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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOs. 2178-2179 OF 2004
Joseph John Peter Sandy …Appellant
Versus
Veronica Thomas Rajkumar & Anr. …Respondents
With
CIVIL APPEAL NOs. 2184-2185 OF 2004
J U D G M E N T
Dr. B. S. CHAUHAN, J.
1. These appeals have been preferred against the impugned
judgment and decree dated 16.7.2003 passed by the High Court of
Madras in A.S. No. 1104 of 1987 and Transferred A.S. No. 1120 ofPage 2
2001, wherein it has set aside the judgment and decree of the trial
court which had decreed the suit of the appellant and dismissed the
suit of the respondent No.1.
2. The facts and circumstances giving rise to these appeals are:
A. The contesting parties are the son and the daughter of late B.P.
Sandy. Though late B.P. Sandy had several children, considering his
old age, he decided to transfer/settle his two houses bearing nos.22
and 23, Peria Palli Street, Raja Annamalai Puram, Chennai-28 in
favour of his youngest son and daughter (the contesting parties herein)
respectively.
Therefore, the father of the parties executed two
registered settlement deeds on 27.8.1981 bearing nos. 1690/81 and
1691/81 at the office of Sub-Registrar, Mylapore, Chennai,
transferring House No. 23 in the name of his daughter (Respondent
No. 1) and House No. 22 in the name of his son (Appellant).
B.It is alleged by the appellant that the father of the parties had
only at a later point of time realised that the House No. 23 which was
given to the daughter, ought to have been given to him and House No.
22 to the daughter.
Thus, the parties to give effect to the real intention
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of their father decided to exchange the properties given to them, and
in furtherance thereof, executed a Agreement Deed to exchange the
same on 1.6.1982.
The said document was witnessed by Sheila Doss
and Mrs. Mary Doss, who were neighbours and teachers and
colleagues of the daughter – respondent no.1.
Since, the said
agreement dated 1.6.1982 (Ex.A-3) had not been given effect to by
the respondent no.1, the appellant filed O.S.No. 6331 of 1983 on
12.9.1983 in the court of City Civil Judge, Chennai, for issuance of
direction to the defendant/respondent no.1, to execute a Deed of
Rectification and further to restrain her from interference with the
appellant’s possession of the suit property.
During the pendency of
this suit, Shri B.P. Sandy and the appellant executed a Rectification
Deed (Ex.A-6) on 8.10.1983 by which property in Door No.23 was
given to the appellant.
The said deed was signed by two witnesses
Susan Muthu and A. Bernard.
The respondent no.1/defendant filed
suit O.S. No. 415 of 1984 before the same court for declaration that
the agreement dated 1.6.1982 (Ex.A-3), an unregistered document,
was null and void, being a forged document, and that she has under
undue influence put her signature on the blank non-judicial stamp
papers.
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C. The trial court decided both the suits together vide judgment
and decree dated 21.8.1986 by way of which the appellant’s suit was
decreed and that of respondent no.1 was dismissed.
D. Aggrieved, the respondent no.1 filed an appeal before the
learned District Judge, however, it was subsequently transferred to the
High Court and the High Court has allowed both the appeals filed by
respondent no.1.
It may also be pertinent to mention here that during the
pendency of the appeals, the appellant got the Trial Court decree
executed through the court and subsequently sold the property no.23 to the respondent no.2.
Hence, these appeals.
3. Shri R. Balasubramanian, learned senior counsel appearing for
the appellant, has submitted that the High Court has committed an
error in interpreting the statutory provisions of law and it was not
necessary, that the agreement between the parties, tantamount to an
agreement to sell, may be a registered document as required under
Section 17 of the Registration Act or by any provision of the Transfer
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of Property Act and, therefore, the High Court erred in holding the
Ex.A-3 was inadmissible and inoperative in law. Once the document
(Ex.A-3) had been admitted in the evidence without any objection
being raised, its contents were bound to be admitted and relied upon.
In fact, the said document had been executed by the parties in order to
give effect to the real intention of their father. Therefore, the
question of undue influence could not have been inferred. The
judgment of the trial court ought not to have been reversed by the
appellate court. The parties having jointly taken a loan, an agreement
was reached between the parties that in consideration for the appellant
paying the entire loan taken for the marriage and maintenance of the
respondent no.1, she would transfer the property stood in her name.
Thus, the appeals deserve to be allowed.
4. Shri Shyam D. Nandan, learned counsel appearing on behalf of
the respondent No.1, has submitted that the High Court has rightly
reversed the judgments and decree of the trial court interpreting and
applying the statutory provisions in correct perspective. It was a clear
cut case of undue influence. The Rectification Deed (Ex.A-6)
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executed by the father and appellant ought not to have been given
effect to.
In the instant case, as the respondent no. 1 was not a party to
the document Ex.A-6, she was not bound by it. Also, the appellant
could not have file the suit for rectification of settlement deed– Ex.A-
1, as there was no mistake in the understanding or execution by the
parties. The father of the parties was neither impleaded, nor examined
before the trial court, though he was still alive at the time of institution
of the suit. Even the appellant failed to examine the witnesses to the
document Ex.A-3. He examined only Shri A. Bernard, the witness of
document (Ex.A-6), who had no bearing to the instant case. Thus, the
appeals lack merit and are liable to be dismissed.
5. We have considered the rival submissions made by the learned
counsel for the parties and perused the records. Before entering into
merits of the case, it is desirable to examine the legal issues.
LEGAL ISSUES :
I. Section 26 of Specific Relief Act, 1963:
Section 26 of the Special Relief Act 1963 (hereinafter referred
to as ‘Act’) provides for rectification of instruments, where through
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fraud or a mutual mistake of the parties, an instrument in writing does not express the real intention, then the parties may apply for rectification. However, clause 4 thereof, provides that such a relief cannot be granted by the court, unless it is specifically claimed.
6. In Subhadra & Ors. v. Thankam, AIR 2010 SC 3031, this
Court while deciding upon
whether the agreement suffers from any
ambiguity and whether rectification is needed, held that when the
description of the entire property has been given and in the face of the
matters being beyond ambiguity, the question of rectification in terms
of Section 26 of the Act would, thus, not arise. The provisions of
Section 26 of the Act would be attracted in limited cases. The
provisions of this Section do not have a general application. These
provisions can be attracted in the cases only where the ingredients
stated in the Section are satisfied. The relief of rectification can be
claimed where it is through fraud or a mutual mistake of the
parties that real intention of the parties is not expressed in
relation to an instrument.
A similar view has been reiterated by this Court in State of
Karnataka & Anr. v. K. K. Mohandas & etc, AIR 2007 SC 2917.
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7. Thus, in view of the above, it can be held that Section 26 of the
Act has a limited application, and is applicable only where it is
pleaded and proved that through fraud or mutual mistake of the
parties, the real intention of the parties is not expressed in relation to
an instrument. Such rectification is permissible only by the parties to
the instrument and by none else.
II. Undue influence -
Section 16 of Contract Act, 1872:
Section 16 of the Contract Act provides that a contract is said to
be induced by “undue influence” where the relations subsisting
between the parties are such that one of the parties is in a position to
dominate the will of the other, and uses that position to obtain an
unfair advantage over the other.
8. In Bishundeo Narain & Anr. v. Seogeni Rai & Jagernath,
AIR 1951 SC 280, while dealing with the issue, this Court held:
“….in cases of fraud, ‘undue influence’ and
coercion, the parties pleading it must set forth full
particulars and the case can only be decided on
the particulars as laid. There can be no departure
from them in evidence. General allegations are
insufficient even to amount to an averment of
fraud of which any court ought to take notice
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however strong the language in which they are
couched may be, and the same applies to undue
influence and coercion.”
9. The Privy Council in Poosathurai v. Kannappa Chettiar, AIR
1920 PC 65, reasoned that it is a mistake to treat undue influence as
having been established by a proof of the relations of the parties
having been such that the one naturally relied upon the other for
advice and the other was in a position to dominate the will of the first
in giving it. Up to that point "influence" alone has been made out.
Such influence may be used wisely, judiciously and helpfully. But
whether by the law of India or the law of England, more than mere
influence must be proved so as to render influence, in the language of
the law, 'undue'.
10. In Ladli Prashad Jaiswal v. The Karnal Distillery Co. Ltd.,
Karnal & Ors, AIR 1963 SC 1279, this Court held:
“The doctrine of ‘undue influence’ under the
common law was evolved by the Courts in
England for granting protection against
transactions procured by the exercise of
insidious forms of influence spiritual and
temporal. The doctrine applies to acts of
bounty as well as to other transactions in
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which one party by exercising his position of
dominance obtains an unfair advantage over
another. The Indian enactment is founded
substantially on the rules of English common
law. The first sub-section of S.16 lays down
the principle in general terms. By sub-section
(2) a presumption arises that a person shall
be deemed to be in a position to dominate the
will of another if the conditions set out
therein are fulfilled. Sub-section (3) lays
down the conditions for raising a rebuttable
presumption that a transaction is procured by
the exercise of undue influence. The reason
for the rule in the third sub-section is that a
person who has obtained an advantage over
another by dominating his will may also
remain in a position to suppress the requisite
evidence in support of the plea of undue
influence.”
11. In Subhash Chandra Das Mushib v. Ganga Prasad Das
Mushib & Ors., AIR 1967 SC 878, this Court held that the Court
trying the case of undue influence must consider two things to start
with, namely, (1) are the relations between the donor and the donee,
such that the donee is in a position to dominate the Will of the donor,
and (2) has the donee used that position to obtain an unfair advantage
over the donor? Upon the determination of these two issues a third
point emerges, which is that of the onus probandi. If the transaction
appears to be unconscionable, then the burden of proving that the
contract was not induced by undue influence lies upon the person who
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is in a position to dominate the Will of the other. It was further said
that merely because the parties were nearly related to each other or
merely because the donor was old or of weak character, no
presumption of undue influence can arise. Generally speaking the
relations of solicitor and client, trustee and cestui que trust, spiritual
adviser and devotee, medical attendant and patient, parent and child
are those in which such a presumption arises.
12. In Afsar Shaikh & Anr v. Soleman Bibi & Ors, AIR 1976 SC
163, this Court held:
“The law as to undue influence in the case of
a gift inter vivos is the same as in the case of
a contract. Sub-section (3) of Section 16
contains a rule of evidence. According to this
rule, if a person seeking to avoid a
transaction on the ground of undue influence
proves-
(a) that the party who had obtained the
benefit was, at the material time, in a position
to dominate the will of the other conferring
the benefit, and
(b) that the transaction is unconscionable,
the burden shifts on the party benefiting by
the transaction to show that it was not
induced by undue influence. If either of these
two conditions is not established the burden
will not shift. As shall be discussed presently,
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in the instant case the first condition had not
been established; and consequently, the
burden never shifted on the defendant.
The
Privy Council in Raghunath Prasad v. Sarju
Prasad, (AIR 1924 PC 60) expounded three
stages for consideration of a case of undue
influence. It was pointed out that the first
thing to be considered is, whether the plaintiff
or the party seeking relief on the ground of
undue influence has proved that the relations
between the parties to each other are such
that one is in a position to dominate the will
of the other. Upto this point, 'influence' alone
has been made out. Once that position is
substantiated, the second stage has been
reached - namely, the issue whether the
transaction has been induced by undue
influence. That is to say, it is not sufficient for
the person seeking the relief to show that the
relations of the parties have been such that
the one naturally relied upon the other for
advice, and the other was in a position to
dominate the will of the first in giving it.
Upon a determination of the issue at the
second stage, a third point emerges, which is
of the onus probandi. If the transaction
appears to be unconscionable, then the
burden of proving that it was not induced by
undue influence is to lie upon the person who
was in a position to dominate the will of the
other. Error is almost sure to arise if the
order of these propositions be changed. The
unconscionableness of the bargain is not the
first thing to be considered. The first thing to
be considered is the relation of the parties.
Were they such as to put one in a position to
dominate the will of the other"
(Emphasis added)
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13. If there are facts on the record to justify the inference of
undue influence, the omission to make an allegation of undue
influence specifically, is not fatal to the plaintiff being entitled to
relief on that ground; all that the Court has to see is that there is no
surprise to the defendant.
In Hari Singh v. Kanhaiya Lal, AIR
1999 SC 3325, it was held that mere lack of details in the pleadings
cannot be a ground to reject a case for the reason that it can be
supplemented through evidence by the parties.
III. ADMISSIBILITY OF A DOCUMENT:
14. In State of Bihar & Ors. v. Radha Krishna Singh & Ors.,
AIR 1983 SC 684, this Court held as under:
“Admissibility of a document is one thing and
its probative value quite another - these two
aspects cannot be combined. A document may
be admissible and yet may not carry any
conviction and weight of its probative value
may be nil....
Where a report is given by a responsible
officer, which is based on evidence of
witnesses and documents and has "a statutory
flavour in that it is given not merely by an
administrative officer but under the authority
of a Statute, its probative value would indeed
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be very high so as to be entitled to great
weight.
The probative value of documents which,
however ancient they may be, do not disclose
sources of their information or have not
achieved sufficient notoriety is precious
little.”
15. Reiterating the above proposition in Madan Mohan Singh &
Ors v. Rajni Kant & Anr, AIR 2010 SC 2933, this Court held that
a document may be admissible, but as to whether the entry contained
therein has any probative value may still be required to be examined
in the facts and circumstances of a particular case.
(See Also :
H.Siddiqui (dead) by Lrs. v. A.Ramalingam AIR 2011 SC 1492;
Laxmibai (dead) thr. Lrs. & Anr v. Bhagwantbuva (dead) thr
Lrs. & Ors, JT 2013(2) SC 362 )
IV. ONUS OF PROOF:
16. In Thiruvengada Pillai v. Navaneethammal & Anr, AIR
2008 SC 1541, this Court held that when the execution of an
unregistered document put forth by the plaintiff was denied by the
defendants, the ruling that it was for the defendants to establish that
the document was forged or concocted is not a sound proposition. The
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first appellate Court proceeded on the basis that it is for the party who
asserts something to prove that thing; and as the defendants alleged
that the agreement was forged, it was for them to prove it. But the first
appellate Court lost sight of the fact that the party who propounds the
document will have to prove it. It was the plaintiff who had come to
Court alleging that the first defendant had executed an agreement of
sale in his favour. The defendant having denied it, the burden was on
the plaintiff to prove that the defendant had executed the agreement
and not on the defendant to prove the negative.
17. In K. Laxmanan v. Thekkayil Padmini & Ors., AIR 2009 SC
951, this Court held that when there are suspicious circumstances
regarding the execution of the Will, the onus is also on the propounder
to explain them to the satisfaction of the Court and only when such
responsibility is discharged, the Court would accept the Will as
genuine. Even where there are no such pleas, but circumstances give
rise to doubt, it is on the propounder to satisfy the conscience of the
Court. Suspicious circumstances arise due to several reasons such as
with regard to genuineness of the signature of the testator, the
conditions of the testator's mind, the dispositions made in the Will
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being unnatural, improbable or unfair or there might be other
indications in the Will to show that the testator's mind was not free. In
such a case, the Court would naturally expect that all legitimate
suspicion should be completely removed before the document is
accepted as the last Will of the testator.
18. In Krishna Mohan Kul @ Nani Charan Kul & Anr. v.
Pratima Maity & Ors. AIR 2003 SC 4351,
it was held that when
fraud, mis-representation or undue influence is alleged by a party in a
suit, normally, the burden is on him to prove such fraud, undue
influence or misrepresentation. But, when a person is in a fiduciary
relationship with another and the latter is in a position of active
confidence the burden of proving the absence of fraud,
misrepresentation or undue influence is upon the person in the
dominating position, he has to prove that there was fair play in the
transaction and that the apparent is the real, in other words that the
transaction is genuine and bona fide. In such a case the burden of
proving the good faith of the transaction is thrown upon the dominant
party, that is to say, the party who is in a position of active
confidence.
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19. The instant case is required to be exercised in the light of the
aforesaid settled proposition of law.
20. There is no dispute that by the settlement deed dated 27.8.1981,
late Shri B.P. Sandy had given House No. 23 admeasuring 2413 Sq.
Ft. to the daughter – respondent no.1 and House No. 22 admeasuring
730 Sq. Ft. to the son – appellant. None of the attesting witnesses to
these documents had been examined by either of the parties, to
ascertain whether late B.P. Sandy, father of the parties, had expressed
any intention in respect of the properties before them. Ex.A-6 dated
28.10.1983 a unregistered document is subsequent to Exs.A1 & A2,
by which the father had expressed his will that House No. 23 should
be given to the son – appellant. The appellant has examined one of
the attesting witnesses Shri A. Bernard but the High Court came to the
right conclusion that as the respondent no.1 was not a party to the
document, it has no effect, whatsoever in law, on the case. Thus, in
such a fact-situation, it remains to be seen as what is the effect of
document dated 1.6.1982 Ex.A-3, the Memorandum of Agreement,
and as to whether it had been obtained by the appellant by undue
influence. In the document, it is stated that mistakes, in the
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settlement deed made by their father, having been discovered only in
the last week of May 1982, the parties, have decided to rectify the
error and for that purpose, they would execute and register necessary
documents to rectify the mistake. The intention behind such
rectification being, to make the appellant entitled to House No.23 and
respondent No.1 to House No. 22.
21. Before the trial court, only the parties and Shri A. Bernard, the
attesting witness to the Deed (Ex.A-6), were examined. The appellant
also did not examine his father who was alive till 26.12.1983. The
appellant could have taken resort to the provisions under Order XVIII
Rule 16 of the Code of Civil Procedure, 1908, to examine this witness
immediately. The examination of Shri A. Bernard, (PW-2) as to the
genuineness of Ex.A-6 was a futile exercise, as the said document
could not have any bearing on the decision of the case.
22. The trial court had reasoned that, even though the appellant did
not examine the attesting witness of Ex.A-3, the defendant could
have done it and prove the allegations she had made against her
brother – appellant, and thus in the process had wrongly shifted the
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burden of proof. The Court, further held that it was the appellant who
had wanted to get Ex.A-3 executed, thus, onus to prove was on him,
had he discharged the same, only then it could be shifted to the
respondent no.1/defendant.
23. The court further held that as the respondent was an educated
woman and was serving as a teacher, her allegation of undue influence
to sign on blank non-judicial stamp papers, cannot be relied upon and,
thereby concluded that Ex.A-3 was a document executed by her
voluntarily and by free will and, hence, it was binding on her and it
was not permissible for her to say that it was a forged document.
The learned trial court had also taken note of a letter dated
19.7.1983 (Ex.B-3) written by the father of the parties to respondent
no.1 in which it was stated that he had given her House No. 23.
However, the said letter was simply brushed aside by the court
without giving any reason whatsoever.
24. The High Court while dealing with the above issues, came to
the conclusion that Ex.A-6 was totally incongruous to the natural
human conduct and if the settlor i.e. the father of the parties, had so
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intended to rectify the mistake, he could have very well registered the
rectification deed.
The court further held that once the Trial Court
came to the conclusion that Ex.A-6 was not worth of acceptance, it
was not permissible for it to grant an equitable relief of rectification of
deed.
After relying upon a large number of judgments of this Court,
the High Court further came to the conclusion that it was a case of
undue influence and as on the date of executing the alleged document
Ex.A-3, the respondent no.1 was unmarried and was dependent on her
father and brother for settling her marriage and for sustenance, as her
marriage was solemnised only on 1.6.1983.
The respondent no.1
having contended that the plaintiff was in a position to dominate her
will, thus, the document Ex.A-3 was termed as an unconscionable.
It
was a case, wherein, after obtaining the signatures of the respondent
no. 1 on some papers, the document had been scribed.
With respect to
the document, the High Court held that the said document Ex.A-3
being a typed document, ought to have contained the name of the
person who had scribed it.
It further reasoned that the language used
therein suggests that it was drafted by an expert in the field and thus,
the whole document is clouded with suspicion and unexplained
circumstances.
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25. The High Court further held that Ex.A-3 being an unregistered
document, could not have been relied upon and it had wrongly been
admitted. In our opinion, such a view may not be legally correct.
However, reversal of the said finding would not tilt the balance in
favour of the appellant.
26. In view of the law referred to hereinabove, it is crystal clear that
even though the document may be admissible, still its contents have
to be proved and in the instant case, as the appellant did not examine
either the attesting witnesses of the document, nor proved its contents,
no fault can be found with the judgment impugned before us.
Section
26 of the Act, provides for rectification of a document if the parties
feel that they have committed any mistake.
Also, it was only, the
father of the parties who could have sought rectification of the deed.
Mere rectification by parties herein does not take the case within the
ambit of Section 26 of the Act.
Taking note of the statutory
provisions of Section 16 of the Contract Act and the parameters laid
down by this Court for application of doctrine on undue influence, the
High Court has reached a correct conclusion.
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27. In view of the above, we reached the following inescapable
conclusions:
i) Neither of the party has examined the attesting witness to
document Ex.A-3. As such a witness could have explained the
conduct of the parties and deposed as to who had prepared the
document Ex.A-3.
ii) It is evident from the language of the deed (Ex.A-3) that it has
been prepared either by a lawyer or a deed writer.
iii) The said document (Ex.A-3) does not bear either the signature,
or the address of the scribe. The appellant has also not examined the
scribe, nor has he disclosed who such person was. This would have
revealed the correct position with respect to whether the respondent
no.1 had signed blank papers, or whether she had come to him for the
execution of the document with the attesting witnesses and appellant.
Additionally, the scribe could have explained who had bought the non
judicial stamp paper for the document Ex. A-3.
iv) The consideration for executing document (Ex.A-3) seems to be
the redemption of the property mortgaged jointly by both the parties,
to one Advocate Krishnaswamy, with whom the deeds of title Ex.A1
and Ex.A2 had been kept as security. The said mortgagee has not been
examined by the appellant to show as to whether the respondent No.1
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was also a party to the mortgage and who had placed the title deed of
her property with him.
v) In his examination-in-chief, the appellant had made a false
statement that he was not made aware of the settlement deed Ex.A-1
till 26th June of 1982, as it was given to him by his mother on that date
before her death. Such a statement stands completely falsified, as the
document Ex.A-1 reveals, that he had been put in possession by his
father, with the permission of respondent No.1 , as the property in
Door No.23 had been given to her and it was made clear that the
respondent No .1 had absolute right of enjoyment to the said property.
vi) Document Ex. B3 dated 29th July 1983 is subsequent to
document Ex.A-6, wherein settlor Mr. Sandy had written to
respondent No.1 that he had given Door No.23 to her. Thus, the
settlor never intended otherwise.
vii) The document Ex.A3 shows that the mistake was discovered in
the last week of May 1982. So it was agreed to rectify the error,
therefore the parties undertook the same as a rectification under
Section 26 of the Act. In the written statement filed by the appellant,
in the suit filed by the respondent No.1 , Paragraph no. 7 & 9 refers to
the mistake and also, the rectification. Thus, the document Ex.A-3
cannot be read as an “agreement to exchange.” It can be read only as a
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rectification deed, which could have been done only by the settlor and
not by the contesting parties.
viii) Considering the respective area of the properties bearing nos.22
and 23, the contract can definitely be held “unconscionable”.
28. In view of the above, we are of the considered opinion that
appeals are devoid of any merit. The same are accordingly dismissed.
No costs.
CIVIL APPEAL NOs. 2184-2185 OF 2004
These appeals are squarely covered by the aforesaid decision
in the main matters i.e. C.A No. 2178-2179 of 2004. The same are,
accordingly, dismissed.
…….…………………………………….J.
(Dr. B.S. Chauhan)
….……………………………………….J.
(Fakkir Mohamed Ibrahim Kalifulla)
New Delhi;
March 12, 2013
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