to
such defendant against the bank/financial institution, either before or after
filing of the application, but before the defendant has delivered his defence
or before the time for delivering the defence  has expired, whether such a
counter claim is in the nature of a claim for damages or not. What is
significant is that Sections 17 and 18 have not been amended. Jurisdiction
has not been conferred on the Tribunal, even after amendment, to try
independent suits or proceedings initiated by borrowers or others against
banks/financial institutions, nor the jurisdiction of civil courts barred in
regard to such suits or proceedings. The only change that has been made is
to enable defendants to claim set off or make a counter-claim as provided
in sub-sections (6) to (8) of Section 19  in applications already filed by the
bank or financial institutions for recovery of the amounts due to them. In
other words, what is provided and permitted is a cross-action by a
defendant in a pending application by the bank/financial institution, the
intention being to have the claim of the bank/financial institution made in
its application and the counter-claim or claim for set off of the defendant,
as a single unified proceeding, to be disposed of by a common order.

16. Making a counter claim in the Bank's application before the Tribunal
is not the only remedy, but an option available to the borrower/defendant.
He can also file a separate suit or proceeding before a civil court or other
appropriate forum in respect of his claim against the Bank and pursue the
same. Even the Bank, in whose application the counter-claim is made, has
the option to apply to the tribunal to exclude the counter-claim of the
defendant while considering its application. When such application is made
by the Bank, the Tribunal may either refuse to exclude the counter-claim
and proceed to consider the Bank's application and the counter-claim
together; or exclude the counter-claim as prayed, and proceed only with the
Bank's application, in which event the counter-claim becomes an
independent claim against a bank/financial institution. The defendant will
then have to approach the civil court in respect of such excluded counter
claim as the Tribunal does not have jurisdiction to try any independent
claim against a bank/financial institution.  A defendant in an application,
having an independent claim against the Bank, cannot be compelled to
make his claim against the Bank only by way of a counter-claim. Nor can
his claim by way of independent suit in a court having jurisdiction, be
transferred to a Tribunal against his wishes.

17. In this case, the first respondent does not wish his case to be
transferred to the Tribunal.  It is, therefore, clear that the suit filed by the
first respondent against the Bank in the High Court for recovery of
damages, being an independent suit, and not a counter-claim made in the
application filed by the bank, the Bank's application for transfer of the said
suit to the Tribunal was misconceived and not maintainable. The High
Court, where the suit for damages was filed by the company against the
bank, long prior to the bank filing an application before the tribunal against
the company, continues to have jurisdiction in regard to the suit and its
jurisdiction is not excluded or barred under Section 18 or any other
provision of Debts Recovery Act.

Re : Question No. (iii) :


18. Let us examine what happened in Abhijit (supra). A suit
(No.410/1985) filed by the Bank in the Calcutta High Court, was disposed
of in terms of an alleged compromise on 29.3.1984. The Tribunal was
established on 27.4.1994. Subsequently, the compromise decree was set
aside by a Division Bench on 11.8.1998 and the said suit stood restored to
file. The debtor company filed an application praying that the Bank's suit
should be retained on the original side of the Calcutta High Court and
should not be transferred to the tribunal, as the said suit was "not pending"
on 27.4.1994 and therefore Section 31 of the Debts Recovery Act was not
attracted. A learned Single Judge of the Calcutta High Court accepted the
said contention and directed that the Bank's suit should be retained and
proceeded with before the High Court. That order was challenged by the
Bank before this Court. Before this Court, the debtor company urged an
additional ground for seeking retention of the Bank's suit in the High Court
by contending that the Bank's suit was inextricably connected with a suit
filed by it against the Bank (Suit No. 272/1985) and therefore, the Bank's
suit should not be transferred to the Tribunal. This Court formulated the
following four questions as arising for its consideration :

"(1) Whether Suit No.410 of 1985 by the Bank which was disposed of by
judgment  dated 29.3.1994 and which judgment was set aside by the
Bench on 11.8.1998 and remanded to the Single Judge, could not be
treated as pending immediately before the commencement of the Act on
27.4.1994 (in West Bengal) and whether it could not be transferred to the
Recovery Tribunal ?

(2) What is the combined effect of Sections 18 and 31 and of the Act on
pending proceedings ?

(3) Whether the pendency of Suit No.272 of 1985 filed by the debtor
Company against the Bank for specific performance and for perpetual and
mandatory injunctions raising common issues between parties in both
these suits was a sufficient reason for retention of the Bank's suit No.410
of 1985 on the original side of the High Court to be tried along with Suit
No.272 of 1985 filed by the debtor Company ?

(4) Whether Suit No.272 of 1985 filed by the debtor Company was, in
substance, one in the nature of a "counter-claim" against the Bank and was
one which also fell within the special Act by reason of Sections 19(8) to
(11) of the Act (as introduced by amending Act 1 of 2000) and if that be
so, whether it could still be successfully pleaded by the respondent
Company that the pendency of the Company's Suit No.272 of 1985 was a
ground for retention of the Bank's Suit No.410 of 1985 on the original
side of the High Court ?"

Though the questions raised were four, the issues were only two. The first
was whether suit disposed of on 29.3.1994 and restored on 11.8.1998 could
be deemed to be pending on 27.4.1994, when the Tribunal was established,
for purpose of Section 31. The second was, whether the Bank's suit, even
though liable to be transferred to the Tribunal under section 31, could be
retained in the High Court on the ground that it was inextricably connected
with an earlier suit filed by the borrower against the Bank. The question
whether a suit filed by the borrower against a Bank in a civil court, could
be transferred to the Tribunal against his wishes, neither arose for decision
nor was considered or decided.

19. With reference to the first issue, this Court held that when the appeal
against the compromise decree dated 29.3.1984 was allowed and the
compromise decree was set aside, the suit stood restored and it should be
deemed to be pending from 29.3.1984 itself, and consequently, must be
deemed in the eye of law to be pending on 27.4.1994 when the Tribunal
was constituted at Calcutta, and Sections 18 and 31 of the Debts Recovery
Act would apply to the said suit. There is no dispute that the decision of
this Court on the first issue is the law declared by this Court.

20.     The second issue, as noticed above, was whether the suit of the Bank
against the borrower should be retained in the High Court, merely because
the borrower's suit was pending in the High Court. There was no
application or prayer for transfer of the borrower's suit [OS No.272/1985]
to the Debts Recovery Tribunal. Neither the Bank nor the borrower had
sought transfer of the said suit from the High Court. In fact, before the
High Court, the borrower had not even contended that the Bank's suit
should be retained in the High Court on the ground that it was inextricably
connected with its suit pending in the High Court. However, the borrower
raised an additional ground in support of its request for retention of the
Bank's suit in the High Court, for the first time, in this Court by contending
that the subject matter of the Bank's suit was inextricably connected with
the subject matter of its suit, and therefore, both should be tried together by
the High Court itself. The borrower submitted that as the borrower's suit
could not be transferred to the Tribunal, having regard to Sections 17, 18
and 31 of the Debts Recovery Act, the Bank's suit should also not be
transferred to the tribunal. This Court held that having regard to the
mandate contained in Section 31, it was not possible to retain the Bank's
suit before the civil (High) Court on the ground that it was connected with
another suit filed against the Bank. This answered the second issue. But
this Court thereafter proceeded to consider as an incidental issue whether
the borrower's suit could be transferred to the Tribunal as the borrower was
insisting that his suit and Bank's suit should be tried together. It found a
solution by holding that the principle underlying sub-section (8) of Section
19 which enabled the defendant making a counter-claim in an application
filed by the Bank, can broadly be extended and applied to an independent
prior suit of the borrower by considering such suit as a counter-claim, so
that both could be transferred to the Tribunal, instead of transferring only
the Bank's suit. This Court, however, held so only because of the following
circumstances :-

(i) The borrower contended that its suit and the Bank's suit
cannot be tried independently, as the subject-matter of its suit
and the Bank's suit were inextricably connected;

(ii) the Bank also agreed that the borrower's suit can be tried
along with its suit; and

(iii) the court on examination found that the two suits were in fact
inextricably connected.

But the confusion is in regard to this 'incidental' decision/observations
made while deciding the second issue. While the Appellant contends that
the said incidental observations, made on an issue not arising for decision,
are also in the nature of law declared by this Court, the first Respondent
contends that they are merely observations made on the peculiar facts and
circumstances of that case, in exercise of the power under Article 142 to do
complete justice.

21. The first Respondent drew our attention to the following
circumstances in support of its contention that the observations relating to
treating a borrower's independent suit as a counter claim, was in exercise
of power under Article 142 :

(a) Though there was no prayer for transfer of the borrower's suit
to Tribunal at any stage, this Court held that borrower's suit
should be transferred to the Tribunal.
(b) The four questions that were formulated for consideration
(extracted above) clearly showed that the question as to
whether borrower's suit should be transferred never arose for
consideration. In fact, no arguments were addressed by either
party on the question whether the borrower's suit can be or
should be transferred to the Tribunal.
(c) Sub-section (8) of Section 19 refers only to a counter-claim in
the Bank application, and does not contemplate a separate suit
filed against a Bank, being treated as a counter-claim.

The first respondent also pointed out that this Court, in the operative
portion, only directly transfer of Bank's suit, but not the borrower's suit, to
the Tribunal. The first respondent also relied on the following observations/
directions in paras 42, 43, 44 and 45 of the judgment to demonstrate that
the decision was by exercising power under Article 142 :

"Our decision in regard to the real nature of Suit No.272 of 1985 has
become necessary in the context of a plea by the debtor Company that
the Company's Suit No.272 of 1985 is liable to be retained in the civil
court and on account of the plea that the connected suit by the Bank
Suit No.410 of 1985 is also to be retained.

We, therefore, direct the Bank's Suit No.410 of 1985 to be transferred by
the Registrar, Calcutta High Court to the appropriate Tribunal under the
Act. So far as the debtor Company's Suit No.272 of 1985 is concerned,
action has to be taken likewise by the Registrar in the light of our finding,
which finding has become necessary in view of the contention on
behalf of the debtor Company before us, as explained above.

The pendency of the Company's Suit No. 272 of 1985 in the High Court is
no reason for keeping the Bank's suit No. 410 of 1985 in the High Court.
Suit No. 410 of 1985 is liable to be transferred to the Tribunal.
Incidentally, we also hold that even Suit No. 272 of 1985 is to be tried
only by the Tribunal.

The appeal is allowed. The order of the learned Single Judge is set aside
and Suit No. 410 of 1985 is directed to be transferred by the Registrar,
High Court to the Tribunal. In the light of our finding as to the real
nature of the Company's Suit  No. 272 of 1985, it will be for the
Registrar of the High Court to pass appropriate orders. We hope that
appropriate orders will be passed in relation to suit no. 272 of 1985
expeditiously, at any rate, within one month from today."

(Emphasis supplied)
       
It is further submitted that any direction issued in exercise of power under
Article 142 to do proper justice and the reasons, if any, given for exercising
such power, cannot be considered as law laid down by this Court under
Article 141. It is pointed out that other courts do not have the power similar
to that conferred on this Court under Article 142 and any attempt to follow
the exercise of such power will lead to incongruous and disastrous results.

23. Though there appears to be some merit in the first Respondent's
submission, we do not propose to examine that aspect. Suffice it to clarify
that the observations in Abhijit that an independent suit of a defendant (in
Bank's application) can be deemed to be a counter claim and can be
transferred to the Tribunal, will apply only if the following conditions were
satisfied :-
(i) The subject matter of Bank's suit, and the suit of the defendant
against the Bank, should be inextricably connected in the
sense that decision in one would affect the decision in the
other.

(ii) Both parties (the plaintiff in the suit against the Bank and the
Bank) should agree for the independent suit being considered
as a counter-claim in Bank's application before the Tribunal,
so that both can be heard and disposed of by the Tribunal.

In short the decision in Abhijit is distinguishable both on facts and law.

23. One word before parting. Many a time, after declaring the law, this
Court in the operative part of the judgment, gives some directions which
may either relax the application of law or exempt the case on hand from the
rigour of the law in view of the peculiar facts or in view of the uncertainty
of law till then, to do complete justice. While doing so, normally it is not
stated that such direction/order is in exercise of power under Article 142. It
is not uncommon to find that courts have followed not the law declared, but
the exemption/relaxation made while moulding the relief in exercise of
power under Article 142. When the High Courts repeatedly follow a
direction issued under Article 142, by treating it as the law declared by this
Court, incongruously the exemption/relaxation granted under Article 142
becomes the law, though at variance with the law declared by this Court.
The courts should therefore be careful to ascertain and follow the ratio
decidendi, and not the relief given on the special facts, exercising power
under Art. 142. One solution to avoid such a situation is for this Court to
clarify that a particular direction or portion of the order is in exercise of
power under Art. 142. Be that as it may.

Conclusion

24. In view of the above, we find that the order of the High Court does
not call for any interference. These appeals are accordingly dismissed. Parties
to bear their respective costs.