sec.16 of Indian Contract Act - Transfer of property - Burden lies on the person who is in fiduciary relationship and who obtained benefit out that relationship by playing undue influence and fraud etc., - Plot allotted by Housing co operative society - the person who is in fiduciary capacity with appellant played undue influence, fraud and obtained the signature of appellant and got transferred her property in the name of his wife - Arbitrator correctly passed award set aside the transfer of house - Tribunal and High court wrongly set aside the order of Arbitrator - Apex court held that burden lies on the respondent who obtained property in favour of his wife name who is in fiduciary relationship with appellant by playing fraud , undue influence etc., and set aside the orders of tribunal and High court and directed to restore the possession with in one months =
i) Whether the Plaintiff tendered resignation on 11.11.92 from
the membership of the Society or not.
ii) Was the document executed on 13.11.92 a deed of transfer of
flat or an agreement for transfer of flat.
iii) Whether consideration money was paid by the Defendant no. 1
to the plaintiff or not.
iv) Whether the payment of consideration money by way of
transfer of shares of companies can be treated as valid
payment of consideration money or not.
v) Whether the Defendant no. 2 accepted the admission of the
membership of the Defendant no. 1 on 14.2.93 or
vi) Whether the flat in question was encumbered due to
existence of lease and license agreement at the material
point of time i.e. on 11.11.92 or on 13.11.92.
“QUESTIONS OF LAW INVOLVED
i) Whether the instant dispute is barred by law of limitation.
ii) Whether sub-section 9 of section 85 of West Bengal Co-
Operative Societies Act, 1983 was followed in case of
transfer of flat in question of the plaintiff.
iii) Whether section 69 and 70 of the West Bengal Co-Operative
Societies Act 1983 were followed in respect of admission of
membership of the Defendant no. 1.
iv) Whether Rules 135(3) (a) and 142(1) of West Bengal Co-
Operative Societies Rules 1987 were obeyed or not.
v) Whether Rule 127(1) of West Bengal Co-Operative Societies
Rules 1987 was obeyed in case of nomination or not.
vi) Whether the disputed transfer of flat contradicted the
relevant provisions of the Bye-laws of the Defendant
Society or not.
vii) The Doctrine of estoppel as per sections 115 & 116 of the
Evidence Act 1872 whether attracted or not.”
“Keeping in view of the all above, I am of the opinion that the
transfer of the flat no. 5D of the Defendant No. 2 Society was
not done in accordance with laws including West Bengal Co-
Operative Socities Act, Rules, Indian Contract Act, Transfer of
Property Act due to reason at a glance.
1) Section 85(9), Section 70, Section 69 of West Bengal Co-
Operative Socities Act 1983 have been flouted.
2) Rule 127(1), Rule 135(3)(a), Rule 142(1) have been
flouted.
3) Bye-laws have been contradicted.
4) No consideration money was paid by the Defendant no. 1 to
the Plaintiff.
5) Societies accepted the resignation of the Plaintiff on
14.2.93 which she had not tendered, if that be so, the
society did not act as per Rule 143 also.
6) The flat in dispute was under the lease and license
agreement at the material time since bank account in this
respect was operated by the son of the Defendant no. 1 who
also deposited cheque on Plaintiff’s behalf.
7) The instant dispute case is not barred by limitation.
8) The transaction of 13.11.92 does not attract the doctrine of estoppel.”
“AWARD
Keeping in view of the above, based on documents, assessing all
the pros and cons, on the basis of equity, justice and good
conscience, I pass the following ‘AWARD’:
a) The agreement dt. 13.11.92 between the Plaintiff and
Defendant no. 1 is invalid, void and incomplete and
b) The relevant resolution dt. 14.2.93 (Agenda no. 1) of the
Managing Committee of the Defendant no. 2 is quashed and;
c) The Defendant no. 2 is directed to ensure and conform that
the plaintiff gets the possession of flat no. 5D with
garage space with immediate effect and issue share
certificate in her name immediately and
d) Any other action if any taken by any authority on and
after 13.11.92 affecting the membership of the Plaintiff in
any manner whatever is also quashed.
The above Judgment and Award have been given on
Pronouncement before the parties present.”
The Co-operative Tribunal as well as the High Court, had invoked the
principle of justice and equity, and the doctrine of fairness, while
recording their eventual findings in favour of Kalpana Mukherjee. It is,
therefore, necessary for us, to delve upon the above aspect of the matter.
Before we venture to examine the instant controversy in the above
perspective, it is necessary to record a few facts. It is not a matter of
dispute, that for a long time Pratima Chowdhury had been residing at
Bombay. She was residing at Bombay in the house of H.P. Roy and Bani Roy.
Bani Roy, as stated above, is the sister of Pratima Chowdhury. H.P. Roy is
a wealthy person. Partha Mukherjee son of Kalpana Mukherje, is an
engineering graduate from IIT, Kharagpur. He also possesses the
qualification of MBA, which he acquired from Ahmedabad. Originally Partha
Mukherjee was employed as Sales Manager/Regional Manager with Colgate
Palmolive (India) Limited, at Bombay. Partha Mukherjee married Sova
Mukherjee (the daughter of H.P. Roy), whilst he was posted at Bombay in
1987. Soon after his marriage, Partha Mukherjee and Sova Mukherjee also
started to live in the house of H.P. Roy (father-in-law of Partha
Mukherjee). The evidence available on the record of the case reveals, that
Pratima Chowdhury treated Sova Mukherjee as her daughter, and Partha
Mukherjee as her son. In 1992, Partha Mukherjee was transferred from
Bombay to Calcutta. Immediately on his transfer, Pratima Chowdhury
accommodated him in flat no. 5D. Subsequently, Colgate Palmolive (India)
Limited entered into a lease and licence agreement, in respect of flat no.
5D with Pratima Chowdhury, so as to provide residential accommodation to
Partha Mukherjee (as per the terms and conditions of his employment).
Obviously, Partha Mukherjee was instrumental in the execution of the above
lease and licence agreement. In order to deposit monthly rent payable to
Pratima Chowdhury (by Colgate Palmolive (India) Limited), Partha Mukherjee
opened a bank account in the name of Pratima Chowdhury, jointly with
himself. He exclusively operated the above account, for deposits as well
as for withdrawals. Not only that, the findings recorded by the Arbitrator
indicate that the letter dated 11.11.1992 written by Pratima Chowdhury was
drafted by Partha Mukherjee. The aforesaid conclusion was drawn from the
fact that the manuscript of the original was in the handwriting of Partha
Mukherjee. All the above facts demonstrate, a relationship of absolute
trust and faith between Pratima Chowdhury and Partha Mukherjee. The
aforesaid relationship emerged, not only on account of the fact that Partha
Mukherjee was married to Sova Mukherjee (the niece of Pratima Chowdhury),
but also on account of the fact, that Partha Mukherjee and his wife Sova
Mukherjee soon after their marriage lived in the house of H.P. Roy (husband
of the sister of Pratima Chowdhury). They resided together with Pratima
Chowdhury till 1992, i.e., for a period of more than a decade, before
Partha Mukherjee was transferred to Calcutta. In our considered view the
relationship between Partha Mukherjee and Pratima Chowdhury would
constitute a fiduciary relationship. Even though all the above aspects of
the relationship between the parties were taken into consideration, none of
the adjudicating authorities dealt with the controversy, by taking into
account the fiduciary relationship between the parties. When parties are
in fiduciary relationship, the manner of examining the validity of a
transaction, specifically when there is no reciprocal consideration, has to
be based on parameters which are different from the ones applicable to an
ordinary case. Reference in this behalf, may be made to the decision
rendered by this Court
in Subhas Chandra Das Mushib vs. Ganga Prosad Das
Mushib, AIR 1967 SC 878, wherein this Court examined the twin concepts of
“fiduciary relationship” and “undue influence” and observed as under:
“We may now proceed to consider what are the essential in- gredients
of undue influence and how a plaintiff who seeks relief on this ground
should proceed to prove his case and when the defendant is called upon
to show that the contract or gift was not induced by undue influence.
The instant case is one of gift but it is well settled that the law as
to undue influence is the same in the case of a gift inter- vivos as
in the case of a contract.
Under s. 16 (1) of the Indian Contract Act 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. This shows that the court trying a case of
undue influence must consider two things to start with, namely, (1)
are the relations between the donor and the donee such that the donee
is in a position to dominate the will of the donor and (2) has the
donee used that position to obtain an unfair advantage over the
donor'?
Sub-section (2) of the section is illustrative as to when a person is
to considered to be in a position to dominate the will of another.
These are inter alia (a) where the donee holds a real or apparent
authority over the donor or where he stands in a fiduciary relation to
the donor or (b) where he makes a contract with a person whose mental
capacity is temporarily or permanently affected by reason of age,
illness, or mental or bodily distress.
Sub-section (3) of the section throws the burden of proving that a
contract was not induced by undue influence on the person benefiting
by it when two factors are found against him, namely that he is in a
position to dominate the will of another and the transaction appears
on the face of it or on the evidence adduced to be unconscionable.
The three stages for consideration of a case of undue influence were
expounded in the case of Ragunath Prasad v. Sarju Prasad and others
(AIR 1924 PC 60) in the following words :- "In the first place the
relations between the parties to each other must be such that one is
in a position to dominate the will of the other. Once that position is
substantiated the second stage has been reached-namely, the issue
whether the contract has been induced by undue influence. Upon the
determination of this issue a third point emerges, which is that of
the onus probandi. If the transaction appears to be unconscionable,
then the burden of proving that the contract was not induced by undue
influence is to lie upon the person who was in a position to dominate
the will of the other.”
Burden lies on when fraud, mis representation or undue influence is alleged ?
Krishna Mohan Kul alias Nani Charan Kul vs. Pratima Maity, (2004) 89 SCC
468, wherein it was held as under:
“…..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 and 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.
on the subject of fiduciary relationship.
"When the relation between the donor and donee at or shortly
before the execution of the gift has been such as to raise a
presumption that the donee had influence over the donor, the
court sets aside the gift unless the donee can prove that the
gift was the result of a free exercise of the donor's will."”
(emphasis is ours)
The above conclusions recorded by this Court, came to be reiterated
recently in Anil Rishi Vs. Gurbaksh Singh, (2006) 5 SCC 558.
We will
also proceed by keeping in mind, what we have already concluded in the
preceding paragraph, i.e., that relationship between Partha Mukherjee and
Pratima Chowdhury was a relationship of faith, trust and confidence.
Partha Mukherjee was in a domineering position. He was married to Sova
Mukherjee. Sova Mukherjee is the daughter of H.P. Roy. Pratima Chowdhury
has lived for a very long time in the house of H.P. Roy. During that
period (after his marriage) Partha Mukherjee also shared the residential
accommodation in the same house with Pratima Chowdhury, for over a decade.
In Indian society the relationship between Partha Mukherjee and Pratima
Chowdhury, is a very delicate and sensitive one. It is therefore, that
Pratima Chowdhury extended all help and support to him, at all times. She
gave him her flat when he was transferred to Calcutta. She also extended
loans to him, when he wanted to set up an independent business at Bombay.
These are illustrative instances of his authority, command and influence.
Instances of his enjoying the trust and confidence of Pratima Chowdhury
include, amongst others, the joint account of Pratima Chowdhury with Partha
Mukherjee, which the latter operated exclusively, and the drafting of the
letters on behalf of Pratima Chowdhury. In such fact situation, we are of
the view, that the onus of substantiating the validity and genuineness of
the transfer of flat no. 5D, by Pratima Chowdhury, through the letter dated
11.11.1992 and the document dated 13.11.1992, rested squarely on the
shoulders of Kalpana Mukherjee. Because it was only the relationship
between Partha Mukherjee and Pratima Chowdhury, which came to be extended
to Kalpana Mukherjee. The document dated 13.11.1992 clearly expressed,
that the above transfer was without consideration. Kalpana Mukherjee in
her written reply before the Arbitrator asserted, that the above transfer
was on a consideration of Rs.4,29,000/-. The Arbitrator in his order dated
5.2.1999 concluded, that Kalpana Mukherjee could not establish the passing
of the above consideration to Pratima Chowdhury. The Cooperative Tribunal,
as well as, the High Court, despite the factual assertion of Kalpana
Mukherjee were of the view, that passing of consideration was not essential
in determination of the genuineness of the transaction. We are of the
view, that the Cooperative Tribunal, as well as, the High Court seriously
erred in their approach, to the determination of the controversy. Even
though the onus of proof rested on Kalpana Mukherjee, the matter was
examined by requiring Pratima Chowdhury to establish all the alleged facts.
We are of the view, that Kalpana Mukherjee miserably failed to discharge
the burden of proof, which essentially rested on her. Pratima Chowdhury
led evidence to show, that she was at Bombay on 11.11.1992 and 13.11.1992.
In view of the above, the letter dated 11.11.1992 and the document dated
13.11.1992, shown to have been executed at Calcutta could not be readily
accepted as genuine, for the said documents fell in the zone of suspicion,
more so, because the manuscript of the letter dated 11.11.1992 was in the
hand-writing of Partha Mukherjee. Leading to the inference, that Partha
Mukherjee was the author of the above letter. It is therefore not
incorrect to infer, that there seems to be a ring of truth, in the
assertion made by Pratima Chowdhury, that Partha Mukherjee had obtained her
signatures for executing the letter and document referred to above. We
find no justification whatsoever for Pratima Chowdhury, to have transferred
flat no. 5D to Kalpana Mukherjee, free of cost, even though she had
purchased the same for a consideration of Rs. 4 lakhs in the year 1987.
Specially so, when she had no direct intimate relationship with Kalpana
Mukherjee. By the time the flat was transferred, more than a decade had
passed by, during which period, the price of above flat, must have
escalated manifold. Numerous other factual aspects have been examined by
us above, which also clearly negate the assertions made by Kalpana
Mukherjee. The same need not be repeated here, for reasons of brevity.
Keeping in mind the above noted aspects, we are of the considered view,
that invocation of the principle of justice and equity, and the doctrine of
fairness, would in fact result in returning a finding in favour of Pratima
Chowdhury, and not Kalpana Mukherjee.
For the reasons recorded hereinabove, the instant appeal is allowed,
the order dated 16.5.2002 passed by the Co-operative Tribunal, and the
order dated 14.2.2006 passed by the High Court, are hereby set aside. The
determination rendered by the Arbitrator in his award dated 5.2.1999, is
hereby affirmed. Kalpana Mukherjee is directed to handover the possession
of flat no. 5D to Pratima Chowdhury, within one month from today. The
Society is also directed to retransfer the shares of the Society earlier
held by Pratima Chowdhury, and the ownership rights of flat no. 5D to the
name of Pratima Chowdhury, without any delay.
2014 ( Feb. Part)judis.nic.in/supremecourt/filename=41212
P SATHASIVAM, JAGDISH SINGH KHEHAR
“REPORTABLE”
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1938 OF 2014
(Arising out of SLP (Civil) Nos. 15252 of 2006)
Pratima Chowdhury …Appellant
Versus
Kalpana Mukherjee & Anr. ...Respondents
J U D G M E N T
JAGDISH SINGH KHEHAR, J.
1. Orchestra Co-operative House Society Limited (hereinafter referred to
as ‘the Society’) raised flats at 48/IE, Gariahat Road, Calcutta – 700019.
Indirani Bhattarcharya became a member of the Society on 12.1.1987. She
was issued share certificates bearing nos. 0047 and 0048.
Based on the
above membership she was allotted flat no. 5D for a consideration of Rs. 4 lakhs.
The above flat measuring 900 sq. ft. comprised of three bed rooms,
two bath rooms, one drawing-cum-dinning room, a kitchen and verandah on the
fourth floor.
In addition to the above, she was allotted one covered
garage space on the ground floor.
The transfer of the flat no. 5D by the
Society to Indirani Bhattacharya was approved by the Deputy Registrar, Co-
operative Societies.
2. On 27.3.1991, Indirani Bhattacharya submitted her resignation from
the Society in favour of Pratima Chowdhury (i.e., the petitioner herein).
On 15.4.1991, Indirani Bhattacharya executed an agreement for transfer of
flat no. 5D to Pratima Chowdhury subject to the consent of the Society and
the approval of the Deputy Registrar, Co-operative Societies, for a
consideration of Rs. 4 lakhs. The Society having consented to the request
of Indirani Bhattacharya sought the approval of the Deputy Registrar, Co-
operative Societies through a letter dated 29.4.1991.
In this behalf it
would also be relevant to mention that Board of Directors of the Society
had resolved in its meeting held on 16.2.1992, to accept the resignation of
Indirani Bhattacharya, as also, the consequential transfer of the
membership of the Society and the ownership of the flat to the name of
Pratima Chowdhury.
In the above resolution, the name of Pratima Chowdhury
as a member of the Society was approved with effect from 9.1.1992. The
Secretary of the Society informed Pratima Chowdhury on 17.2.1992, that her
membership to the Society, as also, the transfer of flat no. 5D to her
name, had been approved by the Deputy Registrar, Co-operative Societies.
3. The facts available on the records reveal that Partha Mukherjee (son-in-
law of the petitioner’s sister, and son of the respondent) occupied the
petitioner’s flat.
Partha Mukherjee was employed as Regional Sales Manager
with Colgate Palmolive (India) Limited. On 9.3.1992, Colgate Palmolive
(India) Limited, confirmed having taken flat no. 5D on lease and license,
for a period of three years (with effect from 1.4.1992), for the residence
of Partha Mukherjee. The pleadings also reveal, that with effect from
1.4.1992, Colgate Palmolive (India) Limited, took the aforesaid flat on a
monthly rent of Rs. 5,000/-. The above said monthly rent, was deposited in
the joint account of the petitioner Pratima Chowdhury and Partha Mukherjee.
4. On 29.6.1992, the petitioner Pratima Chowdhury addressed a letter to
the Secretary of the Society, requesting the Society to transfer flat no.
5D to the name of her nominee Kalpana Mukherjee.
The letter dated
29.6.1992 of Pratima Chowdhury, made some express factual disclosures.
Firstly, that she was not in good health.
Secondly, that she was not in a
position to move to Calcutta from Bombay in the near future.
Thirdly, that
Kalpana Mukherjee was already residing in the flat in question along with
Partha Mukherjee.
Fourthly, that above nominee Kalpana Mukherjee was her
close relative. In addition to the request of transfer of flat no. 5D in
favour of her nominee Kalpana Mukherjee, Pratima Chowdhury also informed
the Society through her letter dated 29.6.1992, that all municipal taxes
and service charges in connection with the above flat should be collected
from Kalpana Mukherjee.
5. Pratima Chowdhury then addressed another letter dated 11.11.1992, to
the Secretary of the Society, reiterating her request made in the previous
letter dated 29.6.1992 wherein she again expressed clearly that the
transfer being sought by her, was without any monetary consideration.
6. It was pointed out in letter dated 11.11.1992, that the formal request
for the transfer was only being made, in order to comply with the rules
regulating such transfer, and also, to avoid future complications.
Consequent upon the aforesaid deliberations, Pratima Chowdhury executed an
agreement dated 13.11.1992, transferring her right, title and interest in
the flat no. 5D. On the same day as the aforesaid agreement was executed,
Kalpana Mukherjee moved an application (on 13.11.1992).
7. The Board of Directors of the Society in their meeting held on
14.2.1993, resolved to accept the resignation of Pratima Chowdhury, and to
accept the membership of Kalpana Mukherjee (in place of Pratima Chowdhury),
and to seek the approval of the Deputy Registrar, Co-operative Societies
for the transfer of flat no. 5D to the name of Kalpana Mukherjee, on the
basis of letters of Pratima Chowdhury dated 11.11.1992 and 13.11.1992.
Accordingly, the Secretary of the Society addressed a letter dated
10.3.1993 to the Deputy Registrar, Co-operative Societies, for the approval
of the decision of the Board of Directors (of the Society, dated
14.2.1993).
8. On 23.4.1993, Pratima Chowdhury wrote a letter to the Senior Commercial
Executive, of the Calcutta Electric Supply Corporation (South Region
Office) requesting him to transfer the electricity-supply meter of flat no.
5D to the name of Kalpana Mukherjee. The instant letter dated 23.4.1993,
is also disputed by Pratima Chowdhury. She has even disputed her signature
on the said letter. She also filed a first information report at the
Gariahat Police Station, Kolkata, complaining that her signature on the
above letter was forged.
9. The Assistant Registrar, Co-operative Societies raised certain
objections on the request of the Society for transfer of flat no. 5D from
the name of Pratima Chowdhury to the name of Kalpana Mukherjee. In this
behalf the Assistant Registrar, Co-operative Societies informed the
Secretary of the Society, that the application of Kalpana Mukherjee for
membership had not been submitted in the proper format. It was also
pointed out, that the original affidavit had not been appended to the
application. Lastly, it was brought out, that the Salary Certificate,
Income Tax Clearance Certificate and Professional Tax Certificates had not
been appended to the application of Kalpana Mukherjee, for the transfer of
the flat in her name. On 22.9.1993, the Secretary of the Society provided
all the required documents sought by the Department of the Co-operative
Societies.
10. Partha Mukherjee was transferred by his employer Colgate Palmolive
(India) Limited, from Calcutta to Bombay. Consequently, Colgate Palmolive
(India) Limited terminated the agreement executed by it with Pratima
Chowdhury on 19.10.1993, with immediate effect. In the letter dated
19.10.1993, Colgate Palmolive (India) Limited required Partha Mukherjee to
hand over vacant possession of flat no. 5D to Pratima Chowdhury, after
refund of security. On 21.10.1993, Kalpana Mukherjee, from her own
account, deposited rent in the Bank account of Pratima Chowdhury. On
28.10.1993, Partha Mukherjee addressed a letter to P.R. Keswani, Company
Secretary of Colgate Palmolive (India) Limited, along with a receipt
bearing no. 9893, depicting refund of the security deposit (of Rs. 60,000/-
). The aforesaid refund was shown to have been made by Pratima Chowdhury.
11. On 16.12.1994, 500 shares of Tata Chemicals Limited, 50 shares of
Siemens, 500 shares of Indian Aluminium and 100 shares of I.T.C. Hotels,
standing in the joint names of Partha Mukherjee and Sova Mukherjee (wife of
Partha Mukherjee) were transferred to the name of Pratima Chowdhury.
According to the petitioner Pratima Chowdhury, the above transfer of shares
was in lieu of loans extended by her to Partha Mukherjee. However,
according to Kalpana Mukherjee, the transfer of the above shares,
constituted consideration paid on her behalf (by her son Partha Mukherjee)
to Pratima Chowdhury in lieu of the transfer of flat no. 5D.
12. Pratima Chowdhury wrote a letter dated 28.2.1995 to the Secretary of
the Society, that she had not received any reply to her letter dated
11.11.1992. She also informed the Secretary of the Society, that she had
decided to return to Calcutta permanently. Accordingly, she informed the
Secretary of the Society, that her request for transfer of her membership
to the name of Kalpana Mukherjee, be treated as withdrawn. It is the case
of Pratima Chowdhury, that the Society never responded to her letter dated
28.2.1995. It is also her case, that her letter dated 28.2.1995 was never
forwarded by the Society, to the Department of Co-operative Societies.
13. On 8.3.1995, the Society approached the Deputy Registrar, Co-operative
Societies, seeking approval for the admission of Kalpana Mukherjee as a
member of the Society (in place of Pratima Chowdhury). On 13.3.1995, the
Deputy Registrar, Co-operative Societies conditionally approved the
membership of Kalpana Mukherjee. Accordingly, on 13.3.1995 itself the
shares of Pratima Chowdhury were transferred to the name of Kalpana
Mukherjee.
On 22.3.1995, Pratima Chowdhury addressed a letter to the
Deputy Registrar, Co-operative Societies, with a copy to the Chairman of
the Society. In the above letter, the Deputy Registrar, Co-operative
Societies was requested to direct the Society to withdraw the offer of
transfer of her membership to Kalpana Mukherjee. It was also requested,
that the application made by Kalpana Mukherjee for transfer of share
certificates in her name, be not approved. The instant letter dated
22.3.1995, depicts the fact that Pratima Chowdhury was unaware of the
deliberations of the Society, as also, the approval (of the deliberations
of the Society), by the Deputy Registrar, Co-operative Societies, on
13.3.1995. In pursuit of the same objective, Pratima Chowdhury wrote
another letter dated 28.3.1995, to the Secretary of the Society. She
enclosed therewith, the letter which she had addressed to the Deputy
Registrar, Co-operative Societies dated 22.3.1995. Therein, she again
reiterated, that her request for transfer of membership in favour of
Kalpana Mukherjee be treated as withdrawn. In order to consider the
request made by Pratima Chowdhury in her letter dated 22.3.1995 (to the
Deputy Registrar, Co-operative Societies) and the letter dated 28.3.1995
(to the Secretary of the Society); the Society convened a meeting of the
Board of Directors on 2.4.1995. Rather than considering the issue on
merits, the Board of Directors resolved, that it had no legal competence to
restore the membership of the Society, as also, the retransfer of the
ownership of the flat no. 5D, to Pratima Chowdhury. Having so resolved,
the Secretary of the Society forwarded a copy of the resolution dated
2.4.1995, to the petitioner on 10.4.1995.
14. At this juncture, it would be relevant to mention, that the Board of
Directors of the Society approved the transfer of flat no. 5D (comprising
of three bed rooms, two bath rooms, one drawing-cum-dinning room, one
verandah and one kitchen on the fourth floor, located at no. 48/IE,
Gariahat Road, Calcutta - 700019 to the name of Kalpana Mukherjee. In
addition to the aforesaid flat, the ownership of Pratima Chowdhury also
comprised of a covered garage space, on the ground floor. The same were
not mentioned in the clearances dated 14.2.1993 (by the Board of Directors
of the Society) and 13.3.1995 (by the Deputy Registrar, Co-operative
Societies). Consequently based on the agreement dated 25.4.1995 between
Kalpana Mukherjee and the Society, the said garage space was also
subsequently transferred to the name of Kalpana Mukherjee.
15. On 16.4.1995 within two weeks, from the date decision taken by the
Board of Directors (on 2.4.1995) and within one week from the date of
communication thereof to the petitioner (through letter dated 10.4.1995),
Pratima Chowdhury addressed a notice dated 16.4.1995, contesting the
validity of the Board of Directors’ Resolution dated 2.4.1995. The
petitioner also assailed the approval of the said transfer dated 13.3.1995.
The Deputy Registrar, Co-operative Societies referring to the petitioner’s
letter dated 28.2.1995 (wherein Pratima Chowdhury had withdrawn her request
for transfer of membership in favour of Kalpana Mukherjee), wrote a letter
dated 31.5.1995 to the Secretary of the Society. In the letter dated
31.5.1995, the Deputy Registrar, Co-operative Societies also highlighted
the fact that, the Society had not brought the letter dated 28.2.1995 to
the notice of Deputy Registrar, Co-operative Societies, at the time of
seeking approval of the Co-operative Department. The Secretary of the
Society was accordingly directed, to take a decision on the matter, and to
forward the same to the Deputy Registrar, Co-operative Societies. Being
alive of the letter dated 31.5.1995, which was addressed by the Deputy
Registrar, Co-operative Societies to the Secretary of the Society, the
petitioner through her letter dated 13.6.1995 informed the Secretary of the
Society, that the withdrawal letter dated 28.2.1995 addressed by her was
received by the Secretary of the Society, and further that the same had
been duly acknowledged on 6.3.1995. The petitioner highlighted the fact,
that the approval of the Deputy Registrar, Co-operative Societies should
not have been sought (by the Secretary of the Society), after the receipt
of the petitioner’s communication dated 28.2.1995.
16. Since, the petitioner was not communicated any determination, by the
concerned authorities. She addressed a notice on 9.9.1995, calling upon
the Secretary of the Society, to deliver the possession of the flat no. 5D,
along with the share certificates, to her within seven days of the receipt
of the said notice. On 21.11.1995, the Society denied all the allegations
made by the petitioner against the Society (contained in the notice). On
the claim of retransfer of the shares and flat made by the petitioner, the
Society responded by asserting, that the shares had been transferred to the
name of Kalpana Mukherjee, and on the basis thereof flat no. 5D also had
been transferred in her name, thereupon, the Society did not have any legal
authority to restore/retransfer the same to the name of the petitioner. On
19.12.1995, the Deputy Registrar, Co-operative Societies also informed
Pratima Chowdhury, that the transfer of her shares and flat in favour of
Kalpana Mukherjee had been completed, and since the Society had resolved on
2.4.1995 that it had no legal competence to cancel the same, nothing could
be done in the matter.
17. Dissatisfied with the determination of the Co-operative Societies, as
also, the denial of the consideration at the hands of the Deputy Registrar,
Co-operative Societies, the petitioner filed Dispute Case No. 29/RCS of
1995-96. The aforesaid dispute case was adjudicated upon by D.K. Ghosh in
his capacity as Arbitrator.
17(i) During the course of the above determination, Kalpana Mukherjee (who
was impleaded as respondent no. 1) filed a reply on 22.2.1996 which
deserves a special mention.
Firstly, according to the reply filed by
Kalpana Mukherjee flat no. 5D was purchased by Partha Mukherjee in the name
of Kalpana Mukherjee (mother of Partha Mukherjee). The above flat was
purchased for a total consideration of Rs. 4,29,000/-. The said
consideration was paid by way of transfer of shares, in the name of Partha
Mukherjee to the name of Pratima Chowdhury. Highlighting the above factual
position is important because the entire paper work pertaining to the
transfer of flat no. 5D, from the name of Pratima Chowdhury to the name of
Kalpana Mukherjee indicates, that the above transfer was without any
monetary consideration, whereas stands adopted by Kalpana Mukherjee was
that as a matter of fact the said transfer was on a consideration of Rs.
4,29,000/-. Secondly, according to Kalpana Mukherjee (respondent no. 1),
Pratima Chowdhury’s letter dated 28.2.1995 was afterthought. It is
therefore, that Kalpana Mukherjee in her reply emphasized that the letter
dated 28.2.1995, was only a scheme devised by Pratima Chowdhury to wriggle
out of the transaction.
17(ii) The Secretary of the Society filed separate written reply to
the case filed by Pratima Chowdhury. In its reply the Society supported
the transfer of shares, as also, the transfer of flat no. 5D to the name of
Kalpana Mukherjee. The Society clearly brought out in their reply, that
Pratima Chowdhury through her letter dated 29.6.1992 had informed the
Society, that Kalpana Mukherjee was in occupation of the flat, and as such,
maintenance charges for the flat should be recovered from her.
Furthermore, according to the Society, the transfer of the shares, as also,
of flat no. 5D to the name of Kalpana Mukherjee was approved at the request
of Pratima Chowdhury, made through her letter dated 11.11.1992. It was
submitted, that the aforesaid request was considered by the Department of
Co-operative Societies, which approved the resignation of Pratima Chowdhury
and the consequential transfer of membership vide Resolution of the Board
of Directors of the Society dated 14.2.1993. The above resolution had been
forwarded by the Secretary of the Society, to the Deputy Registrar, Co-
operative Societies (by letter dated 10.3.1993), for approval. It was
pointed out that the Deputy Registrar, Co-operative Societies had approved
the Resolution of Board of Directors of the Co-operative Societies on
13.3.1995. Additionally, it was pointed out, that after the approval of
the change of membership to the name of Kalpana Mukherjee, the petitioner
Pratima Chowdhury had required the Senior Commercial Executive of Calcutta
Electric Supply Corporation, to transfer the electricity-supply meter of
flat no. 5D to the name of Kalpana Mukherjee. According to the Society,
the above facts clearly evidenced the unequivocal intention of Pratima
Chowdhury to transfer her shares and flat no. 5D to the name of Kalpana
Mukherjee, which was given due effect to by the Society after seeking the
approval of the Deputy Registrar, Co-operative Societies. In view of the
aforestated factual position, the Society denied the claim raised by
Pratima Chowdhury in Dispute Case No. 29/RCS of 1995-96.
17(iii) It is also imperative to record herein, that Pratima Chowdhury
had filed rejoinder, to the written statements filed on behalf of Kalpana
Mukherjee and the Society before the Arbitrator. It was pointed out in the
rejoinder, that Partha Mukherjee was married to Sova Mukherjee. Sova
Mukherjee was the daughter of H.P. Roy and Bani Roy (sister of the
petitioner, Pratima Chowdhury). On account of the above relationship she
had treated Sova Mukherjee as her daughter and Partha Mukherjee as her son.
Consequently on the transfer of Partha Mukherjee to Calcutta (from
Bombay), she allowed him to reside in flat no. 5D. At the behest of Partha
Mukherjee, his employer Colgate Palmolive (India) Limited entered into a
lease agreement with Pratima Chowdhury on 9.3.1992. Under the lease
agreement Pratima Chowdhury was entitled to rent at the rate of Rs. 5,000/-
per month. The lease agreement was executed for a period of three years,
with overriding condition, that the tenure of lease would coincide with
the tenure of Partha Mukherjee at Calcutta, while in the employment of
Colgate Palmolive (India) Limited. It was also pointed out, that Partha
Mukherjee had opened a joint account along with petitioner Pratima
Chowdhury, for the deposit of rent payable by Colgate Palmolive (India)
Limited. It was also pointed out, that Partha Mukherjee singularly
operated the aforesaid joint account. In his above capacity he encashed
the rent deposited by Colgate Palmolive (India) Limited, without the
knowledge and notice of the petitioner Pratima Chowdhury. She also
asserted in the rejoinder, that she could obtain the details of the
agreement executed with Colgate Palmolive (India) Limited, as also, the
deposits of rent in her joint account with Partha Mukherjee, only after she
had issued a letter to Colgate Palmolive (India) Limited, that she would
not make any claim from the employer of Partha Mukherjee, on the basis of
information supplied. In her rejoinder Pratima Chowdhury also asserted,
that Partha Mukherjee had forced her to sign the letter dated 11.11.1992,
without disclosing the contents thereof. The categoric stance adopted by
Pratima Chowdhury in her rejoinder was, that she was not aware of the
contents of letter dated 11.11.1992, and furthermore, Partha Mukherjee had
obtain her signature on other blank papers as well, by falsely informing
her that the papers would be used to explain his stay in flat no. 5D. She
also denied having executed the document dated 13.11.1992, which was
allegedly notarized at Calcutta. In fact she denied her presence at
Calcutta on 13.11.1992. She further stated, that Partha Mukherjee did not
remain in employment of Colgate Palmolive (India) Limited after his
transfer to Bombay. It was also pointed out by her, that on his return to
Bombay, Partha Mukherjee started his independent business in aluminium
products. For the said business Pratima Chowdhury claims to have advanced
a loan of Rs.2 lakhs to Partha Mukherjee. The loan stated to have been
extended to Partha Mukherjee was by way of a cheque drawn in favour of
Bharat Aluminium Company, for the supply of raw material for the business
of Partha Mukherjee. She further contended, that Partha Mukherjee also
took loan of Rs. 1,50,000/- from Bani Roy (sister of the petitioner,
Pratima Chowdhury). It was pointed out, that the share certificates held
by Partha Mukherjee jointly with his wife Sova Mukherjee, were transferred
to the petitioner Pratima Chowdhury and her sister Bani Roy during the year
1994, toward repayment of loans taken from them by Partha Mukherjee. The
position accordingly adopted was, that the transfer of share certificates
did not constitute consideration in lieu of the transfer of flat no. 5D to
Kalpana Mukherjee. A categoric assertion was made by the petitioner
Pratima Chowdhury in her rejoinder, that on 30.11.1992 Partha Mukherjee had
no company shares either in his own name or in the name of his wife Sova
Mukherjee (nor in the joint names of the husband and wife). Accordingly,
the plea raised by Kalpana Mukherjee in her reply (to the dispute case
filed by the petitioner Pratima Chowdhury) was that the transfer
transaction was for consideration, and that, the payment of consideration
made by transfer of shares from the name of Partha Mukherjee to the name of
Pratima Chowdhury, was false. Pratima Chowdhury also denied, that she had
addressed a letter dated 23.4.1993 to the Senior Commercial Executive of
the Calcutta Electric Supply Corporation (South Region Office). She
disputed even her signatures on the above letter, and further asserted,
that she had filed a first information report at the Gariahat Police
Station, Kolkata. On the basis of the factual position noticed
hereinabove, the petitioner Pratima Chowdhury reiterated, that she had
neither surrendered, nor resigned from the membership of the Society, nor
had she sought the transfer of flat no. 5D from her name to the name of
Kalpana Mukherjee.
18. Before the Arbitrator, the petitioner examined three witnesses. She
examined herself as PW1, she examined Vani Ganapati as PW2 and H.P. Roy as
PW3. H.P. Roy PW3 (is married to Bani Roy, the sister of the petitioner
Pratima Chowdhury) is the father-in-law of Partha Mukherjee. Kalpana
Mukherjee examined four witnesses in her defence. She examined herself as
DW1, Partha Mukherjee her son was examined as DW2, the Secretary of the
Society was examined as DW3 and S.N. Chatterjee, Advocate, who had
notarized the documents referred to above, was examined as DW4.
19. In the process of adjudicating upon the matter, the Arbitrator framed
six issues of fact, and seven issues of law. The same are being extracted
hereunder:
“QUESTIONS OF FACT INVOLVED
i) Whether the Plaintiff tendered resignation on 11.11.92 from
the membership of the Society or not.
ii) Was the document executed on 13.11.92 a deed of transfer of
flat or an agreement for transfer of flat.
iii) Whether consideration money was paid by the Defendant no. 1
to the plaintiff or not.
iv) Whether the payment of consideration money by way of
transfer of shares of companies can be treated as valid
payment of consideration money or not.
v) Whether the Defendant no. 2 accepted the admission of the
membership of the Defendant no. 1 on 14.2.93 or
vi) Whether the flat in question was encumbered due to
existence of lease and license agreement at the material
point of time i.e. on 11.11.92 or on 13.11.92.
“QUESTIONS OF LAW INVOLVED
i) Whether the instant dispute is barred by law of limitation.
ii) Whether sub-section 9 of section 85 of West Bengal Co-
Operative Societies Act, 1983 was followed in case of
transfer of flat in question of the plaintiff.
iii) Whether section 69 and 70 of the West Bengal Co-Operative
Societies Act 1983 were followed in respect of admission of
membership of the Defendant no. 1.
iv) Whether Rules 135(3) (a) and 142(1) of West Bengal Co-
Operative Societies Rules 1987 were obeyed or not.
v) Whether Rule 127(1) of West Bengal Co-Operative Societies
Rules 1987 was obeyed in case of nomination or not.
vi) Whether the disputed transfer of flat contradicted the
relevant provisions of the Bye-laws of the Defendant
Society or not.
vii) The Doctrine of estoppel as per sections 115 & 116 of the
Evidence Act 1872 whether attracted or not.”
20. It is necessary for us to briefly record the factual as also the
legal conclusions drawn by the Arbitrator in his order dated 5.2.1999,
while disposing of the disputes raised by Pratima Chowdhury. Accordingly
we are summarizing the same hereunder:-
(i) In respect of the letter dated 11.11.1992, the Arbitrator observed
that the same was drafted by Partha Mukherjee. This inference came to be
drawn from the manuscript of the original. The Arbitrator pointed out that
the letter dated 11.11.1992, disclosed that the transaction was not based
on passing of monetary consideration, whereas, Kalpana Mukherjee had
expressly asserted in her defence, that the transaction was executed on an
agreed consideration of Rs. 4,29,000/-. Kalpana Mukherjee had also
affirmed, that the aforesaid consideration had passed from the transferee
to the transferor by transfer of shares of Partha Mukherjee, to the name of
Pratima Chowdhury. The Arbitrator relying on the contents of the letter
dated 11.11.1992, recorded that the letter itself mentioned that the
details disclosed therein, were meant purely to comply with the rules and
to avoid future complications. The Arbitrator felt, that if Pratima
Chowdhury had the intention to sell the flat, she would have mentioned the
same in her letter dated 11.11.1992. It was also observed by the
Arbitrator, that there was no justification for not mentioning the monetary
consideration in the said letter. On the instant aspect of the matter the
Arbitrator was of the view, that the disclosure of the above consideration
would have clearly avoided future complications (which seem to be the
intention for writing the letter dated 11.11.1992). The Arbitrator also
pointed out, that the letter dated 11.11.1992 could not be treated as a
letter of resignation of the petitioner Pratima Chowdhury from the Society.
In this behalf it was noticed, that the word “resignation” was completely
absent from the text of the letter dated 11.11.1992.
(ii) In respect of letter dated 13.11.1992 the Arbitrator pointed out,
that the same was notarized by S.N. Chatterjee, Advocate, who was the son-
in-law of the sister of Kalpana Mukherjee (defendant No. 1, before the
Arbitrator). Although, the above notary stated that the letter dated
13.11.1992 was signed by all the parties concerned before him at Calcutta,
he acknowledged, that he did not issue any notarian certificate in terms of
Section 8 of the Notary Act. According to the Arbitrator, Pratima
Chowdhury and all the witnesses appearing for her, had unequivocally and
categorically affirmed, that she (Pratima Chowdhury) was in Bombay on
11.11.1992, as also, on 13.11.1992. Therefore, according to the
Arbitrator, the question of her appearing before the notary at Calcutta on
13.11.1992, did not arise at all. According to the Arbitrator, the
registration number of the Society had not been mentioned in the document
dated 13.11.1992, this according to the Arbitrator, made the document
suspicious because Anil Kumar Sil, the Secretary of the Society, had
mentioned that the above document dated 13.11.1992 was executed at his
residence. If the above factual position was correct, according to the
Arbitrator, the registration number would have been supplied by the
Secretary of the Society, and would have been mentioned in the document
itself. Furthermore, according to the Arbitrator, the document dated
13.11.1992 was in the nature of deed of transfer, but such transfer would
materialize after (and not before) the consent of the Board of Directors of
the Society, and the approval of the Deputy Registrar, Co-operative
Societies. As per the Arbitrator, even the first step towards transfer of
flat no. 5D had not commenced on 13.11.1992, and therefore, the question of
allotment and handing over the possession of the flat to the nominee
Kalpana Mukherjee, in accordance with the terms and conditions of the
allotment and bye-laws of the Society did not arise either in law or in
fact, as has been wrongly stated in the said document dated 13.11.1992. As
per the Arbitrator even the document dated 13.11.1992 was silent on the
consideration for such transfer, despite Kalpana Mukherjee expressing that
the above transfer was for a sale consideration of Rs. 4,29,000/-.
According to the Arbitrator, the possession of Kalpana Mukherjee, was
through Partha Mukherjee, because of the lease and license agreement
between Pratima Chowdhury and Colgate Palmolive (India) Limited (which
commenced on 1.4.1992 and was terminated on 19.10.1993), and not on the
basis of the document dated 13.11.1992. The Arbitrator also pointed out,
that Kalpana Mukherjee had deposited rent in the account of Pratima
Chowdhury on 21.10.1993, describing it as rent payable to Pratima
Chowdhury. The Arbitrator further observed that Pratha Mukherjee in his
letter dated 28.10.1993 mentioned Pratima Chowdhury as the landlady of flat
no. 5D. Based on the above two instances of 21.10.1993 and 28.10.1993, the
Arbitrator was of the view, that the assertion of transfer of flat no. 5D
by Pratima Chowdhury to Kalpana Mukherjee stood clearly annihilated.
(iii) On the issue of the consideration money, the Arbitrator noted, that
Kalpana Mukherjee had stated in her defence, that the parties had orally
settled the passing of consideration in lieu of flat no. 5D, at
Rs.4,29,000/-. It was also her contention, that the parties had settled
that the above agreed consideration would be paid by Partha Mukherjee to
Pratima Chowdhury by transferring his shares in different companies to the
name of Pratima Chowdhury. But Pratima Chowdhury categorically denied the
passing of any consideration, as she had no intention to sell the property.
She also asserted, that the shares shown to have been transferred from the
name of Partha Mukherjee to the name of Pratima Chowdhury, were acquired by
Partha Mukherjee long after November, 1992 (when the letters dated
11.11.1992 and 13.11.1992 were issued) i.e. from August, 1993 to April,
1994. The details of the transfer of shares was disclosed in the award
passed by the Arbitrator as under:-
“COMPANY’S NAME NO. OF SHARES ACQUIRED
Tata Chemicals Ltd. 50 nos. 8.9.93
Tata Chemicals Ltd. 450 nos. 27.10.93
Siemens 50 nos. 2.8.93
Indian Aluminium 500 nos. 4.3.94
I.T.C. Hotels 100 nos. acquired with
Mr. H.P. Roy
4.4.94”
The above shares were acquired by Partha Mukherjee jointly, either with his
wife or with his father-in-law, long after the material point of time.
Pratima Chowdhury’s assertion before the Arbitrator, questioning
truthfulness of the assertion of Kalpana Mukherjee, was also based on the
fact that, Kalpana Mukherjee (or Partha Mukherjee) could not have agreed to
transfer to Pratima Chowdhury, what they did not themselves hold when the
transaction was allegedly executed. In order to falsify the contention of
Kalpana Mukherjee (and Partha Mukherjee) that consideration was paid to
Pratima Chowdhury by transfer of shares as noticed above, it was stated
that after Partha Mukherjee was transferred from Calcutta to Bombay in the
year 1993, he did not continue with his employment with Colgate Palmolive
(India) Limited, as he wanted to start a business of aluminium products
with one R.K. Sen in Bombay. Keeping in view the above objective, Partha
Mukherjee took a loan of Rs. 2 lakhs from Pratima Chowdhury. The above
loan was extended by Pratima Chowdhury by way of cheques drawn in favour of
Bharat Aluminium Company Limited for supply of raw materials for Partha
Mukherjee’s business. It was further contended that Partha Mukherjee
similarly took a loan of Rs. 2 lakhs from his own wife Sova Mukherjee which
was repaid by Partha Mukherjee through cheques (bearing nos. 021865, 021866
and 021867) drawn on the Bank of Baroda. It was further pointed that
Partha Mukherjee had similarly taken a loan for a sum of Rs.1.5 lakhs for
the same purpose from Bani Roy (his mother-in-law) which he had still not
repaid. It was pointed out, that at the asking of H.P. Roy (his own father-
in-law, father of Sova Mukherjee) Partha Mukherjee had transferred share
certificates standing in his name, and in the name of his wife Sova
Mukherjee, to the name of Pratima Chowdhury, towards repayment of the
abovementioned loans. Accordingly, the case of Pratima Chowdhury was, that
transfer of shares by Partha Mukherjee to the name of Pratima Chowdhury,
was for a completely different transaction, and had nothing to do with the
allowing of the usage and occupation of the flat, by Kalpana Mukherjee and
Partha Mukherjee.
(iv) On the lease and license agreement the Arbitrator noticed, that
Partha Mukherjee (son of Kalpana Mukherjee), and son-in-law of Pratima
Chowdhury’s sister Bani Roy, was allowed to reside in flat no. 5D,
consequent upon his transfer from Bombay to Calcutta (while in the
employment of Colgate Palmolive (India) Limited). It was also noticed,
that the lease and license agreement, was executed by Colgate Palmolive
(India) Limited, at the instance of Partha Mukherjee, for a monetary
consideration of Rs. 5,000/- per month, as rent payable to Pratima
Chowdhury. To deposit the above consideration Partha Mukherjee opened a
joint account in the names of Pratima Chowdhury and himself. The
Arbitrator noted, that when Partha Mukherjee drafted the letter dated
11.11.1992, he utterly neglected to mention the subsisting lease and
license agreement between Colgate Palmolive (India) Limited and Pratima
Chowdhury. The Arbitrator also noticed, that Kalpana Mukherjee did not
inform Colgate Palmolive (India) Limited that flat no. 5D had been
transferred from the name of Pratima Chowdhury to her name. On the
contrary the Arbitrator pointed out, that Kalpana Mukherjee on 21.10.1993,
deposited rent in the account of Pratima Chowdhury, by filing the bank
deposit slips. Furthermore, the Arbitrator noticed, that Partha Mukherjee
in his letter dated 28.10.1993 mentioned, that Pratima Chowdhury as the
landlady of flat no. 5D. According to the Arbitrator, the above factual
position clearly indicates, that Kalpana Mukherjee along with her son
Partha Mukherjee were aware, that flat no. 5D belonged to the petitioner,
even on 21/28.10.1993. Whereas, they wrongly depicted the transfer thereof
from the name of Pratima Chowdhury to the name of Kalpana Mukherjee through
letter dated 11.11.1992 and 13.11.1992. Since the lease and license
agreement between Colgate Palmolive (India) Limited and Pratima Chowdhury
continued from 1.4.1992 to 19.10.1993, there was no question of handing
over of possession thereof by Pratima Chowdhury to Kalpana Mukherjee.
(v) On the submissions advanced on behalf of Pratima Chowdhury in respect
of one covered garage space on the premises of the Society is concerned,
the Arbitrator concluded from the documents submitted by Kalpana Mukherjee,
that Pratima Chowdhury had one covered garage space also. The said covered
garage space was not mentioned in the document dated 13.11.1992.
Thereafter, based on an agreement executed between Kalpana Mukherjee on the
one hand and the Society on the other, the said garage space was also
transferred to the name of Kalpana Mukherjee on 25.4.1995. According to
the Arbitrator, the instant agreement dated 25.4.1995, had no validity as
the same was neither mentioned in the letter dated 11.11.1992, nor in the
document dated 13.11.1992. And therefore cannot be considered as having
the approval of Pratima Chowdhury. Accordingly, the Arbitrator expressed
the view that the covered garage space must be deemed to have never been
transferred by Pratima Chowdhury to Kalpana Mukherjee. The Arbitrator also
concluded, that the agreement dated 25.4.1995 could not have been executed
in the absence of Pratima Chowdhury. Based on the above factual position
Pratima Chowdhury had also alleged connivance between Kalpana Mukherjee and
the Society, so as to deprive Pratima Chowdhury of her property.
(vi) Besides the above factual conclusions drawn by the Arbitrator, the
Arbitrator had also concluded that the Society violated various provisions
of the West Bengal Co-operative Societies Act, 1983, and the rules framed
thereunder, as also the bye-laws of the Society. The Arbitrator summarized
the conclusions drawn on the legal issues as under:-
“Keeping in view of the all above, I am of the opinion that the
transfer of the flat no. 5D of the Defendant No. 2 Society was
not done in accordance with laws including West Bengal Co-
Operative Socities Act, Rules, Indian Contract Act, Transfer of
Property Act due to reason at a glance.
1) Section 85(9), Section 70, Section 69 of West Bengal Co-
Operative Socities Act 1983 have been flouted.
2) Rule 127(1), Rule 135(3)(a), Rule 142(1) have been
flouted.
3) Bye-laws have been contradicted.
4) No consideration money was paid by the Defendant no. 1 to
the Plaintiff.
5) Societies accepted the resignation of the Plaintiff on
14.2.93 which she had not tendered, if that be so, the
society did not act as per Rule 143 also.
6) The flat in dispute was under the lease and license
agreement at the material time since bank account in this
respect was operated by the son of the Defendant no. 1 who
also deposited cheque on Plaintiff’s behalf.
7) The instant dispute case is not barred by limitation.
8) The transaction of 13.11.92 does not attract the doctrine
of estoppel.”
21. Based on the abovementioned conclusions drawn by the Arbitrator on
the factual and legal issues canvassed by the rival parties. The
Arbitrator passed the following award:
“AWARD
Keeping in view of the above, based on documents, assessing all
the pros and cons, on the basis of equity, justice and good
conscience, I pass the following ‘AWARD’:
a) The agreement dt. 13.11.92 between the Plaintiff and
Defendant no. 1 is invalid, void and incomplete and
b) The relevant resolution dt. 14.2.93 (Agenda no. 1) of the
Managing Committee of the Defendant no. 2 is quashed and;
c) The Defendant no. 2 is directed to ensure and conform that
the plaintiff gets the possession of flat no. 5D with
garage space with immediate effect and issue share
certificate in her name immediately and
d) Any other action if any taken by any authority on and
after 13.11.92 affecting the membership of the Plaintiff in
any manner whatever is also quashed.
The above Judgment and Award have been given on
Pronouncement before the parties present.”
22. Dissatisfied with the award rendered by the Tribunal on 5.2.1999,
Kalpana Mukherjee preferred an appeal bearing no. 14 of 1999 before the
West Bengal Co-operative Tribunal (hereinafter referred to as the Co-
operative Tribunal). The Society (defendant no. 2, before the Arbitrator)
preferred a separate appeal bearing no. 29 of 1999, to assail the award of
the Arbitrator dated 5.2.1999. While dwelling upon the controversy between
the parties, the Co-operative Tribunal considered it appropriate to
highlight the social relationship and affinity between the parties.
According to the Cooperative Tribunal, the relationship between the parties
had an essential bearing, to an effective determination of the controversy.
Insofar as the instant aspect of the matter is concerned, rather than re-
narrating the position taken into consideration, we consider it more
appropriate to extract hereunder the narration recorded by the Co-operative
Tribunal itself. The same is accordingly reproduced hereunder:-
“For proper appreciate of evidence it is proper to introduce the
parties. P.W. Chowdhury, the respondent no. 1 in both the appeals is
a spinster and now aged 50+. She is a graduate. She studies in
Calcutta and other places. She is an exponent to Bharat Natyam and
performs dance at many places of India. For a pretty long time she
has been residing at Bombay. Smt. Bani Roy is her sister. B. Roy’s
husband Mr. H.P. Roy is a wealthy person in Bombay. P. Chowdhury has
been living in the family of Mr. H.P. Roy since the put up herself in
Bombay. Partha Mukherjee is the son-in-law of H.P. Roy. K. Mukherjee
who is the appellant in appeal no. 14/1999 is the mother of Partha
Mukherjee. K. Mukherjee retired from service in the National Library,
Calcutta in 1994. While in service, she would stay in the Govt.
accommodation at Balvediare Road, Alipur. Partha Mukherjee, Son of K.
Mukherjee is an Engineer from I.I.T., Kharagpur and obtained M.B.A.
from Ahmedabad and at the material time worked as Sales
Manager/Regional Manager of Colgate Palmolive Ltd. in Bombay, Calcutta
and other places. Partha Mukheree married Sova Mukherjee, who was the
daughter of H.P. Roy of Bombay. P. Chowdhury, her sister Bani, H.P.
Roy, Partha and Sova, all lived together for a prolonged period of
time in the house of H.P. Roy at Bombay. Partha married Sova
sometimes in 1987 and little after marriage, he and Sova started
living in the house of H.P. Roy. Evidence has it to say that the
relationship of Pratima with Sova Rinki is, as Pratima herself says,
“like my daughter”. Similarly, the evidence of Pratima runs that
after marriage, her relationship with Partha was “like my son”. In
1992, Partha worked for Palmolive Co. Ltd. in Bombay and while working
there he, as we have earlier observed, would stay in the house of H.P.
Roy. In January, 1992, Pratima was allotted a flat being no. 5B at
48E, Gariahat Road, Calcutta-19 belonging to the society. The said
flat was originally allotted to Smt. Indrani Bhattacharya and the said
Smt. Indrani Bhattacharya having transferred the flat to Smt. P.
Chowdhury, the latter came to be an allottee of that flat, but P.
Chowdhury did not reside there at all. In March/April, 1992, Partha
was transferred from Bombay to Calcutta and needed an accommodation.
Colgate Palmolive Co. Ltd., was required to arrange accommodation for
its officers. As Pratima and Partha became very closer and Pratima
treated Partha like her son, Partha put up himself in the flat of
Pratima in April, 1992 and it was the Colgate Palmolive Co. Ltd.,
which by virtue of an agreement for license with Pratima used to pay
Rs.5000/- per month as rent to Pratima. These are all facts admitted.
We see that the relationship amongst Pratima, Partha and Kalpana grew
very closer because of Partha marrying the daughter of the sister of
Pratima. This background has to be borne in mind while appreciating
the evidence on record.”
Having traced the relationship between the parties, as has been recorded
hereinabove, the Co-operative Tribunal was of the view, that the entire
approach of the Arbitrator was erroneous, as the Arbitrator had treated
Pratima Chowdhury as a pardanashin lady. The above inference, drawn by the
Co-operative Tribunal, is also being extracted hereunder:-
“The entire approach of the Ld. Arbitrator seemed to have gone into
the fashion as if the respondent no. 1 P. Chowdhury was a pardanasin
lady, that she was unaware of the documents she was executing that it
was Partha who managed to get all the documents executed by Pratima so
as to obtain transfer of the flat in the name of his mother Kalpana
Mukherjee. Let it be recorded here at the outset that P. Chowdhury,
having regard to her status, education and wealth cannot be allowed to
take the benefit of what a pardanasin woman is entitled to on two-fold
grounds; firstly, she is highly education (illegible) and a literate
woman and secondly, the pleading of Pratima Chowdhury as we get from
plaint does not make out such a case. ”
Just in the manner in which we have recorded the conclusions drawn by the
Co-operative Arbitrator, highlighting each individual aspect taken into
consideration, we will also endeavour to similarly summarize the
conclusions drawn by the Co-operative Tribunal on different aspects of the
matter.
The above conclusions are being recorded hereunder:-
i) The Co-operative Tribunal was of the view, that the determination
rendered by the Arbitrator was erroneous on account of the fact that
the Arbitrator did not take into consideration a letter of vital
importance to the controversy. In this behalf, the Co-operative
Tribunal examined the letter dated 29.6.1992, which Pratima Chowdhury
had written to the Society, wherein she had indicated that due to her
indifferent health, she was not in a position to visit Calcutta in the
immediate future. She accordingly requested the Society to transfer
her flat to “my nominee Kalpana Mukherjee, a close relative of mine”.
In the above letter Pratima Chowdhury had also stated, that Kalpana
Mukherjee was already occupying the flat, and was staying in it with
her son (Partha Mukheree), and her daughter-in-law (Sova Mukherjee).
She accordingly requested the Society, that for the maintenance of the
flat, charges payable should be recovered from the residents of the
flat. It would be relevant to mention, that Pratima Chowdhury had
accepted having written the above letter (in the rejoinder filed by
her before the Arbitrator). Despite the above Pratima Chowdhury had
explained, that the letter dated 29.6.1992 had been signed by her at
the instance of Partha Mukherjee. According to the Co-operative
Tribunal, the above letter dated 29.6.1992 written by Pratima
Chowdhury on her letterhead from Bombay, demolished the entire case
set up by her. Primarily on the basis of the said letter dated
29.6.1992 the Co-operative Tribunal concluded, that the factual
inferences recorded by the Arbitrator without reference to the above
letter, were not justified. It came to be expressly concluded by the
Co-operative Tribunal, that motives attributed to Partha Mukherjee
were clearly unjustified.
ii) According to the Co-operative Tribunal, after having written the above
letter dated 29.6.1992, Pratima Chowdhury wrote two other letters
dated 11.11.1992 and 13.11.1992. On the basis of the above letters,
flat no. 5D was transferred by the Society, to the name of Kalpana
Mukherjee, consequent upon the approval of the Deputy Registrar, Co-
operative Societies. In the opinion of the Co-operative Tribunal,
Pratima Chowdhury did not assail the action of the Society in
transferring flat no. 5D to Kalpana Mukherjee till February, 1995.
According to the Co-operative Tribunal, the challenge to the transfer
of the above flat in the name of Kalpana Mukherjee, was raised only
after a marital discord had developed between Partha Mukherjee and his
wife Sova Mukherjee. On account of the above discord, Partha Mukhrjee
left the company of the family of his father-in-law (H.P. Roy). It
was only thereupon, that Pratima Chowdhury assailed the transfer of
the flat (from her name, to the name of Kalpana Mukherjee). According
to the Co-operative Tribunal, the Arbitrator overlooked the above
extremely relevant factual position and accordingly erred in drawing
his conclusions.
iii) Insofar as the document dated 13.11.1992 is concerned, the Co-
operative Tribunal having examined it, recorded that the same was
executed by Pratima Chowdhury and Kalpana Mukherjee (both as
executants), which was attested by H.P. Roy (father-in-law of Partha
Mukherjee) and which was also sworn before a notary. The Co-operative
Tribunal also observed, that the aforesaid document had been executed
on a non-judicial stamp paper of Rs.40/-. The above document in its
text recorded, that Pratima Chowdhury had transferred the possession,
right, title and interest of flat no. 5D in favour of Kalpana
Mukherjee (the nominee/transferee). The reason for the aforesaid
transfer was indicated in document dated 29.6.1992. It was mentioned,
that on account of her (Pratima Chowdhury’s) indifferent health and on
account of having decided to permanently settle in Bombay, she had
agreed to transfer the flat no. 5D in favour of Kalpana Mukherjee. It
was also duly recorded in the above document, that possession of flat
no. 5D had already been handed over to Kalpana Mukhrjee. It was also
pointed out, that Kalpana Mukherjee had already applied for membership
of the Society, whereafter, she would be entitled to all rights and
privileges over flat no. 5D in terms of the bye-laws of the Society.
According to the Co-operative Tribunal, Pratima Chowdhury did not deny
execution of document dated 13.11.1992. As per the Co-operative
Tribunal, the submission of Pratima Chowdhury about having signed a
blank paper, on which Partha Mukherjee had executed the document dated
13.11.1992, was not acceptable. The Co-operative Tribunal was of the
view, that Pratima Chowdhury having admitted her signatures on the
document dated 13.11.1992, it was not open to her to deny the
execution thereof. For the same reason, the Co-operative Tribunal
rejected the contention advanced on behalf of Pratima Chowdhury, that
she had never appeared before the notary at Calcutta because she had
never gone to Calcutta during the period when the documents dated
11.11.1992 and 13.11.1992 were executed. The Co-operative Tribunal
felt compelled to record the aforesaid conclusion in the following
words: “Regardless of whether the document called agreement dated
13.11.1992 is legal or not, the fact remains that the document was
executed by the transferor and the transferee, and it could not be
denied that long before the agreement was executed, possession of the
flat was delivered way back in March, 1992.”. Therefore, all the
findings recorded by the Arbitrator in respect of the document dated
13.11.1992 were not accepted for the above reasons.
iv) While dealing with the documents dated 29.6.1992, 11.11.1992 and
13.11.1992, the Co-operative Tribunal expressed disbelief at the
determination of the Arbitrator to the effect, that Pratima Chowdhury
had no intention to transfer her membership and her flat bearing no.
5D to Kalpana Mukherjee. According to the Co-operative Tribunal, the
question whether monetary consideration passed from Kalpana Mukherjee
to Pratima Chowdhury or not, was a different issue, however, the
letters dated 29.6.1992, 11.11.1992 and 13.11.1992 clearly expressed
the intention of Pratima Chowdhury to transfer flat no. 5D in favour
of her nominee Kalpana Mukherjee. The Co-operative Tribunal was also
of the view, that the Arbitrator was unjustified in observing, that
the above letters were drafted by Partha Mukherjee, or that, Partha
Mukheree prevailed over Kalpana Mukherjee to execute the above
letters. According to the Co-operative Tribunal, neither the evidence
available on the records of the case, nor the circumstances of the
case justified any such inference.
v) While dealing with the issue of consideration, which had passed from
Kalpana Mukherjee to Pratima Chowdhury on account of transfer of flat
no. 5D, the Co-operative Tribunal expressed, that the Arbitrator
appeared to have been of the view that since in the letter dated
11.11.1992 it was stated, that no monetary transaction was involved,
there could be no sale, and consequently, when there was no sale,
there could be no transfer. The Co-operative Tribunal expressed the
view, that sale was not the only mode of transfer. Relying on the
letter dated 11.11.1992 the Co-operative Tribunal felt, that it could
not be conclusively held, that Pratima Chowdhury had no intention to
transfer flat no. 5D in the name of Kalpana Mukherjee. In fact,
according to the Co-operative Tribunal, the issue of passing of
consideration and the issue of transfer of the property were two
independent issues. The said issues, according to the Tribunal, had
to be determined as per the totality of the circumstances of the case.
On the instant aspect of the matter the Co-operative Tribunal
expressed the view, that the rival parties were tied up by a
matrimonial relationship, inasmuch as, the niece (Sova Mukherjee) of
Pratima Chowdhury was the cementing factor, of their relationship.
Accordingly, whether or not consideration had passed between the
parties, could not be considered as a decisive factor. In fact, the
Co-operative Tribunal was pleased to further conclude, “Even assuming
for the sake of argument that no monetary transaction was involved,
the factum of transfer is not abrogated thereby”. According to the Co-
operative Tribunal, the provisions of the West Bengal Co-operative
Societies Act, and the Rules framed thereunder, do not mandate, that
transfer could only be made by way of sale. Keeping in view the
closeness of the relationship, which is existed between the parties,
according to the Co-operative Tribunal, the issue of paramount
importance was not the receipt of monetary consideration, the issue of
paramount importance was only “… to accommodate the plaintiff’s niece
Sova and her husband Partha, that was uppermost in the mind of the
plaintiff…” Referring to the facts of the present case, the Co-
operative Tribunal held, that consistent with the case of Pratima
Chowdhury based on an oral agreement, Partha Mukherjee transferred
shares of different companies “… worth Rs.4,29,000/- in favour of the
plaintiff on 6.12.1994 by way of consideration of the apartment…”. It
is necessary to notice the observations made by the Co-operative
Tribunal on the instant aspect of the matter. The same are
accordingly reproduced in the words of the Co-operative Tribunal: “One
may not believe the reality of oral agreement so as to determine the
price and of payment thereto by transfer of shares of different
companies in favour of the respondent no. 1. But if it appears from
the documents which show that in the latter part of the year 1994,
shares worth Rs.4,29,000/- were transferred in favour of P. Chowdhury
and if no convincing evidence is forthcoming as to payment of that
money for different purpose or for different reason then one is to
believe the passing of consideration price, and the passing of
consideration price when proved would virtually prove the alleged oral
agreement to that effect.”
vi) The Co-operative Tribunal also examined the rival contentions of the
parties in respect of the place where the documents in question were
executed. It was pointed out, that the evidence produced by Pratima
Chowdhury to the effect, that she had signed the documents in Bombay,
could not be accepted. Likewise, according to the Co-operative
Tribunal, the witnesses produced by Pratima Chowdhury on the above
issue, were not reliable. According to the Co-operative Tribunal,
when the notary who was an Advocate stated on oath, that the documents
were executed in Calcutta before him, it was not possible to give
credence to the statement of Pratima Chowdhury or the witnesses
produced by her. According to the Co-operative Tribunal, it needed to
be kept in mind even, insofar as the instant aspect of the matter was
concerned, that Pratima Chowdhary had raised a dispute in respect of
the transfer of flat no. 5D only after a marital discord had developed
between Partha Mukherjee and Sova Mukherjee.
vii) According to the Co-operative Tribunal “the question as to why Kalpana
Mukherjee was not made a nominee in January, 1992 when she was put in
possession of the flat, lies in the fact that since 1987, Kalpana
Mukherjee’s son Partha Mukherjee had been residing in Bombay with his
father in law H.P. Roy and Pratima Chowdhury. According to the Co-
operative Tribunal, the Arbitrator recorded a useless reasoning, that
the nomination in favour of Kalpana Mukherjee was not acceptable.
Referring to Sections 79 and 80 of the West Bengal Co-Operative
Societies Act, the Co-operative Tribunal expressed the view, that it
was not compulsory that transfer of nomination could only be in favour
of a member of the family of the person making the nomination.
According to the Co-operative Tribunal, the letters/documents dated
29.6.1992, 11.11.1992 and 13.11.1992 were sufficient proof of the
nomination by Pratima Chowdhury in favour of Kalpana Mukherjee. It
was also pointed out, that the Society had accepted the above
nomination, which was approved by the Deputy Registrar, Co-Operative
Societies. It was accordingly concluded by the Co-operative Tribunal,
that in such a situation, no separate letter giving consent to the
transfer was required.
viii) Another interesting aspect of the matter dealt with by the Co-
operative Tribunal was based on the principle of estoppel. Rather
than expressing the observations and conclusions drawn by the Co-
operative Tribunal in our words, we consider it just and appropriate
to narrate the findings recorded by the Co-operative Tribunal by
extracting its observations. The same are accordingly reproduced
hereunder:-
“Section 115 of the Evidence Act provides that “when one person has by
his declaration act or commission, intentionally causes or permits
another person to believe a thing to be true and to act upon such
belief, neither he nor his representative shall be allowed in the suit
or proceeding between herself and such person or his representative
shall be allowed in the suit or proceeding between herself and such
person or his representation, to deny the truth of that thing”. The
following facts are very much present to invoke the doctrine.
a) Fraud, undue influence (illegible) and misrepresentation
has not been proved;
b) (illegible)
c) (Illegible)
d) Partha was in need of accommodation in Calcutta;
e) Long before transfer Kalpana was already made a nominee in
respect of the flat in question;
f) Unquestionably two letters dated 19.6.1992 and 13.11.1992
are there addressed by Pratima to the society clearly
asking for transfer of the flat in favour of Kalpana;
g) Possession was delivered pursuant to those letters and
agreement dated 13.11.1992;
h) Lease and license agreement with Colgate Palmolive Ltd.,
legally cannot destroy the factum of transfer;
i) Partha and Kalpana are led to believe about the completion
of transfer;
j) Under the law it (illegible) required to be executed and
registered under the T.P. Act and the I.R. Act;
k) Pratima writes to CESC to henceforth collect all charges
from Kalpana;
l) Pratima slept a slumber after the signing of the agreement
dated 13.11.1992 till April, 1993.
These facts are to our mind sufficient to invoke the doctrine of
estoppel. When society acted upon letters of the plaintiff/respondent
no. 1 and transfer was effected, the respondent no. 1 is estopped from
challenging her stand.”
ix) It was argued before the Co-operative Tribunal, that when the lease
and license agreement came to an end, Partha Mukherjee wrote a letter
to Colgate Palmolive India Limited informing it of the termination of
the lease and license agreement by asserting, that “Landlady refunded
back the security deposit of Rs.60,000/-“. Factually, Partha
Mukherjee had deposited the above amount of Rs.60,000/-, in the
Calcutta office of Colgate Palmolive (India) Limited. It was argued
before the Co-operative Tribunal, that the use of the expression
“landlady” by Partha Mukherjee, was indicative of the fact that the
transfer of flat no. 5D had actually not taken place. According to
the Co-operative Tribunal, the aforesaid argument was not acceptable
because in the eyes of Colgate Palmolive (India) Limited, Pratima
Chowdhury was a landlady and accordingly it was not required that
Partha Mukherjee should inform Colgate Palmolive (India) Limited, that
Pratima Chowdhury had transferred flat no. 5D to the name of his
mother Kalpana Mukherjee.
Based on the aforesaid findings recorded by the Co-operative Tribunal, both
the appeals were allowed. The impugned award passed by the Tribunal dated
5.2.1999 in Dispute Case No. 29/RCS of 1995-96 was set aside. Accordingly,
the dispute raised by Pratima Chowdhury was dismissed.
23. Dissatisfied with the common order passed by the Co-operative
Tribunal dated 16.5.2002, vide which Appeal nos. 14 of 1999 and 29 of 1999
were disposed of, the petitioner invoked the civil revisional jurisdiction
of the High Court at Calcutta (hereinafter referred to as, the High Court).
During the course of deliberations before the High Court, Pratima
Chowdhury assailed the findings recorded by the Co-operative Tribunal on
various aspects of the matter. The High Court in its deliberations traced
the sequence of facts in the background of the facts as were examined by
the Arbitrator, as also, the Co-operative Tribunal. No new facts were
taken into consideration. The High Court adjudicated upon the matter vide
an order dated 14.2.2006, whereby Civil Order nos. 3039 and 3040 of 2002
were jointly disposed of. The different perspectives and angles within the
framework of which the High Court examined the controversy, are being
briefly narrated hereunder:-
(i) The High Court excluded various facts taken into consideration by the
Arbitrator. For excluding certain facts from consideration, the view of
the High Court was, that the factual position introduced by Pratima
Chowdhury by filing a rejoinder before the Arbitrator, could not be taken
into consideration. The consideration of the High Court was recorded in
the impugned order dated 14.2.2006, as under:-
“After service of copy of the written statement, the plaintiff before
the learned Arbitrator filed a rejoinder thereby attempting to
introduce certain facts. But the learned Tribunal observed that there
could be no scope for filing of such rejoinder either under the Code
of Civil Procedure or under the West Bengal Co-Operative Societies
Rules.”
In fact, on the instant aspect of the matter the High Court, adopted as
correct the following observations recorded in the order passed by the Co-
operative Tribunal:-
“It has to be clearly stated that under no provision of law the
plaintiff can be allowed to submit a rejoinder to the written
statement of the defendant and the facts introduced in the rejoinder
were illegally taken note of by the Ld. Arbitrator and whatever
evidence she introduced to translate that rejoinder cannot be legally
accepted.”
(ii) The High Court was of the view, that the stance adopted by Pratima
Chowdhury was impermissible under the principle of justice and equity, the
doctrine of fairness, as also, the doctrine of estoppel. This aspect of
the matter came to be examined in the following manner:-
“After due consideration of all relevant facts and materials it
appears that there could be very little scope for the society to
recall its stand just because after about three years, Pratima
Chwodhury decided otherwise. In fact resolution of the dated
14.2.1993 was forwarded to the Deputy Registrar, Co-operative
Societies with recommendation for transfer of flat and shares in
favour of Kalpana Mukherjee as far back as on 10.3.1993. It appears
that the Deputy Registrar, Co-operative Societies, asked for certain
document on 26.7.1993, which were submitted by the society on
22.9.1993. Thereafter, membership of Kalpana Mukherjee in place of
Pratima Chowdhury was approved. Thus, backing out by Pratima
Chowdhury after about three years of her own consistent request for
transfer in favour of Kalpana Mukherjee and her request to C.E.S.C. to
transfer electric meter, cannot have any support in the eyes of law.
Pratima Chowdhury also did not bother to intimate Kalpana Mukherjee
while requesting the society for necessary action in view of her
change of mind. This is against the doctrine of fairness. Lord
Dening in his book, The Discipline of Law, 7th Reprint, page 223,
observed:
“It is a principle of justice and of equality. It comes to
this, when a man by his words or conduct has led another to
believe that he may safely act on the faith of them – and the
other does act on when it would be unjust or inequitable for him
to do so.”
In the words of Dixon, J.:-
“The principle upon which estoppel in pais is founded is that the law
should not permit an unjust departure by a party from an assumption of
fact which he has caused another party to adopt or accept for the
purpose of their legal relations.”
The said principle was further stretched to the following extent:-
“At any rate, it applies to an assumption of ownership or absence of
ownership. This gives rise to what may be called proprietary
estoppel. There are many cases where he is not the owner, or, at any
rate, is not claiming an interest therein, or that there is no
objection to what the other is doing. In such cases, it has been held
repeatedly that the owner is not to be allowed to go back on what he
has led the other to believe. So much so that his own title to the
property, be it land or goods, has been held to limited or
extinguished, and new rights and interest have been created therein.
And this operates by reason of his conduct what he was led the other
to believe even though he never intended it.”
It may be said that even in absence of actual promise, if a
person by his words or conduct, so behaves as to lead another to
believe that he will not insist on his strict legal rights, knowing or
intending that the other will act on that belief and he does so act,
that again will raise an equity in favour of the other, and it is for
a court to equity to say in what way the equity may be satisfied. An
equity does not necessarily depend on agreement but on words or
conduct. The Privy Council in V. Wellington Corporation observed that
the Court must look at the circumstances in each case to decide in
what way the equity can be satisfied.”
(iii) The High Court expressly approved the manner in which the controversy
had been examined by the Co-operative Tribunal, by taking into
consideration the past relationship between the parties, and the souring of
the relationship between the two spouses, i.e., Partha Mukherjee and Sova
Mukherjee. Having examined the dispute in the aforesaid prospective, the
High Court observed as under:-
“On behalf of the petitioner it was also submitted that the learned
Tribunal failed to appreciate the findings of the learned Arbitrator
arrived at after proper appreciation of the evidence in the said
proceeding. The learned Tribunal seem to be in agreement with the
view that the document dated 13.11.1992 cannot be called as a proper
and complete document of transfer. The learned Tribunal, thereafter
explored as to whether such a document is at all necessary for
effecting transfer of an apartment by a member to another person.
Relying upon the letters dated 29.6.1992 and 11.11.1992 and quite
rightly, without attempting to read more than what meets the eyes, the
learned Tribunal held that Pratima Chowdhury by such letters,
expressed her desire to transfer the flat in favour of her nominee
Kalpana Mukherjee. This was quite relevant in the context of
relationship between two families arising out of the marital tie. It
cannot be said that the learned Tribunal was not at all justified in
observing that in the backdrop of the present case, payment of
consideration could not be the decisive factor.”
(iv) On the subject of passing of consideration, the High Court
principally accepted the view propounded by the Co-operative Tribunal. The
High Court made the following observations on the issue of consideration:-
“The learned Tribunal appears to have considered the aspect relating
to transfer of flat in proper perspective. Nothing could be placed
before this Court so as to justify brushing aside of the observation
of the learned Tribunal that “neither the Act nor the rule rules out
transfer by gift or will. But the Rule does not provide the manner of
transfer, nor does it mandate that transfer has to be effected by any
of the modes necessary as provided for in the Transfer of Property
Act. The transferee has to be an allottee or a re-allottee.”
On perusal of the impugned judgment, it is found that the
learned Tribunal referring to Rule 201(3) of the West Bengal Co-
operative Societies Rule, 1974 and relevant Rule of 1987 observed that
the question of payment of consideration money is primarily and purely
a matter between the transferor and the transferee. It was held that
“deletion of the Rule 201 (3) from the present Rule of 1987 clearly
fortifies the position of the society which effected transfer on the
repeated request of the respondent no. 1 in full compliance with the
provisions of the Act and the Rules. This being so, for a transferee
to hold possession is required the certificate of allotment, not a
deed of conveyance from the transferor”.”
Significantly enough the learned Tribunal mentioned about the
manner in which Pratima Chowdhury got the flat from the original
member, Smt. Indrani Bhattacharya and wondered as to how then there
could be any grievance in regard to the transfer by the said Pratima
Chowdhury in favour of Kalpalan Mukherjee. The story of giving money
to Partha Mukherjee by way of loan could not be established to the
satisfaction of the judicial conscience of the learned Tribunal and
for reasons as mentioned in the impugned judgment, the learned
Tribunal did not choose to brush aside the assertions made on behalf
of Kalpana Mukherjee that shares amounting to Rs.4,29,000/- were
transferred in favour of Pratima Chowdhury. Controversy relating to
alleged non-payment of consideration money, in the facts and
circumstances of the present case, were not seen to have nay legs, to
stand upon.”
Having recorded the aforesaid findings, the High Court in its conclusion
recorded the following observations:-
“But, as observed earlier, the judgment and order under challenge does
not seem to be suffering from any such infirmity or jurisdictional
error, which calls for or justifies any interference by this Court.”
Based on the analysis of the controversy in the manner summarized
hereinabove, the High Court dismissed the challenge raised by Pratima
Chowdhury by a common order dated 14.2.2006. The common order passed by
the Co-operative Tribunal dated 16.5.2002, and the common order passed by
the High Court dated 14.2.2006 were assailed by Pratima Chowdhury by filing
Special Leave to Appeal (Civil) no. 15252 of 2006.
24. Leave granted.
25. The factual narration recorded by us, the circumstances taken into
consideration by the Arbitrator, and the Co-operative Tribunal, as also,
the analysis of the High Court have all been detailed hereinabove. Suffice
it to state, that there were no further facts besides those already
referred to hereinabove, which were brought to our notice during the course
of hearing. It is also not necessary for us to record the submissions
advanced at the hands of the learned counsel for the rival parties. All
that needs to be mentioned is, that the same submissions as were put
forward by the respective parties hitherto before, came to be addressed
before this Court as well. We shall, therefore, venture to examine the
veracity of the propositions advanced on behalf of the rival parties by
compartmentalizing the submissions advanced before us under different
principles of law. We would thereupon record our final conclusions.
26. First and foremost, it surprises us that Co-operative Tribunal, as
also, the High Court excluded from consideration, the factual position
expressed in the rejoinder filed by the appellant (before the Arbitrator).
In excluding the aforesaid factual position, the Co-operative Tribunal and
the High Court did not rely on any provision of law nor was any reliance
placed on any principle accepted and recognized in legal jurisprudence. It
is not a matter of dispute, that after Kalpana Mukherjee and the Society
were permitted to file written replies before the Arbitrator, the rejoinder
filed thereto on behalf of Pratima Chowdhury, was permitted to be taken on
record. It is not in contention, that in the written replies filed before
the Arbitrator, Kalpana Mukherjee had adopted inter alia the stance, that
consideration was paid to Pratima Chowdhury in lieu of the transfer of flat
no. 5D to her name, even though the documents relied upon by the rival
parties, expressed otherwise. A number of documents not mentioned in the
Dispute Case filed by Pratima Chowdhury were also relied upon by Kalpana
Mukherjee. Pleadings between the parties could be considered as complete,
only after Pratima Chowdhury was permitted to file a rejoinder (in case she
desired to do so). She actually filed a rejoinder which was taken on
record by the Arbitrator. Both parties were permitted to lead evidence,
not only on the factual position emerging from the complaint filed by
Pratima Chowdhury and the written replies filed in response thereto (by
Kalpana Mukherjee, and the Society), but also, the factual position
highlighted by Pratima Chowdhury in her rejoinder affidavit. It is,
therefore, not on the basis of the pleadings of the parties, but also on
the basis of the evidence led in support of the aforesaid pleadings, that
the Arbitrator had recorded his findings in his award dated 5.2.1999. We
are therefore of the view, that the Arbitrator had acted in accordance with
law, and therefore the exclusion from consideration, of the factual
position asserted by Pratima Chowdhury in her rejoinder, by the Co-
operative Tribunal and the High Court was wholly unjustified. The factual
narration by Pratima Chowdhury, could not be excluded from consideration,
while adjudicating upon the rival claims between Pratima Chowdhury and
Kalpana Mukherjee. The instant aspect of the decision of the High Court,
is therefore liable to be set aside, and is accordingly set aside. Just
the instant determination, would result in a whole lot of facts which were
not taken into consideration by the adjudicating authorities, becoming
relevant. Despite that, we feel, that remanding the matter for a denovo
consideration, would place a further burden on the parties. Having heard
learned counsel at great length, we shall settle the issues finally, here
and now.
27. The Co-operative Tribunal in its order dated 16.5.2002 had invoked
the principle of estoppel, postulated in Section 115 of the Indian Evidence
Act. The High Court affirmed the conclusions drawn by the Co-operative
Tribunal. In addition to the above principle, the High Court invoked the
principles of equity and fairness. Insofar as the latter principles are
concerned, we shall delve upon them after examining the contentions of the
rival parties, as equity and fairness would depend upon the entirety and
totality of the facts. The above aspect can therefore only be determined
after dealing with the intricacies of the factual circumstances involved.
We shall, however, endeavour to deal with the principle of estoppel, so as
to figure whether, the rule contained in Section 115 of the Indian Evidence
Act could have been invoked, in the facts and circumstances of the present
case. Section 115 of the Indian Evidence Act is being extracted
hereinabove:-
“115. Estoppel.- When one person has, by his declaration, act or
omission, intentionally caused or permitted another person to
believe a thing to be true and to act upon such belief, neither
he nor his representative shall be allowed, in any suit or
proceeding between himself and such person or his
representative, to deny the truth of that thing.
Illustration
A intentionally and falsely leads B to believe that certain land
belongs to A, and thereby induces B to buy and pay for it. The
land afterwards becomes the property of A, and A seeks to set
aside the sale on the ground that, at the time of the sale, he
had no title. He must not be allowed to prove his want of
title.”
It needs to be understood, that the rule of estoppel is a doctrine based on
fairness. It postulates, the exclusion of, the truth of the matter. All,
for the sake of fairness. A perusal of the above provision reveals four
salient pre conditions before invoking the rule of estoppel. Firstly, one
party should make a factual representation to the other party. Secondly,
the other party should accept and rely upon the aforesaid factual
representation. Thirdly, having relied on the aforesaid factual
representation, the second party should alter his position. Fourthly, the
instant altering of position, should be such, that it would be iniquitous
to require him to revert back to the original position. Therefore, the
doctrine of estoppel would apply only when, based on a representation by
the first party, the second party alters his position, in such manner, that
it would be unfair to restore the initial position. In our considered
view, none of the ingredients of principle of estoppel contained in Section
115 of the Indian Evidence Act, can be stated to have been satisfied, in
the facts and circumstances of this case. Herein, the first party has made
no representation. The second party has therefore not accepted any
representation made to her. Furthermore, the second party has not acted in
any manner, nor has the second party altered its position. Therefore, the
question whether the restoration of the original position would be
iniquitous or unfair does not arise at all. Even if consideration had
passed from Kalpana Mukherjee to Pratima Chowdhury, on the basis of the
representation made by Pratima Chowdhury, we could have accepted that
Kalpana Mukherjee had altered her position. In the facts as they have been
presented by the rival parties, especially in the background of the order
passed by the Arbitrator, that no consideration had passed in lieu of the
transfer of the flat, and especially in the background of the factual
finding recorded by the Co-operative Tribunal and the High Court, that
passing of consideration in the present controversy was inconsequential, we
have no hesitation whatsoever in concluding, that the principle of estoppel
relied upon by the Co-operative Tribunal and the High Court, could not have
been invoked, to the detriment of Pratima Chowdhury, in the facts and
circumstances of the present case. Insofar as the instant aspect of the
matter is concerned, the legal position declared by this Court fully
supports the conclusion drawn by us hereinabove. In this behalf, reference
may be made, firstly, to the judgment rendered by this Court in Kasinka
Trading vs. Union of India, (1995) 1 SCC 274, wherein this Court noticed as
under:-
“11. The doctrine of promissory estoppel or equitable estoppel is
well established in the administrative law of the country. To
put it simply, the doctrine represents a principle evolved by
equity to avoid injustice. The basis of the doctrine is that
where any party has by his word or conduct made to the other
party an unequivocal promise or representation by word or
conduct, which is intended to create legal relations or effect a
legal relationship to arise in the future, knowing as well as
intending that the representation, assurance or the promise
would be acted upon by the other party to whom it has been made
and has in fact been so acted upon by the other party, the
promise, assurance or representation should be binding on the
party making it and that party should not be permitted to go
back upon it, if it would be inequitable to allow him to do so,
having regard to the dealings, which have taken place or are
intended to take place between the parties.”
(emphasis is ours)
The above sentiment recorded in respect of the principle of estoppel was
noticed again by this Court in Monnet Ispat & Energy Ltd. vs. Union of
India & Ors., (2012) 11 SCC 1, wherein this Court expressed its views in
respect of the principle of estoppel as under:-
“289. As we have seen earlier, for invoking the principle of
promissory estoppel there has to be a promise, and on that basis
the party concerned must have acted to its prejudice.”
(emphasis is ours)
The ingredients of the doctrine of estoppel in the manner expressed above
were also projected in H.S. Basavaraj (D) by his LRs. & Anr. Vs. Canara
Bank & Ors., (2010) 12 SCC 458, as under:-
“30. In general words, estoppel is a principle applicable when one
person induces another or intentionally causes the other person
to believe something to be true and to act upon such belief as
to change his/her position. In such a case, the former shall be
estopped from going back on the word given. The principle of
estoppel is, however, only applicable in cases where the other
party has changed his position relying upon the representation
thereby made.”
(emphasis is ours)
As already noticed hereinabove, none of the ingredients of estoppel can be
culled out from the facts and circumstances of the present case. In view
of above, we hereby set aside the determination by the Co-operative
Tribunal, as also the High Court, in having relied on the principle of
estoppel, and thereby, excluding the pleas/defences raised by Pratima
Chowdhury to support her claim.
28. The admitted factual position in the present controversy, in our
considered view, is absolutely clear and unambiguous. Had the different
adjudicating authorities taken into consideration the undisputed factual
position, there ought not to have been much difficulty in resolving the
difficulty. We shall highlight a few relevant admitted facts which crossed
our mind while hearing the matter and whilst recording the order:-
(i) The reason for transferring flat no. 5D indicated in the letters
dated 11.11.1992 and 13.11.1992 was on account of the close relationship
between Pratima Chowdhury and Kalpana Mukherjee, which was expressed by
observing “…my nominee Kalpana, a close relative of mine…”. As a matter of
fact, there was no close relationship between Pratima Chowdhury and Kalpana
Mukherjee. Pratima Chowdhury, is indicated to have been living in Bombay
and never visiting Calcutta. Kalpana Mukherjee is a resident of Calcutta,
who was in employment at Calcutta, and had started to reside with her son
Partha Mukherjee, after he moved to Calcutta alongwith his wife Sova
Mukherjee. There was no direct relationship between Pratima Chowdhury and
Kalpana Mukherjee. Pratima Chowdhury’s niece Sova Mukhrjee was married to
Partha Mukherjee, son of Kalpana Mukherjee. The only relationship that can
be assumed, is of aunty and niece, between Pratima Chodhury and Sova
Mukherjee. If on account of love and affection, for her niece, Pratima
Chowdhury desired to transfer flat no. 5D which she had purchased for a
consideration of Rs.4 lakhs, she would have done so by transferring it to
the name of her niece Sova Mukherjee. Affinity to Sova Mukherjee, and the
love, affection and welfare of Sova Mukherjee, would not extend to a
gesture of the nature under reference, i.e., by way of transfer of
immovable property, of substantial value, without consideration, to the
mother in law of Sova Mukherjee. Therefore, factually the expression of
close relationship between Pratima Chwodhury and Kalpana Mukherjee depicted
in letters dated 11.11.1992 and 13.11.1992 are on the face of it, false and
incorrect. It is, therefore, improper for the adjudicating authorities to
have accepted the factum of close relationship of the parties, in so far
as, the transfer of flat no. 5D, is concerned.
(ii) There is hardly any justification for having accepted another
important factual position depicted in the letters dated 11.11.1992 and
13.11.1992. In this behalf, our reference is to the fact that flat no. 5D
was sought to be transferred by Pratima Chowdhury to Kalpana Mukherjee,
without consideration. First and foremost, the aforesaid factual position
is not acceptable on account of the statement of Kalpana Mukherjee herself.
In the written reply filed before the Arbitrator, Kalpana Mukherjee took
the express stance, that Pratima Chwodhury had transferred flat no. 5D to
her name, by accepting a consideration of Rs.4,29,000/-. She further
asserted, that the aforesaid consideration had passed from Kalpana
Mukherjee to Pratima Chowdhury through Partha Mukherjee. According to
Kalpana Mukherjee, Partha Mukherjee transferred shares in his name valued
at Rs.4,29,000/-, to the name of Pratima Chowdhury. Per se therefore, even
Kalpana Mukherjee denied the factual position indicated in the above
letters, whereby flat no. 5D was transferred from the name of Pratima
Chowdhury, to that of Kalpana Mukherjee.
(iii) The letters dated 11.11.1992 and 13.11.1992 expressly recorded, that
the factual position narrated in the above letters was on account of
“compliance with the rules regulating such transfer, and also, for avoiding
future complications”. In view of the factual position noticed in the
foregoing paragraphs, it is apparent, that false facts were being recorded
for compliance with the rules and regulations, as also, for avoiding future
complications. One would have appreciated the recording of consideration
in lieu of the transfer of property from the name of Pratima Chowdhury to
that of Kalpana Mukherjee, to avoid future complications, rather than
withholding the same. It is clearly not understandable, what kind of
complications were being avoided. Expressing the above factual position in
the letters under reference, makes the whole transaction suspicious,
mistrustful and possibly fraudulent too. In the absence of any
relationship, the party benefiting from the letters dated 11.11.1992 and
13.11.1992, would have successfully avoided all complications merely by
incorporating consideration, which was to pass from Kalpana Mukherjee to
the transferee Pratima Chowdhury. If consideration was to pass, and had
actually passed, it is difficult to understand why the parties would say,
that the transaction did not involve passing of consideration. It is
therefore clear, that all the ingredients of letter dated 11.11.1992 and
13.11.1992 are shrouded in suspicious circumstances. One is prompted to
record herein, that it was not legitimately open to the parties to record
in the letters under reference, that flat no. 5D was being gifted by
Pratima Chowdhury to Kalpana Mukherjee, on account of lack of proximity
between the parties. The transfer of the said property by one to the
other, by way of gift, would obviously have been subject to judicial
interference, as the same would at least prima facie, give the impression
of dubiety. It was therefore, that Kalpana Mukherjee hastened to adopt a
different factual position in her written reply before the Arbitrator.
(iv) It is relevant to mention, that in the written statement filed by
Kalpana Mukherjee (before the Arbitrator) the stand adopted by her was,
that a consideration of Rs.4,29,000/- had passed from her to Pratima
Chowdhury, by way of transfer of shares (standing in the name of her son,
Partha Mukherjee) to the name of Pratima Chowdhury. In this behalf it
would be relevant to notice, that the documents of transfer executed
between Pratima Chowdhury and Kalpana Mukherjee were dated 11.11.1992 and
13.11.1992. Based thereon, the Board of Directors of the Society, in its
meeting held on 14.2.1993, resolved to accept the resignation of Pratima
Chowdhury. It was further resolved, to accept the membership of Kalpana
Mukherjee in her place. On the date of execution of the documents under
reference, as also on the date of passing of the resolution by the Board of
Directors of the Society, Partha Mukherjee did not have any shares in his
name. The shares which Partha Mukherjee acquired, and which Kalpana
Mukherjee claims to have been transferred in lieu of consideration (to the
name of Pratima Chowdhury), were shown to have been acquired on or after
8.9.1993. The dates of acquisition of the said shares, as were recorded in
the order passed by the Arbitrator, which position has not been disputed
before us, are as follows:-
“COMPANY’S NAME NO. OF SHARES ACQUIRED
Tata Chemicals Ltd. 50 nos. 8.9.93
Tata Chemicals Ltd. 450 nos. 27.10.93
Siemens 50 nos. 2.8.93
Indian Aluminium 500 nos. 4.3.94
I.T.C. Hotels 100 nos. acquired with
Mr.
H.P. Roy
4.4.94”
It is therefore apparent, that Partha Mukherjee did not even have the
shares referred to by the transferee Kalpana Mukherjee, in his name, when
the transfer documents were executed on 11.11.1992 and 13.11.1992, or even
on 14.2.1993 when the Board of Directors of the Society, passed the
transfer resolution. The above shares are shown to have been transferred
to the name of Pratima Chowdhury on 16.12.1994. Well before 16.12.1994,
even according to the stance adopted by Kalpana Mukherjee, Pratima
Chowdhury had executed all the transfer documents. It is therefore
difficult to accept, that the parties had agreed to pass on consideration
by transfer of shares, which were not even owned by Kalpana Mukherjee
(through Partha Mukherjee) on the date of transfer of flat no. 5D from
Pratima Chowdhury to Kalpana Mukherjee. In sum and substance therefore, on
undisputed facts, the stance adopted by Kalpana Mukherjee in the written
statement filed by her before the Arbitrator, is shown to be false. This
aspect of the matter would bring out a legitimate query, namely, why should
Kalpana Mukherjee have adopted a false stance, contrary to the expressed
position in the letters dated 11.11.1992 and 13.11.1992. This further
exposes, the suspicious nature of the transfer transaction.
(v) On the subject of transfer of shares from the name of Partha
Mukherjee to the name of Pratima Chowdhury, which, according to Kalpana
Mukherjee constituted passing of consideration to Pratima Chowdhury (in
lieu of the transfer of flat no. 5D). Pratima Chowdhury had adopted the
stance, that the transfer of the above shares was on account of return of
loans extended by Pratima Chowdhury to Partha Mukherjee. Insofar as the
instant aspect of the matter is concerned Pratima Chowdhury had asserted,
that after the transfer of Partha Mukherjee from Calcutta to Bombay in the
year 1993, he gave up his employment with Colgate Palmolive (India)
Limited, and started a business of aluminium products with one R.K. Sen, at
Bombay. To help Partha Mukherjee with his above business venture, Pratima
Chowdhury had (on the asking of Partha Mukherjee) paid a sum of Rs. 2 lakhs
by way of cheque, to Bharat Aluminium Company Limited, for supply of raw
materials to Partha Mukherjee’s business venture. It was also pointed out,
that Partha Mukherjee had also taken a loan for a sum of Rs. 1,50,000/- for
the same purpose from Bani Roy (sister of Pratima Chowdhury). It was also
asserted, that Sova Mukherjee had similarly extended loans, by making
payments through cheque to Partha Mukherjee. The Arbitrator had accepted
the above assertion of Pratima Chowdhury. For the above determination, the
Arbitrator had placed reliance, on documentary and oral evidence, produced
by Pratima Chowdhury. The instant factual aspect of the matter was totally
overlooked by the Co-operative Tribunal, as well as, by the High Court.
Keeping in view the factual position depicting in paragraph (iv) above, we
have no doubt in our mind, that there was substance in the determination of
the Arbitrator, specially on account of the fact that transfer of shares
from the name of Partha Mukherjee to the name of Pratima Chowdhury came to
be effected, well after the transfer of flat no. 5D to the name of Kalpana
Mukherjee. For the above reason as well, the findings of fact recorded by
the Co-operative Tribunal as well as by the High Court, are bound to be
considered as having been recorded without taking into consideration all
the material and relevant facts.
(vi) The fact that Pratima Chowdhury had addressed a letter to the
Secretary of the Society, dated 28.2.1995, for withdrawal of her earlier
letter dated 11.11.1992, is not in dispute. It is also not a matter of
dispute, that at the time when Pratima Chowdhury addressed the above
letter, neither the transfer of membership, nor the transfer of the flat,
had assumed finality. The transfer of membership, as also the transfer of
the flat, would assume finality only upon the approval of the same by the
Deputy Registrar, Co-operative Societies. The factual position emerging
from the record of the case reveals, that the Society sought the approval
of the Deputy Registrar, Co-operative Societies for the transfer of
membership, as also, flat no. 5D to the name of Kalpana Mukherjee on
13.3.1995. Undoubtedly, Pratima Chowdhury had sought revocation, before
the transfers under reference had assumed finality. It is in the above
background, that one needs to evaluate the reply of the Society dated
10.4.1995. Through the letter dated 10.4.1995, Pratima Chowdhury was
informed, that the Society had no authority to look into the matter, after
the resolution of the Board of Directors dated 2.4.1995. We find the above
explanation, untenable. It was imperative for the Society to have examined
the withdrawal letter dated 28.2.1995, the matter certainly had not been
concluded. Well after the withdrawal letter, the Society by its notice
dated 16.4.1995 had intimated its members, about the resolution dated
2.4.1995. The matter was, therefore, pending authoritative conclusion.
Thus viewed, it was not justified for the Society to deny consideration of
the withdrawal letter dated 28.2.1995. Acceptance or rejection on merits
is another matter, but non-consideration is not understandable. The
instant non-consideration clearly invalidates the resolution passed by the
Society.
(vii) On 22.3.1995, Pratima Chowdhury addressed a letter to the Deputy
Registrar, Co-operative Societies, imploring him to take appropriate
action, by considering the withdrawal letter dated 28.2.1995. We are
surprised, that the Deputy Registrar, Co-operative Societies adopted the
same stance, as was adopted by the Society. When the letter dated
22.3.1995 was addressed to the Deputy Registrar, Co-operative Societies, it
had not yet granted approval to the recommendations made by the Society.
The receipt of the letter dated 28.2.1995, by the Society (as also the
receipt of the letter dated 22.3.1995, by the Deputy Registrar, Co-
operative Societies) is not in dispute. It is imperative for us therefore
to conclude, that the decision taken by the Deputy Registrar, Co-operative
Societies was, without reference to the withdrawal letter dated 28.2.1995
(which was enclosed with the letter dated 22.3.1995 addressed to the Deputy
Registrar, Co-operative Societies). The determination by the Deputy
Registrar, Cooperative Societies, cannot therefore be treated as a valid
and legitimate consideration. Acceptance or rejection on merits is another
matter, but non-consideration is just not understandable. The instant non-
consideration clearly invalidates the approval granted by the Deputy
Registrar, Co-operative Societies.
(viii) The veracity of the execution of the documents dated 11.11.1992
and 13.11.1992 by Pratima Chowdhury, was also examined by the Arbitrator.
In the above examination, the Arbitrator arrived at the conclusion, that
Pratima Chowdhury was in Bombay and not in Calcutta when the above
documents were executed. The above finding was recorded on the basis of
three witnesses produced on behalf of the complainant (before the
Arbitrator). While rejecting the conclusion drawn by the Arbitrator, the
Co-operative Tribunal overlooked the statements of the witnesses produced
by Pratima Chowdhury, merely because the notary was an Advocate. The Co-
operative Tribunal reasoned, that the statement of S.N. Chatterjee, an
Advocate, had to be given more weightage, than the witnesses produced by
Pratima Chowdhury. The above determination at the hands of the Co-
operative Tribunal, besides being perverse, is also totally unacceptable in
law. In the facts and circumstances of the present case, the statement of
the notary should have been rejected and discarded, simply because the
notary in his deposition had acknowledged, that he did not issue any
notarial certificate in terms of Section 8 of the Notary Act. In the
absence of issuance of any such certificate, notarization of the document
dated 13.11.1992 was clearly subject to suspicion. The conclusion drawn by
the Co-operative Tribunal as also the High Court, to the effect that the
document dated 13.11.1992 was executed at Calcutta, is therefore, based on
no evidence whatsoever. The fact that the document dated 13.11.1992 had
not been executed in Calcutta, was also sought to be substantiated by
showing, that the registration number of the Society was not depicted in
the said letter, even though the said letter was shown to have been
executed at the residence of the Secretary of the Society. It was reasoned,
that the Secretary of the Society would have supplied the aforesaid number,
if the above document had been executed at his residence. Having rejected
the credibility of the statement of S.N. Chatterjee (the notary), and
having not accepted the fact that the above document was executed at the
residence of Anil Kumar Sil, the Secretary of the Society, we find no
reason for not accepting the statements of the three witnesses produced by
Pratima Chowdhury, to show that she (Pratima Chowdhury) was at Bombay on
11.11.1992, as well as, on 13.11.1992. Herein again, the Cooperative
Tribunal and the High Court, erred on the face of the record, by not taking
into consideration material facts, available on the file of the case.
(ix) In the background of the factual position emerging from the
deliberations recorded hereinabove, it is also necessary to notice, that
the Arbitrator had placed heavy reliance on the fact, that Kalpana
Mukherjee had deposited rent on 21.10.1993 (payable to Pratima Chowdhury),
into the account of Pratima Chowdhury, by herself, filling up the bank
deposit voucher. Accordingly, the Arbitrator inferred, that the property
in question, even to the knowledge of Kalpana Mukherjee, had not actually
been transferred to her name by Pratima Chowdhury (at least upto
21.10.1993). That was the reason, why Kalpana Mukherjee had continued to
deposit rent for flat no. 5D, into the account of Pratima Chowdhury upto
21.10.1993. Coupled with the aforesaid factual aspect, the Arbitrator
placed great reliance on the letter dated 28.10.1993 addressed by Partha
Mukherjee to Colgate Palmolive (India) Limited, wherein, he described
Pratima Chowdhury as the “landlady”. Undoubtedly, if the documents relied
upon by Kalpana Mukherjee were genuine, Partha Mukherjee would not have
acknowledged the ownership of Pratima Chowdhury over flat no. 5D (on
28.10.1993). These aspects of the matter were totally overlooked by the Co-
operative Tribunal, as well as, by the High Court. These were vital facts,
and needed to be examined, if the order passed by the Arbitrator was to be
interfered with. In the absence of such consideration, the findings of
fact recorded by the Co-operative Tribunal and by the High Court, are bound
to be considered as perverse. Since the factual position attributed to the
actions of 21.10.1993 and 28.10.1993, which emanated and emerged from
Kalpana Mukherjee and Partha Mukherjee respectively, we are of the view
that entire sequence of transfer, is rendered doubtful and suspicious.
(x) The determination of the Arbitrator, on the subject of the transfer
of the covered garage, to the name of Kalpana Mukherjee was also overlooked
by the Co-operative Tribunal, as well as, by the High Court. From the
facts already narrated above, it is clear that Pratima Chowdhury, had one
covered garage space also. Whilst reference was made about the details of
the flat sought to be transferred, in the transfer documents, no reference
was made to the covered garage space. Based on the letter dated
11.11.1992, and the document dated 13.11.1992, flat no. 5D was transferred
to the name of Kalpana Mukherjee. The instant transfer however did not
include the covered garage space. Thereafter, based on an agreement
executed between Kalpana Mukherjee (on the one hand), and the Society (on
the other), the said covered garage space was transferred to the name of
Kalpana Mukherjee, on 25.4.1995. The said transfer was not at the behest
of, or with the concurrence of Pratima Chowdhury. Therefore, according to
the view expressed by the Arbitrator, the covered garage space, must be
deemed to have never been transferred to Kalpana Mukherje by its erstwhile
owner. The Arbitrator also expressed the view, that the agreement dated
25.4.1995 could not have been executed without the participation of Pratima
Chowdhury. The above factual position has not been disputed at the hands
of Kalpana Mukherjee, before this Court. The above reasoning, in our
considered view, was fully justified. The instant aspect of the matter was
also totally overlooked by the Co-operative Tribunal, as well as, by the
High Court. For the above reason also, the findings of the fact, recorded
by the Co-operative Tribunal and by the High Court, are bound to be treated
as perverse.
29. For all the reasons recorded by us in foregoing sub-paragraphs, we
are of the view that the Co-operative Tribunal as well as the High Court,
seriously erred in recording their conclusions. We are satisfied in
further recording, that the Arbitrator was wholly justified in allowing the
Dispute Case filed by Pratima Chowdhury, by correctly appreciating the
factual and legal position.
30. The Co-operative Tribunal as well as the High Court, had invoked the
principle of justice and equity, and the doctrine of fairness, while
recording their eventual findings in favour of Kalpana Mukherjee. It is,
therefore, necessary for us, to delve upon the above aspect of the matter.
Before we venture to examine the instant controversy in the above
perspective, it is necessary to record a few facts. It is not a matter of
dispute, that for a long time Pratima Chowdhury had been residing at
Bombay. She was residing at Bombay in the house of H.P. Roy and Bani Roy.
Bani Roy, as stated above, is the sister of Pratima Chowdhury. H.P. Roy is
a wealthy person. Partha Mukherjee son of Kalpana Mukherje, is an
engineering graduate from IIT, Kharagpur. He also possesses the
qualification of MBA, which he acquired from Ahmedabad. Originally Partha
Mukherjee was employed as Sales Manager/Regional Manager with Colgate
Palmolive (India) Limited, at Bombay. Partha Mukherjee married Sova
Mukherjee (the daughter of H.P. Roy), whilst he was posted at Bombay in
1987. Soon after his marriage, Partha Mukherjee and Sova Mukherjee also
started to live in the house of H.P. Roy (father-in-law of Partha
Mukherjee). The evidence available on the record of the case reveals, that
Pratima Chowdhury treated Sova Mukherjee as her daughter, and Partha
Mukherjee as her son. In 1992, Partha Mukherjee was transferred from
Bombay to Calcutta. Immediately on his transfer, Pratima Chowdhury
accommodated him in flat no. 5D. Subsequently, Colgate Palmolive (India)
Limited entered into a lease and licence agreement, in respect of flat no.
5D with Pratima Chowdhury, so as to provide residential accommodation to
Partha Mukherjee (as per the terms and conditions of his employment).
Obviously, Partha Mukherjee was instrumental in the execution of the above
lease and licence agreement. In order to deposit monthly rent payable to
Pratima Chowdhury (by Colgate Palmolive (India) Limited), Partha Mukherjee
opened a bank account in the name of Pratima Chowdhury, jointly with
himself. He exclusively operated the above account, for deposits as well
as for withdrawals. Not only that, the findings recorded by the Arbitrator
indicate that the letter dated 11.11.1992 written by Pratima Chowdhury was
drafted by Partha Mukherjee. The aforesaid conclusion was drawn from the
fact that the manuscript of the original was in the handwriting of Partha
Mukherjee. All the above facts demonstrate, a relationship of absolute
trust and faith between Pratima Chowdhury and Partha Mukherjee. The
aforesaid relationship emerged, not only on account of the fact that Partha
Mukherjee was married to Sova Mukherjee (the niece of Pratima Chowdhury),
but also on account of the fact, that Partha Mukherjee and his wife Sova
Mukherjee soon after their marriage lived in the house of H.P. Roy (husband
of the sister of Pratima Chowdhury). They resided together with Pratima
Chowdhury till 1992, i.e., for a period of more than a decade, before
Partha Mukherjee was transferred to Calcutta. In our considered view the
relationship between Partha Mukherjee and Pratima Chowdhury would
constitute a fiduciary relationship. Even though all the above aspects of
the relationship between the parties were taken into consideration, none of
the adjudicating authorities dealt with the controversy, by taking into
account the fiduciary relationship between the parties. When parties are
in fiduciary relationship, the manner of examining the validity of a
transaction, specifically when there is no reciprocal consideration, has to
be based on parameters which are different from the ones applicable to an
ordinary case. Reference in this behalf, may be made to the decision
rendered by this Court in Subhas Chandra Das Mushib vs. Ganga Prosad Das
Mushib, AIR 1967 SC 878, wherein this Court examined the twin concepts of
“fiduciary relationship” and “undue influence” and observed as under:
“We may now proceed to consider what are the essential in- gredients
of undue influence and how a plaintiff who seeks relief on this ground
should proceed to prove his case and when the defendant is called upon
to show that the contract or gift was not induced by undue influence.
The instant case is one of gift but it is well settled that the law as
to undue influence is the same in the case of a gift inter- vivos as
in the case of a contract.
Under s. 16 (1) of the Indian Contract Act 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. This shows that the court trying a case of
undue influence must consider two things to start with, namely, (1)
are the relations between the donor and the donee such that the donee
is in a position to dominate the will of the donor and (2) has the
donee used that position to obtain an unfair advantage over the
donor'?
Sub-section (2) of the section is illustrative as to when a person is
to considered to be in a position to dominate the will of another.
These are inter alia (a) where the donee holds a real or apparent
authority over the donor or where he stands in a fiduciary relation to
the donor or (b) where he makes a contract with a person whose mental
capacity is temporarily or permanently affected by reason of age,
illness, or mental or bodily distress.
Sub-section (3) of the section throws the burden of proving that a
contract was not induced by undue influence on the person benefiting
by it when two factors are found against him, namely that he is in a
position to dominate the will of another and the transaction appears
on the face of it or on the evidence adduced to be unconscionable.
The three stages for consideration of a case of undue influence were
expounded in the case of Ragunath Prasad v. Sarju Prasad and others
(AIR 1924 PC 60) in the following words :- "In the first place the
relations between the parties to each other must be such that one is
in a position to dominate the will of the other. Once that position is
substantiated the second stage has been reached-namely, the issue
whether the contract has been induced by undue influence. Upon the
determination of this issue a third point emerges, which is that of
the onus probandi. If the transaction appears to be unconscionable,
then the burden of proving that the contract was not induced by undue
influence is to lie upon the person who was in a position to dominate
the will of the other.”
(emphasis is ours)
The subject of fiduciary relationship was also examined by this Court in,
Krishna Mohan Kul alias Nani Charan Kul vs. Pratima Maity, (2004) 89 SCC
468, wherein it was held as under:
“…..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 and 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.
A person standing in a fiduciary relation to another has a
duty to protect the interest given to his care and the Court watches
with jealously all transactions between such persons so that the
protector may not use his influence or the confidence to his
advantage. When the party complaining shows such relation the law
presumes everything against the transaction and the onus is cast
against the person holding the position of confidence or trust to show
that the transaction is perfectly fair and reasonable, that no
advantage has been taken of his position. This principle has been
engrained in Section 111 of the Indian Evidence Act, 1872 (in short
the 'Evidence Act'). The rule here laid down is in accordance with a
principle long acknowledged and administered in Courts of Equity in
England and America. This principle is that he who bargains in a
matter of advantage with a person who places confidence in him is
bound to show that a proper and reasonable use has been made of that
confidence. The transaction is not necessarily void ipso facto, nor is
it necessary for those who impeach it to establish that there has been
fraud or imposition, but the burden of establishing its perfect
fairness, adequacy and equity is cast upon the person in whom the
confidence has been reposed. The rule applies equally to all persons
standing in confidential relations with each other. Agents, trustees,
executors, administrators, auctioneers, and others have been held to
fall within the rule. The Section requires that the party on whom the
burden of proof is laid should have been in a position of active
confidence where fraud is alleged, the rule has been clearly
established in England that in the case of a stranger equity will not
set aside a voluntary deed or donation, however, improvident it may
be, if it be free from the imputation of fraud, surprise, undue
influence and spontaneously executed or made by the donor with his
eyes open. Where an active confidential, or fiduciary relation exists
between the parties, there the burden of proof is on the donee or
those claiming through him. It has further been laid down that where a
person gains a great advantage over another by a voluntary instrument,
the burden of proof is thrown upon the person receiving the benefit
and he is under the necessity of showing that the transaction is fair
and honest.
13. In judging of the validity of transactions between persons
standing in a confidential relation to each other, it is very material
to see whether the person conferring a benefit on the other had
competent and independent advice. The age or capacity of the person
conferring the benefit and the nature of the benefit are of very great
importance in such cases. It is always obligatory for the
donor/beneficiary under a document to prove due execution of the
document in accordance with law, even de hors the reasonableness or
otherwise of the transaction, to avail of the benefit or claim rights
under the document irrespective of the fact whether such party is the
defendant or plaintiff before Court.
14. It is now well established that a Court of Equity, when a person
obtains any benefit from another imposes upon the grantee the burden,
if he wishes to maintain the contract or gift, of proving that in fact
he exerted no influence for the purpose of obtaining it. The
proposition is very clearly started in Ashburner's Principles of
Equity, 2nd Ed., p.229, thus:
"When the relation between the donor and donee at or shortly
before the execution of the gift has been such as to raise a
presumption that the donee had influence over the donor, the
court sets aside the gift unless the donee can prove that the
gift was the result of a free exercise of the donor's will."”
(emphasis is ours)
The above conclusions recorded by this Court, came to be reiterated
recently in Anil Rishi Vs. Gurbaksh Singh, (2006) 5 SCC 558.
31. While deciding the proposition in hand, we must keep in mind the law
declared by this Court on the subject of fiduciary relationship. We will
also proceed by keeping in mind, what we have already concluded in the
preceding paragraph, i.e., that relationship between Partha Mukherjee and
Pratima Chowdhury was a relationship of faith, trust and confidence.
Partha Mukherjee was in a domineering position. He was married to Sova
Mukherjee. Sova Mukherjee is the daughter of H.P. Roy. Pratima Chowdhury
has lived for a very long time in the house of H.P. Roy. During that
period (after his marriage) Partha Mukherjee also shared the residential
accommodation in the same house with Pratima Chowdhury, for over a decade.
In Indian society the relationship between Partha Mukherjee and Pratima
Chowdhury, is a very delicate and sensitive one. It is therefore, that
Pratima Chowdhury extended all help and support to him, at all times. She
gave him her flat when he was transferred to Calcutta. She also extended
loans to him, when he wanted to set up an independent business at Bombay.
These are illustrative instances of his authority, command and influence.
Instances of his enjoying the trust and confidence of Pratima Chowdhury
include, amongst others, the joint account of Pratima Chowdhury with Partha
Mukherjee, which the latter operated exclusively, and the drafting of the
letters on behalf of Pratima Chowdhury. In such fact situation, we are of
the view, that the onus of substantiating the validity and genuineness of
the transfer of flat no. 5D, by Pratima Chowdhury, through the letter dated
11.11.1992 and the document dated 13.11.1992, rested squarely on the
shoulders of Kalpana Mukherjee. Because it was only the relationship
between Partha Mukherjee and Pratima Chowdhury, which came to be extended
to Kalpana Mukherjee. The document dated 13.11.1992 clearly expressed,
that the above transfer was without consideration. Kalpana Mukherjee in
her written reply before the Arbitrator asserted, that the above transfer
was on a consideration of Rs.4,29,000/-. The Arbitrator in his order dated
5.2.1999 concluded, that Kalpana Mukherjee could not establish the passing
of the above consideration to Pratima Chowdhury. The Cooperative Tribunal,
as well as, the High Court, despite the factual assertion of Kalpana
Mukherjee were of the view, that passing of consideration was not essential
in determination of the genuineness of the transaction. We are of the
view, that the Cooperative Tribunal, as well as, the High Court seriously
erred in their approach, to the determination of the controversy. Even
though the onus of proof rested on Kalpana Mukherjee, the matter was
examined by requiring Pratima Chowdhury to establish all the alleged facts.
We are of the view, that Kalpana Mukherjee miserably failed to discharge
the burden of proof, which essentially rested on her. Pratima Chowdhury
led evidence to show, that she was at Bombay on 11.11.1992 and 13.11.1992.
In view of the above, the letter dated 11.11.1992 and the document dated
13.11.1992, shown to have been executed at Calcutta could not be readily
accepted as genuine, for the said documents fell in the zone of suspicion,
more so, because the manuscript of the letter dated 11.11.1992 was in the
hand-writing of Partha Mukherjee. Leading to the inference, that Partha
Mukherjee was the author of the above letter. It is therefore not
incorrect to infer, that there seems to be a ring of truth, in the
assertion made by Pratima Chowdhury, that Partha Mukherjee had obtained her
signatures for executing the letter and document referred to above. We
find no justification whatsoever for Pratima Chowdhury, to have transferred
flat no. 5D to Kalpana Mukherjee, free of cost, even though she had
purchased the same for a consideration of Rs. 4 lakhs in the year 1987.
Specially so, when she had no direct intimate relationship with Kalpana
Mukherjee. By the time the flat was transferred, more than a decade had
passed by, during which period, the price of above flat, must have
escalated manifold. Numerous other factual aspects have been examined by
us above, which also clearly negate the assertions made by Kalpana
Mukherjee. The same need not be repeated here, for reasons of brevity.
Keeping in mind the above noted aspects, we are of the considered view,
that invocation of the principle of justice and equity, and the doctrine of
fairness, would in fact result in returning a finding in favour of Pratima
Chowdhury, and not Kalpana Mukherjee.
32. For the reasons recorded hereinabove, the instant appeal is allowed,
the order dated 16.5.2002 passed by the Co-operative Tribunal, and the
order dated 14.2.2006 passed by the High Court, are hereby set aside. The
determination rendered by the Arbitrator in his award dated 5.2.1999, is
hereby affirmed. Kalpana Mukherjee is directed to handover the possession
of flat no. 5D to Pratima Chowdhury, within one month from today. The
Society is also directed to retransfer the shares of the Society earlier
held by Pratima Chowdhury, and the ownership rights of flat no. 5D to the
name of Pratima Chowdhury, without any delay.
………………………….CJI.
(P. Sathasivam)
…………………………….J.
(Jagdish Singh Khehar)
New Delhi;
February 10, 2014.
-----------------------
69
i) Whether the Plaintiff tendered resignation on 11.11.92 from
the membership of the Society or not.
ii) Was the document executed on 13.11.92 a deed of transfer of
flat or an agreement for transfer of flat.
iii) Whether consideration money was paid by the Defendant no. 1
to the plaintiff or not.
iv) Whether the payment of consideration money by way of
transfer of shares of companies can be treated as valid
payment of consideration money or not.
v) Whether the Defendant no. 2 accepted the admission of the
membership of the Defendant no. 1 on 14.2.93 or
vi) Whether the flat in question was encumbered due to
existence of lease and license agreement at the material
point of time i.e. on 11.11.92 or on 13.11.92.
“QUESTIONS OF LAW INVOLVED
i) Whether the instant dispute is barred by law of limitation.
ii) Whether sub-section 9 of section 85 of West Bengal Co-
Operative Societies Act, 1983 was followed in case of
transfer of flat in question of the plaintiff.
iii) Whether section 69 and 70 of the West Bengal Co-Operative
Societies Act 1983 were followed in respect of admission of
membership of the Defendant no. 1.
iv) Whether Rules 135(3) (a) and 142(1) of West Bengal Co-
Operative Societies Rules 1987 were obeyed or not.
v) Whether Rule 127(1) of West Bengal Co-Operative Societies
Rules 1987 was obeyed in case of nomination or not.
vi) Whether the disputed transfer of flat contradicted the
relevant provisions of the Bye-laws of the Defendant
Society or not.
vii) The Doctrine of estoppel as per sections 115 & 116 of the
Evidence Act 1872 whether attracted or not.”
“Keeping in view of the all above, I am of the opinion that the
transfer of the flat no. 5D of the Defendant No. 2 Society was
not done in accordance with laws including West Bengal Co-
Operative Socities Act, Rules, Indian Contract Act, Transfer of
Property Act due to reason at a glance.
1) Section 85(9), Section 70, Section 69 of West Bengal Co-
Operative Socities Act 1983 have been flouted.
2) Rule 127(1), Rule 135(3)(a), Rule 142(1) have been
flouted.
3) Bye-laws have been contradicted.
4) No consideration money was paid by the Defendant no. 1 to
the Plaintiff.
5) Societies accepted the resignation of the Plaintiff on
14.2.93 which she had not tendered, if that be so, the
society did not act as per Rule 143 also.
6) The flat in dispute was under the lease and license
agreement at the material time since bank account in this
respect was operated by the son of the Defendant no. 1 who
also deposited cheque on Plaintiff’s behalf.
7) The instant dispute case is not barred by limitation.
8) The transaction of 13.11.92 does not attract the doctrine of estoppel.”
“AWARD
Keeping in view of the above, based on documents, assessing all
the pros and cons, on the basis of equity, justice and good
conscience, I pass the following ‘AWARD’:
a) The agreement dt. 13.11.92 between the Plaintiff and
Defendant no. 1 is invalid, void and incomplete and
b) The relevant resolution dt. 14.2.93 (Agenda no. 1) of the
Managing Committee of the Defendant no. 2 is quashed and;
c) The Defendant no. 2 is directed to ensure and conform that
the plaintiff gets the possession of flat no. 5D with
garage space with immediate effect and issue share
certificate in her name immediately and
d) Any other action if any taken by any authority on and
after 13.11.92 affecting the membership of the Plaintiff in
any manner whatever is also quashed.
The above Judgment and Award have been given on
Pronouncement before the parties present.”
The Co-operative Tribunal as well as the High Court, had invoked the
principle of justice and equity, and the doctrine of fairness, while
recording their eventual findings in favour of Kalpana Mukherjee. It is,
therefore, necessary for us, to delve upon the above aspect of the matter.
Before we venture to examine the instant controversy in the above
perspective, it is necessary to record a few facts. It is not a matter of
dispute, that for a long time Pratima Chowdhury had been residing at
Bombay. She was residing at Bombay in the house of H.P. Roy and Bani Roy.
Bani Roy, as stated above, is the sister of Pratima Chowdhury. H.P. Roy is
a wealthy person. Partha Mukherjee son of Kalpana Mukherje, is an
engineering graduate from IIT, Kharagpur. He also possesses the
qualification of MBA, which he acquired from Ahmedabad. Originally Partha
Mukherjee was employed as Sales Manager/Regional Manager with Colgate
Palmolive (India) Limited, at Bombay. Partha Mukherjee married Sova
Mukherjee (the daughter of H.P. Roy), whilst he was posted at Bombay in
1987. Soon after his marriage, Partha Mukherjee and Sova Mukherjee also
started to live in the house of H.P. Roy (father-in-law of Partha
Mukherjee). The evidence available on the record of the case reveals, that
Pratima Chowdhury treated Sova Mukherjee as her daughter, and Partha
Mukherjee as her son. In 1992, Partha Mukherjee was transferred from
Bombay to Calcutta. Immediately on his transfer, Pratima Chowdhury
accommodated him in flat no. 5D. Subsequently, Colgate Palmolive (India)
Limited entered into a lease and licence agreement, in respect of flat no.
5D with Pratima Chowdhury, so as to provide residential accommodation to
Partha Mukherjee (as per the terms and conditions of his employment).
Obviously, Partha Mukherjee was instrumental in the execution of the above
lease and licence agreement. In order to deposit monthly rent payable to
Pratima Chowdhury (by Colgate Palmolive (India) Limited), Partha Mukherjee
opened a bank account in the name of Pratima Chowdhury, jointly with
himself. He exclusively operated the above account, for deposits as well
as for withdrawals. Not only that, the findings recorded by the Arbitrator
indicate that the letter dated 11.11.1992 written by Pratima Chowdhury was
drafted by Partha Mukherjee. The aforesaid conclusion was drawn from the
fact that the manuscript of the original was in the handwriting of Partha
Mukherjee. All the above facts demonstrate, a relationship of absolute
trust and faith between Pratima Chowdhury and Partha Mukherjee. The
aforesaid relationship emerged, not only on account of the fact that Partha
Mukherjee was married to Sova Mukherjee (the niece of Pratima Chowdhury),
but also on account of the fact, that Partha Mukherjee and his wife Sova
Mukherjee soon after their marriage lived in the house of H.P. Roy (husband
of the sister of Pratima Chowdhury). They resided together with Pratima
Chowdhury till 1992, i.e., for a period of more than a decade, before
Partha Mukherjee was transferred to Calcutta. In our considered view the
relationship between Partha Mukherjee and Pratima Chowdhury would
constitute a fiduciary relationship. Even though all the above aspects of
the relationship between the parties were taken into consideration, none of
the adjudicating authorities dealt with the controversy, by taking into
account the fiduciary relationship between the parties. When parties are
in fiduciary relationship, the manner of examining the validity of a
transaction, specifically when there is no reciprocal consideration, has to
be based on parameters which are different from the ones applicable to an
ordinary case. Reference in this behalf, may be made to the decision
rendered by this Court
in Subhas Chandra Das Mushib vs. Ganga Prosad Das
Mushib, AIR 1967 SC 878, wherein this Court examined the twin concepts of
“fiduciary relationship” and “undue influence” and observed as under:
“We may now proceed to consider what are the essential in- gredients
of undue influence and how a plaintiff who seeks relief on this ground
should proceed to prove his case and when the defendant is called upon
to show that the contract or gift was not induced by undue influence.
The instant case is one of gift but it is well settled that the law as
to undue influence is the same in the case of a gift inter- vivos as
in the case of a contract.
Under s. 16 (1) of the Indian Contract Act 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. This shows that the court trying a case of
undue influence must consider two things to start with, namely, (1)
are the relations between the donor and the donee such that the donee
is in a position to dominate the will of the donor and (2) has the
donee used that position to obtain an unfair advantage over the
donor'?
Sub-section (2) of the section is illustrative as to when a person is
to considered to be in a position to dominate the will of another.
These are inter alia (a) where the donee holds a real or apparent
authority over the donor or where he stands in a fiduciary relation to
the donor or (b) where he makes a contract with a person whose mental
capacity is temporarily or permanently affected by reason of age,
illness, or mental or bodily distress.
Sub-section (3) of the section throws the burden of proving that a
contract was not induced by undue influence on the person benefiting
by it when two factors are found against him, namely that he is in a
position to dominate the will of another and the transaction appears
on the face of it or on the evidence adduced to be unconscionable.
The three stages for consideration of a case of undue influence were
expounded in the case of Ragunath Prasad v. Sarju Prasad and others
(AIR 1924 PC 60) in the following words :- "In the first place the
relations between the parties to each other must be such that one is
in a position to dominate the will of the other. Once that position is
substantiated the second stage has been reached-namely, the issue
whether the contract has been induced by undue influence. Upon the
determination of this issue a third point emerges, which is that of
the onus probandi. If the transaction appears to be unconscionable,
then the burden of proving that the contract was not induced by undue
influence is to lie upon the person who was in a position to dominate
the will of the other.”
Burden lies on when fraud, mis representation or undue influence is alleged ?
Krishna Mohan Kul alias Nani Charan Kul vs. Pratima Maity, (2004) 89 SCC
468, wherein it was held as under:
“…..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 and 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.
on the subject of fiduciary relationship.
"When the relation between the donor and donee at or shortly
before the execution of the gift has been such as to raise a
presumption that the donee had influence over the donor, the
court sets aside the gift unless the donee can prove that the
gift was the result of a free exercise of the donor's will."”
(emphasis is ours)
The above conclusions recorded by this Court, came to be reiterated
recently in Anil Rishi Vs. Gurbaksh Singh, (2006) 5 SCC 558.
We will
also proceed by keeping in mind, what we have already concluded in the
preceding paragraph, i.e., that relationship between Partha Mukherjee and
Pratima Chowdhury was a relationship of faith, trust and confidence.
Partha Mukherjee was in a domineering position. He was married to Sova
Mukherjee. Sova Mukherjee is the daughter of H.P. Roy. Pratima Chowdhury
has lived for a very long time in the house of H.P. Roy. During that
period (after his marriage) Partha Mukherjee also shared the residential
accommodation in the same house with Pratima Chowdhury, for over a decade.
In Indian society the relationship between Partha Mukherjee and Pratima
Chowdhury, is a very delicate and sensitive one. It is therefore, that
Pratima Chowdhury extended all help and support to him, at all times. She
gave him her flat when he was transferred to Calcutta. She also extended
loans to him, when he wanted to set up an independent business at Bombay.
These are illustrative instances of his authority, command and influence.
Instances of his enjoying the trust and confidence of Pratima Chowdhury
include, amongst others, the joint account of Pratima Chowdhury with Partha
Mukherjee, which the latter operated exclusively, and the drafting of the
letters on behalf of Pratima Chowdhury. In such fact situation, we are of
the view, that the onus of substantiating the validity and genuineness of
the transfer of flat no. 5D, by Pratima Chowdhury, through the letter dated
11.11.1992 and the document dated 13.11.1992, rested squarely on the
shoulders of Kalpana Mukherjee. Because it was only the relationship
between Partha Mukherjee and Pratima Chowdhury, which came to be extended
to Kalpana Mukherjee. The document dated 13.11.1992 clearly expressed,
that the above transfer was without consideration. Kalpana Mukherjee in
her written reply before the Arbitrator asserted, that the above transfer
was on a consideration of Rs.4,29,000/-. The Arbitrator in his order dated
5.2.1999 concluded, that Kalpana Mukherjee could not establish the passing
of the above consideration to Pratima Chowdhury. The Cooperative Tribunal,
as well as, the High Court, despite the factual assertion of Kalpana
Mukherjee were of the view, that passing of consideration was not essential
in determination of the genuineness of the transaction. We are of the
view, that the Cooperative Tribunal, as well as, the High Court seriously
erred in their approach, to the determination of the controversy. Even
though the onus of proof rested on Kalpana Mukherjee, the matter was
examined by requiring Pratima Chowdhury to establish all the alleged facts.
We are of the view, that Kalpana Mukherjee miserably failed to discharge
the burden of proof, which essentially rested on her. Pratima Chowdhury
led evidence to show, that she was at Bombay on 11.11.1992 and 13.11.1992.
In view of the above, the letter dated 11.11.1992 and the document dated
13.11.1992, shown to have been executed at Calcutta could not be readily
accepted as genuine, for the said documents fell in the zone of suspicion,
more so, because the manuscript of the letter dated 11.11.1992 was in the
hand-writing of Partha Mukherjee. Leading to the inference, that Partha
Mukherjee was the author of the above letter. It is therefore not
incorrect to infer, that there seems to be a ring of truth, in the
assertion made by Pratima Chowdhury, that Partha Mukherjee had obtained her
signatures for executing the letter and document referred to above. We
find no justification whatsoever for Pratima Chowdhury, to have transferred
flat no. 5D to Kalpana Mukherjee, free of cost, even though she had
purchased the same for a consideration of Rs. 4 lakhs in the year 1987.
Specially so, when she had no direct intimate relationship with Kalpana
Mukherjee. By the time the flat was transferred, more than a decade had
passed by, during which period, the price of above flat, must have
escalated manifold. Numerous other factual aspects have been examined by
us above, which also clearly negate the assertions made by Kalpana
Mukherjee. The same need not be repeated here, for reasons of brevity.
Keeping in mind the above noted aspects, we are of the considered view,
that invocation of the principle of justice and equity, and the doctrine of
fairness, would in fact result in returning a finding in favour of Pratima
Chowdhury, and not Kalpana Mukherjee.
For the reasons recorded hereinabove, the instant appeal is allowed,
the order dated 16.5.2002 passed by the Co-operative Tribunal, and the
order dated 14.2.2006 passed by the High Court, are hereby set aside. The
determination rendered by the Arbitrator in his award dated 5.2.1999, is
hereby affirmed. Kalpana Mukherjee is directed to handover the possession
of flat no. 5D to Pratima Chowdhury, within one month from today. The
Society is also directed to retransfer the shares of the Society earlier
held by Pratima Chowdhury, and the ownership rights of flat no. 5D to the
name of Pratima Chowdhury, without any delay.
2014 ( Feb. Part)judis.nic.in/supremecourt/filename=41212
P SATHASIVAM, JAGDISH SINGH KHEHAR
“REPORTABLE”
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1938 OF 2014
(Arising out of SLP (Civil) Nos. 15252 of 2006)
Pratima Chowdhury …Appellant
Versus
Kalpana Mukherjee & Anr. ...Respondents
J U D G M E N T
JAGDISH SINGH KHEHAR, J.
1. Orchestra Co-operative House Society Limited (hereinafter referred to
as ‘the Society’) raised flats at 48/IE, Gariahat Road, Calcutta – 700019.
Indirani Bhattarcharya became a member of the Society on 12.1.1987. She
was issued share certificates bearing nos. 0047 and 0048.
Based on the
above membership she was allotted flat no. 5D for a consideration of Rs. 4 lakhs.
The above flat measuring 900 sq. ft. comprised of three bed rooms,
two bath rooms, one drawing-cum-dinning room, a kitchen and verandah on the
fourth floor.
In addition to the above, she was allotted one covered
garage space on the ground floor.
The transfer of the flat no. 5D by the
Society to Indirani Bhattacharya was approved by the Deputy Registrar, Co-
operative Societies.
2. On 27.3.1991, Indirani Bhattacharya submitted her resignation from
the Society in favour of Pratima Chowdhury (i.e., the petitioner herein).
On 15.4.1991, Indirani Bhattacharya executed an agreement for transfer of
flat no. 5D to Pratima Chowdhury subject to the consent of the Society and
the approval of the Deputy Registrar, Co-operative Societies, for a
consideration of Rs. 4 lakhs. The Society having consented to the request
of Indirani Bhattacharya sought the approval of the Deputy Registrar, Co-
operative Societies through a letter dated 29.4.1991.
In this behalf it
would also be relevant to mention that Board of Directors of the Society
had resolved in its meeting held on 16.2.1992, to accept the resignation of
Indirani Bhattacharya, as also, the consequential transfer of the
membership of the Society and the ownership of the flat to the name of
Pratima Chowdhury.
In the above resolution, the name of Pratima Chowdhury
as a member of the Society was approved with effect from 9.1.1992. The
Secretary of the Society informed Pratima Chowdhury on 17.2.1992, that her
membership to the Society, as also, the transfer of flat no. 5D to her
name, had been approved by the Deputy Registrar, Co-operative Societies.
3. The facts available on the records reveal that Partha Mukherjee (son-in-
law of the petitioner’s sister, and son of the respondent) occupied the
petitioner’s flat.
Partha Mukherjee was employed as Regional Sales Manager
with Colgate Palmolive (India) Limited. On 9.3.1992, Colgate Palmolive
(India) Limited, confirmed having taken flat no. 5D on lease and license,
for a period of three years (with effect from 1.4.1992), for the residence
of Partha Mukherjee. The pleadings also reveal, that with effect from
1.4.1992, Colgate Palmolive (India) Limited, took the aforesaid flat on a
monthly rent of Rs. 5,000/-. The above said monthly rent, was deposited in
the joint account of the petitioner Pratima Chowdhury and Partha Mukherjee.
4. On 29.6.1992, the petitioner Pratima Chowdhury addressed a letter to
the Secretary of the Society, requesting the Society to transfer flat no.
5D to the name of her nominee Kalpana Mukherjee.
The letter dated
29.6.1992 of Pratima Chowdhury, made some express factual disclosures.
Firstly, that she was not in good health.
Secondly, that she was not in a
position to move to Calcutta from Bombay in the near future.
Thirdly, that
Kalpana Mukherjee was already residing in the flat in question along with
Partha Mukherjee.
Fourthly, that above nominee Kalpana Mukherjee was her
close relative. In addition to the request of transfer of flat no. 5D in
favour of her nominee Kalpana Mukherjee, Pratima Chowdhury also informed
the Society through her letter dated 29.6.1992, that all municipal taxes
and service charges in connection with the above flat should be collected
from Kalpana Mukherjee.
5. Pratima Chowdhury then addressed another letter dated 11.11.1992, to
the Secretary of the Society, reiterating her request made in the previous
letter dated 29.6.1992 wherein she again expressed clearly that the
transfer being sought by her, was without any monetary consideration.
6. It was pointed out in letter dated 11.11.1992, that the formal request
for the transfer was only being made, in order to comply with the rules
regulating such transfer, and also, to avoid future complications.
Consequent upon the aforesaid deliberations, Pratima Chowdhury executed an
agreement dated 13.11.1992, transferring her right, title and interest in
the flat no. 5D. On the same day as the aforesaid agreement was executed,
Kalpana Mukherjee moved an application (on 13.11.1992).
7. The Board of Directors of the Society in their meeting held on
14.2.1993, resolved to accept the resignation of Pratima Chowdhury, and to
accept the membership of Kalpana Mukherjee (in place of Pratima Chowdhury),
and to seek the approval of the Deputy Registrar, Co-operative Societies
for the transfer of flat no. 5D to the name of Kalpana Mukherjee, on the
basis of letters of Pratima Chowdhury dated 11.11.1992 and 13.11.1992.
Accordingly, the Secretary of the Society addressed a letter dated
10.3.1993 to the Deputy Registrar, Co-operative Societies, for the approval
of the decision of the Board of Directors (of the Society, dated
14.2.1993).
8. On 23.4.1993, Pratima Chowdhury wrote a letter to the Senior Commercial
Executive, of the Calcutta Electric Supply Corporation (South Region
Office) requesting him to transfer the electricity-supply meter of flat no.
5D to the name of Kalpana Mukherjee. The instant letter dated 23.4.1993,
is also disputed by Pratima Chowdhury. She has even disputed her signature
on the said letter. She also filed a first information report at the
Gariahat Police Station, Kolkata, complaining that her signature on the
above letter was forged.
9. The Assistant Registrar, Co-operative Societies raised certain
objections on the request of the Society for transfer of flat no. 5D from
the name of Pratima Chowdhury to the name of Kalpana Mukherjee. In this
behalf the Assistant Registrar, Co-operative Societies informed the
Secretary of the Society, that the application of Kalpana Mukherjee for
membership had not been submitted in the proper format. It was also
pointed out, that the original affidavit had not been appended to the
application. Lastly, it was brought out, that the Salary Certificate,
Income Tax Clearance Certificate and Professional Tax Certificates had not
been appended to the application of Kalpana Mukherjee, for the transfer of
the flat in her name. On 22.9.1993, the Secretary of the Society provided
all the required documents sought by the Department of the Co-operative
Societies.
10. Partha Mukherjee was transferred by his employer Colgate Palmolive
(India) Limited, from Calcutta to Bombay. Consequently, Colgate Palmolive
(India) Limited terminated the agreement executed by it with Pratima
Chowdhury on 19.10.1993, with immediate effect. In the letter dated
19.10.1993, Colgate Palmolive (India) Limited required Partha Mukherjee to
hand over vacant possession of flat no. 5D to Pratima Chowdhury, after
refund of security. On 21.10.1993, Kalpana Mukherjee, from her own
account, deposited rent in the Bank account of Pratima Chowdhury. On
28.10.1993, Partha Mukherjee addressed a letter to P.R. Keswani, Company
Secretary of Colgate Palmolive (India) Limited, along with a receipt
bearing no. 9893, depicting refund of the security deposit (of Rs. 60,000/-
). The aforesaid refund was shown to have been made by Pratima Chowdhury.
11. On 16.12.1994, 500 shares of Tata Chemicals Limited, 50 shares of
Siemens, 500 shares of Indian Aluminium and 100 shares of I.T.C. Hotels,
standing in the joint names of Partha Mukherjee and Sova Mukherjee (wife of
Partha Mukherjee) were transferred to the name of Pratima Chowdhury.
According to the petitioner Pratima Chowdhury, the above transfer of shares
was in lieu of loans extended by her to Partha Mukherjee. However,
according to Kalpana Mukherjee, the transfer of the above shares,
constituted consideration paid on her behalf (by her son Partha Mukherjee)
to Pratima Chowdhury in lieu of the transfer of flat no. 5D.
12. Pratima Chowdhury wrote a letter dated 28.2.1995 to the Secretary of
the Society, that she had not received any reply to her letter dated
11.11.1992. She also informed the Secretary of the Society, that she had
decided to return to Calcutta permanently. Accordingly, she informed the
Secretary of the Society, that her request for transfer of her membership
to the name of Kalpana Mukherjee, be treated as withdrawn. It is the case
of Pratima Chowdhury, that the Society never responded to her letter dated
28.2.1995. It is also her case, that her letter dated 28.2.1995 was never
forwarded by the Society, to the Department of Co-operative Societies.
13. On 8.3.1995, the Society approached the Deputy Registrar, Co-operative
Societies, seeking approval for the admission of Kalpana Mukherjee as a
member of the Society (in place of Pratima Chowdhury). On 13.3.1995, the
Deputy Registrar, Co-operative Societies conditionally approved the
membership of Kalpana Mukherjee. Accordingly, on 13.3.1995 itself the
shares of Pratima Chowdhury were transferred to the name of Kalpana
Mukherjee.
On 22.3.1995, Pratima Chowdhury addressed a letter to the
Deputy Registrar, Co-operative Societies, with a copy to the Chairman of
the Society. In the above letter, the Deputy Registrar, Co-operative
Societies was requested to direct the Society to withdraw the offer of
transfer of her membership to Kalpana Mukherjee. It was also requested,
that the application made by Kalpana Mukherjee for transfer of share
certificates in her name, be not approved. The instant letter dated
22.3.1995, depicts the fact that Pratima Chowdhury was unaware of the
deliberations of the Society, as also, the approval (of the deliberations
of the Society), by the Deputy Registrar, Co-operative Societies, on
13.3.1995. In pursuit of the same objective, Pratima Chowdhury wrote
another letter dated 28.3.1995, to the Secretary of the Society. She
enclosed therewith, the letter which she had addressed to the Deputy
Registrar, Co-operative Societies dated 22.3.1995. Therein, she again
reiterated, that her request for transfer of membership in favour of
Kalpana Mukherjee be treated as withdrawn. In order to consider the
request made by Pratima Chowdhury in her letter dated 22.3.1995 (to the
Deputy Registrar, Co-operative Societies) and the letter dated 28.3.1995
(to the Secretary of the Society); the Society convened a meeting of the
Board of Directors on 2.4.1995. Rather than considering the issue on
merits, the Board of Directors resolved, that it had no legal competence to
restore the membership of the Society, as also, the retransfer of the
ownership of the flat no. 5D, to Pratima Chowdhury. Having so resolved,
the Secretary of the Society forwarded a copy of the resolution dated
2.4.1995, to the petitioner on 10.4.1995.
14. At this juncture, it would be relevant to mention, that the Board of
Directors of the Society approved the transfer of flat no. 5D (comprising
of three bed rooms, two bath rooms, one drawing-cum-dinning room, one
verandah and one kitchen on the fourth floor, located at no. 48/IE,
Gariahat Road, Calcutta - 700019 to the name of Kalpana Mukherjee. In
addition to the aforesaid flat, the ownership of Pratima Chowdhury also
comprised of a covered garage space, on the ground floor. The same were
not mentioned in the clearances dated 14.2.1993 (by the Board of Directors
of the Society) and 13.3.1995 (by the Deputy Registrar, Co-operative
Societies). Consequently based on the agreement dated 25.4.1995 between
Kalpana Mukherjee and the Society, the said garage space was also
subsequently transferred to the name of Kalpana Mukherjee.
15. On 16.4.1995 within two weeks, from the date decision taken by the
Board of Directors (on 2.4.1995) and within one week from the date of
communication thereof to the petitioner (through letter dated 10.4.1995),
Pratima Chowdhury addressed a notice dated 16.4.1995, contesting the
validity of the Board of Directors’ Resolution dated 2.4.1995. The
petitioner also assailed the approval of the said transfer dated 13.3.1995.
The Deputy Registrar, Co-operative Societies referring to the petitioner’s
letter dated 28.2.1995 (wherein Pratima Chowdhury had withdrawn her request
for transfer of membership in favour of Kalpana Mukherjee), wrote a letter
dated 31.5.1995 to the Secretary of the Society. In the letter dated
31.5.1995, the Deputy Registrar, Co-operative Societies also highlighted
the fact that, the Society had not brought the letter dated 28.2.1995 to
the notice of Deputy Registrar, Co-operative Societies, at the time of
seeking approval of the Co-operative Department. The Secretary of the
Society was accordingly directed, to take a decision on the matter, and to
forward the same to the Deputy Registrar, Co-operative Societies. Being
alive of the letter dated 31.5.1995, which was addressed by the Deputy
Registrar, Co-operative Societies to the Secretary of the Society, the
petitioner through her letter dated 13.6.1995 informed the Secretary of the
Society, that the withdrawal letter dated 28.2.1995 addressed by her was
received by the Secretary of the Society, and further that the same had
been duly acknowledged on 6.3.1995. The petitioner highlighted the fact,
that the approval of the Deputy Registrar, Co-operative Societies should
not have been sought (by the Secretary of the Society), after the receipt
of the petitioner’s communication dated 28.2.1995.
16. Since, the petitioner was not communicated any determination, by the
concerned authorities. She addressed a notice on 9.9.1995, calling upon
the Secretary of the Society, to deliver the possession of the flat no. 5D,
along with the share certificates, to her within seven days of the receipt
of the said notice. On 21.11.1995, the Society denied all the allegations
made by the petitioner against the Society (contained in the notice). On
the claim of retransfer of the shares and flat made by the petitioner, the
Society responded by asserting, that the shares had been transferred to the
name of Kalpana Mukherjee, and on the basis thereof flat no. 5D also had
been transferred in her name, thereupon, the Society did not have any legal
authority to restore/retransfer the same to the name of the petitioner. On
19.12.1995, the Deputy Registrar, Co-operative Societies also informed
Pratima Chowdhury, that the transfer of her shares and flat in favour of
Kalpana Mukherjee had been completed, and since the Society had resolved on
2.4.1995 that it had no legal competence to cancel the same, nothing could
be done in the matter.
17. Dissatisfied with the determination of the Co-operative Societies, as
also, the denial of the consideration at the hands of the Deputy Registrar,
Co-operative Societies, the petitioner filed Dispute Case No. 29/RCS of
1995-96. The aforesaid dispute case was adjudicated upon by D.K. Ghosh in
his capacity as Arbitrator.
17(i) During the course of the above determination, Kalpana Mukherjee (who
was impleaded as respondent no. 1) filed a reply on 22.2.1996 which
deserves a special mention.
Firstly, according to the reply filed by
Kalpana Mukherjee flat no. 5D was purchased by Partha Mukherjee in the name
of Kalpana Mukherjee (mother of Partha Mukherjee). The above flat was
purchased for a total consideration of Rs. 4,29,000/-. The said
consideration was paid by way of transfer of shares, in the name of Partha
Mukherjee to the name of Pratima Chowdhury. Highlighting the above factual
position is important because the entire paper work pertaining to the
transfer of flat no. 5D, from the name of Pratima Chowdhury to the name of
Kalpana Mukherjee indicates, that the above transfer was without any
monetary consideration, whereas stands adopted by Kalpana Mukherjee was
that as a matter of fact the said transfer was on a consideration of Rs.
4,29,000/-. Secondly, according to Kalpana Mukherjee (respondent no. 1),
Pratima Chowdhury’s letter dated 28.2.1995 was afterthought. It is
therefore, that Kalpana Mukherjee in her reply emphasized that the letter
dated 28.2.1995, was only a scheme devised by Pratima Chowdhury to wriggle
out of the transaction.
17(ii) The Secretary of the Society filed separate written reply to
the case filed by Pratima Chowdhury. In its reply the Society supported
the transfer of shares, as also, the transfer of flat no. 5D to the name of
Kalpana Mukherjee. The Society clearly brought out in their reply, that
Pratima Chowdhury through her letter dated 29.6.1992 had informed the
Society, that Kalpana Mukherjee was in occupation of the flat, and as such,
maintenance charges for the flat should be recovered from her.
Furthermore, according to the Society, the transfer of the shares, as also,
of flat no. 5D to the name of Kalpana Mukherjee was approved at the request
of Pratima Chowdhury, made through her letter dated 11.11.1992. It was
submitted, that the aforesaid request was considered by the Department of
Co-operative Societies, which approved the resignation of Pratima Chowdhury
and the consequential transfer of membership vide Resolution of the Board
of Directors of the Society dated 14.2.1993. The above resolution had been
forwarded by the Secretary of the Society, to the Deputy Registrar, Co-
operative Societies (by letter dated 10.3.1993), for approval. It was
pointed out that the Deputy Registrar, Co-operative Societies had approved
the Resolution of Board of Directors of the Co-operative Societies on
13.3.1995. Additionally, it was pointed out, that after the approval of
the change of membership to the name of Kalpana Mukherjee, the petitioner
Pratima Chowdhury had required the Senior Commercial Executive of Calcutta
Electric Supply Corporation, to transfer the electricity-supply meter of
flat no. 5D to the name of Kalpana Mukherjee. According to the Society,
the above facts clearly evidenced the unequivocal intention of Pratima
Chowdhury to transfer her shares and flat no. 5D to the name of Kalpana
Mukherjee, which was given due effect to by the Society after seeking the
approval of the Deputy Registrar, Co-operative Societies. In view of the
aforestated factual position, the Society denied the claim raised by
Pratima Chowdhury in Dispute Case No. 29/RCS of 1995-96.
17(iii) It is also imperative to record herein, that Pratima Chowdhury
had filed rejoinder, to the written statements filed on behalf of Kalpana
Mukherjee and the Society before the Arbitrator. It was pointed out in the
rejoinder, that Partha Mukherjee was married to Sova Mukherjee. Sova
Mukherjee was the daughter of H.P. Roy and Bani Roy (sister of the
petitioner, Pratima Chowdhury). On account of the above relationship she
had treated Sova Mukherjee as her daughter and Partha Mukherjee as her son.
Consequently on the transfer of Partha Mukherjee to Calcutta (from
Bombay), she allowed him to reside in flat no. 5D. At the behest of Partha
Mukherjee, his employer Colgate Palmolive (India) Limited entered into a
lease agreement with Pratima Chowdhury on 9.3.1992. Under the lease
agreement Pratima Chowdhury was entitled to rent at the rate of Rs. 5,000/-
per month. The lease agreement was executed for a period of three years,
with overriding condition, that the tenure of lease would coincide with
the tenure of Partha Mukherjee at Calcutta, while in the employment of
Colgate Palmolive (India) Limited. It was also pointed out, that Partha
Mukherjee had opened a joint account along with petitioner Pratima
Chowdhury, for the deposit of rent payable by Colgate Palmolive (India)
Limited. It was also pointed out, that Partha Mukherjee singularly
operated the aforesaid joint account. In his above capacity he encashed
the rent deposited by Colgate Palmolive (India) Limited, without the
knowledge and notice of the petitioner Pratima Chowdhury. She also
asserted in the rejoinder, that she could obtain the details of the
agreement executed with Colgate Palmolive (India) Limited, as also, the
deposits of rent in her joint account with Partha Mukherjee, only after she
had issued a letter to Colgate Palmolive (India) Limited, that she would
not make any claim from the employer of Partha Mukherjee, on the basis of
information supplied. In her rejoinder Pratima Chowdhury also asserted,
that Partha Mukherjee had forced her to sign the letter dated 11.11.1992,
without disclosing the contents thereof. The categoric stance adopted by
Pratima Chowdhury in her rejoinder was, that she was not aware of the
contents of letter dated 11.11.1992, and furthermore, Partha Mukherjee had
obtain her signature on other blank papers as well, by falsely informing
her that the papers would be used to explain his stay in flat no. 5D. She
also denied having executed the document dated 13.11.1992, which was
allegedly notarized at Calcutta. In fact she denied her presence at
Calcutta on 13.11.1992. She further stated, that Partha Mukherjee did not
remain in employment of Colgate Palmolive (India) Limited after his
transfer to Bombay. It was also pointed out by her, that on his return to
Bombay, Partha Mukherjee started his independent business in aluminium
products. For the said business Pratima Chowdhury claims to have advanced
a loan of Rs.2 lakhs to Partha Mukherjee. The loan stated to have been
extended to Partha Mukherjee was by way of a cheque drawn in favour of
Bharat Aluminium Company, for the supply of raw material for the business
of Partha Mukherjee. She further contended, that Partha Mukherjee also
took loan of Rs. 1,50,000/- from Bani Roy (sister of the petitioner,
Pratima Chowdhury). It was pointed out, that the share certificates held
by Partha Mukherjee jointly with his wife Sova Mukherjee, were transferred
to the petitioner Pratima Chowdhury and her sister Bani Roy during the year
1994, toward repayment of loans taken from them by Partha Mukherjee. The
position accordingly adopted was, that the transfer of share certificates
did not constitute consideration in lieu of the transfer of flat no. 5D to
Kalpana Mukherjee. A categoric assertion was made by the petitioner
Pratima Chowdhury in her rejoinder, that on 30.11.1992 Partha Mukherjee had
no company shares either in his own name or in the name of his wife Sova
Mukherjee (nor in the joint names of the husband and wife). Accordingly,
the plea raised by Kalpana Mukherjee in her reply (to the dispute case
filed by the petitioner Pratima Chowdhury) was that the transfer
transaction was for consideration, and that, the payment of consideration
made by transfer of shares from the name of Partha Mukherjee to the name of
Pratima Chowdhury, was false. Pratima Chowdhury also denied, that she had
addressed a letter dated 23.4.1993 to the Senior Commercial Executive of
the Calcutta Electric Supply Corporation (South Region Office). She
disputed even her signatures on the above letter, and further asserted,
that she had filed a first information report at the Gariahat Police
Station, Kolkata. On the basis of the factual position noticed
hereinabove, the petitioner Pratima Chowdhury reiterated, that she had
neither surrendered, nor resigned from the membership of the Society, nor
had she sought the transfer of flat no. 5D from her name to the name of
Kalpana Mukherjee.
18. Before the Arbitrator, the petitioner examined three witnesses. She
examined herself as PW1, she examined Vani Ganapati as PW2 and H.P. Roy as
PW3. H.P. Roy PW3 (is married to Bani Roy, the sister of the petitioner
Pratima Chowdhury) is the father-in-law of Partha Mukherjee. Kalpana
Mukherjee examined four witnesses in her defence. She examined herself as
DW1, Partha Mukherjee her son was examined as DW2, the Secretary of the
Society was examined as DW3 and S.N. Chatterjee, Advocate, who had
notarized the documents referred to above, was examined as DW4.
19. In the process of adjudicating upon the matter, the Arbitrator framed
six issues of fact, and seven issues of law. The same are being extracted
hereunder:
“QUESTIONS OF FACT INVOLVED
i) Whether the Plaintiff tendered resignation on 11.11.92 from
the membership of the Society or not.
ii) Was the document executed on 13.11.92 a deed of transfer of
flat or an agreement for transfer of flat.
iii) Whether consideration money was paid by the Defendant no. 1
to the plaintiff or not.
iv) Whether the payment of consideration money by way of
transfer of shares of companies can be treated as valid
payment of consideration money or not.
v) Whether the Defendant no. 2 accepted the admission of the
membership of the Defendant no. 1 on 14.2.93 or
vi) Whether the flat in question was encumbered due to
existence of lease and license agreement at the material
point of time i.e. on 11.11.92 or on 13.11.92.
“QUESTIONS OF LAW INVOLVED
i) Whether the instant dispute is barred by law of limitation.
ii) Whether sub-section 9 of section 85 of West Bengal Co-
Operative Societies Act, 1983 was followed in case of
transfer of flat in question of the plaintiff.
iii) Whether section 69 and 70 of the West Bengal Co-Operative
Societies Act 1983 were followed in respect of admission of
membership of the Defendant no. 1.
iv) Whether Rules 135(3) (a) and 142(1) of West Bengal Co-
Operative Societies Rules 1987 were obeyed or not.
v) Whether Rule 127(1) of West Bengal Co-Operative Societies
Rules 1987 was obeyed in case of nomination or not.
vi) Whether the disputed transfer of flat contradicted the
relevant provisions of the Bye-laws of the Defendant
Society or not.
vii) The Doctrine of estoppel as per sections 115 & 116 of the
Evidence Act 1872 whether attracted or not.”
20. It is necessary for us to briefly record the factual as also the
legal conclusions drawn by the Arbitrator in his order dated 5.2.1999,
while disposing of the disputes raised by Pratima Chowdhury. Accordingly
we are summarizing the same hereunder:-
(i) In respect of the letter dated 11.11.1992, the Arbitrator observed
that the same was drafted by Partha Mukherjee. This inference came to be
drawn from the manuscript of the original. The Arbitrator pointed out that
the letter dated 11.11.1992, disclosed that the transaction was not based
on passing of monetary consideration, whereas, Kalpana Mukherjee had
expressly asserted in her defence, that the transaction was executed on an
agreed consideration of Rs. 4,29,000/-. Kalpana Mukherjee had also
affirmed, that the aforesaid consideration had passed from the transferee
to the transferor by transfer of shares of Partha Mukherjee, to the name of
Pratima Chowdhury. The Arbitrator relying on the contents of the letter
dated 11.11.1992, recorded that the letter itself mentioned that the
details disclosed therein, were meant purely to comply with the rules and
to avoid future complications. The Arbitrator felt, that if Pratima
Chowdhury had the intention to sell the flat, she would have mentioned the
same in her letter dated 11.11.1992. It was also observed by the
Arbitrator, that there was no justification for not mentioning the monetary
consideration in the said letter. On the instant aspect of the matter the
Arbitrator was of the view, that the disclosure of the above consideration
would have clearly avoided future complications (which seem to be the
intention for writing the letter dated 11.11.1992). The Arbitrator also
pointed out, that the letter dated 11.11.1992 could not be treated as a
letter of resignation of the petitioner Pratima Chowdhury from the Society.
In this behalf it was noticed, that the word “resignation” was completely
absent from the text of the letter dated 11.11.1992.
(ii) In respect of letter dated 13.11.1992 the Arbitrator pointed out,
that the same was notarized by S.N. Chatterjee, Advocate, who was the son-
in-law of the sister of Kalpana Mukherjee (defendant No. 1, before the
Arbitrator). Although, the above notary stated that the letter dated
13.11.1992 was signed by all the parties concerned before him at Calcutta,
he acknowledged, that he did not issue any notarian certificate in terms of
Section 8 of the Notary Act. According to the Arbitrator, Pratima
Chowdhury and all the witnesses appearing for her, had unequivocally and
categorically affirmed, that she (Pratima Chowdhury) was in Bombay on
11.11.1992, as also, on 13.11.1992. Therefore, according to the
Arbitrator, the question of her appearing before the notary at Calcutta on
13.11.1992, did not arise at all. According to the Arbitrator, the
registration number of the Society had not been mentioned in the document
dated 13.11.1992, this according to the Arbitrator, made the document
suspicious because Anil Kumar Sil, the Secretary of the Society, had
mentioned that the above document dated 13.11.1992 was executed at his
residence. If the above factual position was correct, according to the
Arbitrator, the registration number would have been supplied by the
Secretary of the Society, and would have been mentioned in the document
itself. Furthermore, according to the Arbitrator, the document dated
13.11.1992 was in the nature of deed of transfer, but such transfer would
materialize after (and not before) the consent of the Board of Directors of
the Society, and the approval of the Deputy Registrar, Co-operative
Societies. As per the Arbitrator, even the first step towards transfer of
flat no. 5D had not commenced on 13.11.1992, and therefore, the question of
allotment and handing over the possession of the flat to the nominee
Kalpana Mukherjee, in accordance with the terms and conditions of the
allotment and bye-laws of the Society did not arise either in law or in
fact, as has been wrongly stated in the said document dated 13.11.1992. As
per the Arbitrator even the document dated 13.11.1992 was silent on the
consideration for such transfer, despite Kalpana Mukherjee expressing that
the above transfer was for a sale consideration of Rs. 4,29,000/-.
According to the Arbitrator, the possession of Kalpana Mukherjee, was
through Partha Mukherjee, because of the lease and license agreement
between Pratima Chowdhury and Colgate Palmolive (India) Limited (which
commenced on 1.4.1992 and was terminated on 19.10.1993), and not on the
basis of the document dated 13.11.1992. The Arbitrator also pointed out,
that Kalpana Mukherjee had deposited rent in the account of Pratima
Chowdhury on 21.10.1993, describing it as rent payable to Pratima
Chowdhury. The Arbitrator further observed that Pratha Mukherjee in his
letter dated 28.10.1993 mentioned Pratima Chowdhury as the landlady of flat
no. 5D. Based on the above two instances of 21.10.1993 and 28.10.1993, the
Arbitrator was of the view, that the assertion of transfer of flat no. 5D
by Pratima Chowdhury to Kalpana Mukherjee stood clearly annihilated.
(iii) On the issue of the consideration money, the Arbitrator noted, that
Kalpana Mukherjee had stated in her defence, that the parties had orally
settled the passing of consideration in lieu of flat no. 5D, at
Rs.4,29,000/-. It was also her contention, that the parties had settled
that the above agreed consideration would be paid by Partha Mukherjee to
Pratima Chowdhury by transferring his shares in different companies to the
name of Pratima Chowdhury. But Pratima Chowdhury categorically denied the
passing of any consideration, as she had no intention to sell the property.
She also asserted, that the shares shown to have been transferred from the
name of Partha Mukherjee to the name of Pratima Chowdhury, were acquired by
Partha Mukherjee long after November, 1992 (when the letters dated
11.11.1992 and 13.11.1992 were issued) i.e. from August, 1993 to April,
1994. The details of the transfer of shares was disclosed in the award
passed by the Arbitrator as under:-
“COMPANY’S NAME NO. OF SHARES ACQUIRED
Tata Chemicals Ltd. 50 nos. 8.9.93
Tata Chemicals Ltd. 450 nos. 27.10.93
Siemens 50 nos. 2.8.93
Indian Aluminium 500 nos. 4.3.94
I.T.C. Hotels 100 nos. acquired with
Mr. H.P. Roy
4.4.94”
The above shares were acquired by Partha Mukherjee jointly, either with his
wife or with his father-in-law, long after the material point of time.
Pratima Chowdhury’s assertion before the Arbitrator, questioning
truthfulness of the assertion of Kalpana Mukherjee, was also based on the
fact that, Kalpana Mukherjee (or Partha Mukherjee) could not have agreed to
transfer to Pratima Chowdhury, what they did not themselves hold when the
transaction was allegedly executed. In order to falsify the contention of
Kalpana Mukherjee (and Partha Mukherjee) that consideration was paid to
Pratima Chowdhury by transfer of shares as noticed above, it was stated
that after Partha Mukherjee was transferred from Calcutta to Bombay in the
year 1993, he did not continue with his employment with Colgate Palmolive
(India) Limited, as he wanted to start a business of aluminium products
with one R.K. Sen in Bombay. Keeping in view the above objective, Partha
Mukherjee took a loan of Rs. 2 lakhs from Pratima Chowdhury. The above
loan was extended by Pratima Chowdhury by way of cheques drawn in favour of
Bharat Aluminium Company Limited for supply of raw materials for Partha
Mukherjee’s business. It was further contended that Partha Mukherjee
similarly took a loan of Rs. 2 lakhs from his own wife Sova Mukherjee which
was repaid by Partha Mukherjee through cheques (bearing nos. 021865, 021866
and 021867) drawn on the Bank of Baroda. It was further pointed that
Partha Mukherjee had similarly taken a loan for a sum of Rs.1.5 lakhs for
the same purpose from Bani Roy (his mother-in-law) which he had still not
repaid. It was pointed out, that at the asking of H.P. Roy (his own father-
in-law, father of Sova Mukherjee) Partha Mukherjee had transferred share
certificates standing in his name, and in the name of his wife Sova
Mukherjee, to the name of Pratima Chowdhury, towards repayment of the
abovementioned loans. Accordingly, the case of Pratima Chowdhury was, that
transfer of shares by Partha Mukherjee to the name of Pratima Chowdhury,
was for a completely different transaction, and had nothing to do with the
allowing of the usage and occupation of the flat, by Kalpana Mukherjee and
Partha Mukherjee.
(iv) On the lease and license agreement the Arbitrator noticed, that
Partha Mukherjee (son of Kalpana Mukherjee), and son-in-law of Pratima
Chowdhury’s sister Bani Roy, was allowed to reside in flat no. 5D,
consequent upon his transfer from Bombay to Calcutta (while in the
employment of Colgate Palmolive (India) Limited). It was also noticed,
that the lease and license agreement, was executed by Colgate Palmolive
(India) Limited, at the instance of Partha Mukherjee, for a monetary
consideration of Rs. 5,000/- per month, as rent payable to Pratima
Chowdhury. To deposit the above consideration Partha Mukherjee opened a
joint account in the names of Pratima Chowdhury and himself. The
Arbitrator noted, that when Partha Mukherjee drafted the letter dated
11.11.1992, he utterly neglected to mention the subsisting lease and
license agreement between Colgate Palmolive (India) Limited and Pratima
Chowdhury. The Arbitrator also noticed, that Kalpana Mukherjee did not
inform Colgate Palmolive (India) Limited that flat no. 5D had been
transferred from the name of Pratima Chowdhury to her name. On the
contrary the Arbitrator pointed out, that Kalpana Mukherjee on 21.10.1993,
deposited rent in the account of Pratima Chowdhury, by filing the bank
deposit slips. Furthermore, the Arbitrator noticed, that Partha Mukherjee
in his letter dated 28.10.1993 mentioned, that Pratima Chowdhury as the
landlady of flat no. 5D. According to the Arbitrator, the above factual
position clearly indicates, that Kalpana Mukherjee along with her son
Partha Mukherjee were aware, that flat no. 5D belonged to the petitioner,
even on 21/28.10.1993. Whereas, they wrongly depicted the transfer thereof
from the name of Pratima Chowdhury to the name of Kalpana Mukherjee through
letter dated 11.11.1992 and 13.11.1992. Since the lease and license
agreement between Colgate Palmolive (India) Limited and Pratima Chowdhury
continued from 1.4.1992 to 19.10.1993, there was no question of handing
over of possession thereof by Pratima Chowdhury to Kalpana Mukherjee.
(v) On the submissions advanced on behalf of Pratima Chowdhury in respect
of one covered garage space on the premises of the Society is concerned,
the Arbitrator concluded from the documents submitted by Kalpana Mukherjee,
that Pratima Chowdhury had one covered garage space also. The said covered
garage space was not mentioned in the document dated 13.11.1992.
Thereafter, based on an agreement executed between Kalpana Mukherjee on the
one hand and the Society on the other, the said garage space was also
transferred to the name of Kalpana Mukherjee on 25.4.1995. According to
the Arbitrator, the instant agreement dated 25.4.1995, had no validity as
the same was neither mentioned in the letter dated 11.11.1992, nor in the
document dated 13.11.1992. And therefore cannot be considered as having
the approval of Pratima Chowdhury. Accordingly, the Arbitrator expressed
the view that the covered garage space must be deemed to have never been
transferred by Pratima Chowdhury to Kalpana Mukherjee. The Arbitrator also
concluded, that the agreement dated 25.4.1995 could not have been executed
in the absence of Pratima Chowdhury. Based on the above factual position
Pratima Chowdhury had also alleged connivance between Kalpana Mukherjee and
the Society, so as to deprive Pratima Chowdhury of her property.
(vi) Besides the above factual conclusions drawn by the Arbitrator, the
Arbitrator had also concluded that the Society violated various provisions
of the West Bengal Co-operative Societies Act, 1983, and the rules framed
thereunder, as also the bye-laws of the Society. The Arbitrator summarized
the conclusions drawn on the legal issues as under:-
“Keeping in view of the all above, I am of the opinion that the
transfer of the flat no. 5D of the Defendant No. 2 Society was
not done in accordance with laws including West Bengal Co-
Operative Socities Act, Rules, Indian Contract Act, Transfer of
Property Act due to reason at a glance.
1) Section 85(9), Section 70, Section 69 of West Bengal Co-
Operative Socities Act 1983 have been flouted.
2) Rule 127(1), Rule 135(3)(a), Rule 142(1) have been
flouted.
3) Bye-laws have been contradicted.
4) No consideration money was paid by the Defendant no. 1 to
the Plaintiff.
5) Societies accepted the resignation of the Plaintiff on
14.2.93 which she had not tendered, if that be so, the
society did not act as per Rule 143 also.
6) The flat in dispute was under the lease and license
agreement at the material time since bank account in this
respect was operated by the son of the Defendant no. 1 who
also deposited cheque on Plaintiff’s behalf.
7) The instant dispute case is not barred by limitation.
8) The transaction of 13.11.92 does not attract the doctrine
of estoppel.”
21. Based on the abovementioned conclusions drawn by the Arbitrator on
the factual and legal issues canvassed by the rival parties. The
Arbitrator passed the following award:
“AWARD
Keeping in view of the above, based on documents, assessing all
the pros and cons, on the basis of equity, justice and good
conscience, I pass the following ‘AWARD’:
a) The agreement dt. 13.11.92 between the Plaintiff and
Defendant no. 1 is invalid, void and incomplete and
b) The relevant resolution dt. 14.2.93 (Agenda no. 1) of the
Managing Committee of the Defendant no. 2 is quashed and;
c) The Defendant no. 2 is directed to ensure and conform that
the plaintiff gets the possession of flat no. 5D with
garage space with immediate effect and issue share
certificate in her name immediately and
d) Any other action if any taken by any authority on and
after 13.11.92 affecting the membership of the Plaintiff in
any manner whatever is also quashed.
The above Judgment and Award have been given on
Pronouncement before the parties present.”
22. Dissatisfied with the award rendered by the Tribunal on 5.2.1999,
Kalpana Mukherjee preferred an appeal bearing no. 14 of 1999 before the
West Bengal Co-operative Tribunal (hereinafter referred to as the Co-
operative Tribunal). The Society (defendant no. 2, before the Arbitrator)
preferred a separate appeal bearing no. 29 of 1999, to assail the award of
the Arbitrator dated 5.2.1999. While dwelling upon the controversy between
the parties, the Co-operative Tribunal considered it appropriate to
highlight the social relationship and affinity between the parties.
According to the Cooperative Tribunal, the relationship between the parties
had an essential bearing, to an effective determination of the controversy.
Insofar as the instant aspect of the matter is concerned, rather than re-
narrating the position taken into consideration, we consider it more
appropriate to extract hereunder the narration recorded by the Co-operative
Tribunal itself. The same is accordingly reproduced hereunder:-
“For proper appreciate of evidence it is proper to introduce the
parties. P.W. Chowdhury, the respondent no. 1 in both the appeals is
a spinster and now aged 50+. She is a graduate. She studies in
Calcutta and other places. She is an exponent to Bharat Natyam and
performs dance at many places of India. For a pretty long time she
has been residing at Bombay. Smt. Bani Roy is her sister. B. Roy’s
husband Mr. H.P. Roy is a wealthy person in Bombay. P. Chowdhury has
been living in the family of Mr. H.P. Roy since the put up herself in
Bombay. Partha Mukherjee is the son-in-law of H.P. Roy. K. Mukherjee
who is the appellant in appeal no. 14/1999 is the mother of Partha
Mukherjee. K. Mukherjee retired from service in the National Library,
Calcutta in 1994. While in service, she would stay in the Govt.
accommodation at Balvediare Road, Alipur. Partha Mukherjee, Son of K.
Mukherjee is an Engineer from I.I.T., Kharagpur and obtained M.B.A.
from Ahmedabad and at the material time worked as Sales
Manager/Regional Manager of Colgate Palmolive Ltd. in Bombay, Calcutta
and other places. Partha Mukheree married Sova Mukherjee, who was the
daughter of H.P. Roy of Bombay. P. Chowdhury, her sister Bani, H.P.
Roy, Partha and Sova, all lived together for a prolonged period of
time in the house of H.P. Roy at Bombay. Partha married Sova
sometimes in 1987 and little after marriage, he and Sova started
living in the house of H.P. Roy. Evidence has it to say that the
relationship of Pratima with Sova Rinki is, as Pratima herself says,
“like my daughter”. Similarly, the evidence of Pratima runs that
after marriage, her relationship with Partha was “like my son”. In
1992, Partha worked for Palmolive Co. Ltd. in Bombay and while working
there he, as we have earlier observed, would stay in the house of H.P.
Roy. In January, 1992, Pratima was allotted a flat being no. 5B at
48E, Gariahat Road, Calcutta-19 belonging to the society. The said
flat was originally allotted to Smt. Indrani Bhattacharya and the said
Smt. Indrani Bhattacharya having transferred the flat to Smt. P.
Chowdhury, the latter came to be an allottee of that flat, but P.
Chowdhury did not reside there at all. In March/April, 1992, Partha
was transferred from Bombay to Calcutta and needed an accommodation.
Colgate Palmolive Co. Ltd., was required to arrange accommodation for
its officers. As Pratima and Partha became very closer and Pratima
treated Partha like her son, Partha put up himself in the flat of
Pratima in April, 1992 and it was the Colgate Palmolive Co. Ltd.,
which by virtue of an agreement for license with Pratima used to pay
Rs.5000/- per month as rent to Pratima. These are all facts admitted.
We see that the relationship amongst Pratima, Partha and Kalpana grew
very closer because of Partha marrying the daughter of the sister of
Pratima. This background has to be borne in mind while appreciating
the evidence on record.”
Having traced the relationship between the parties, as has been recorded
hereinabove, the Co-operative Tribunal was of the view, that the entire
approach of the Arbitrator was erroneous, as the Arbitrator had treated
Pratima Chowdhury as a pardanashin lady. The above inference, drawn by the
Co-operative Tribunal, is also being extracted hereunder:-
“The entire approach of the Ld. Arbitrator seemed to have gone into
the fashion as if the respondent no. 1 P. Chowdhury was a pardanasin
lady, that she was unaware of the documents she was executing that it
was Partha who managed to get all the documents executed by Pratima so
as to obtain transfer of the flat in the name of his mother Kalpana
Mukherjee. Let it be recorded here at the outset that P. Chowdhury,
having regard to her status, education and wealth cannot be allowed to
take the benefit of what a pardanasin woman is entitled to on two-fold
grounds; firstly, she is highly education (illegible) and a literate
woman and secondly, the pleading of Pratima Chowdhury as we get from
plaint does not make out such a case. ”
Just in the manner in which we have recorded the conclusions drawn by the
Co-operative Arbitrator, highlighting each individual aspect taken into
consideration, we will also endeavour to similarly summarize the
conclusions drawn by the Co-operative Tribunal on different aspects of the
matter.
The above conclusions are being recorded hereunder:-
i) The Co-operative Tribunal was of the view, that the determination
rendered by the Arbitrator was erroneous on account of the fact that
the Arbitrator did not take into consideration a letter of vital
importance to the controversy. In this behalf, the Co-operative
Tribunal examined the letter dated 29.6.1992, which Pratima Chowdhury
had written to the Society, wherein she had indicated that due to her
indifferent health, she was not in a position to visit Calcutta in the
immediate future. She accordingly requested the Society to transfer
her flat to “my nominee Kalpana Mukherjee, a close relative of mine”.
In the above letter Pratima Chowdhury had also stated, that Kalpana
Mukherjee was already occupying the flat, and was staying in it with
her son (Partha Mukheree), and her daughter-in-law (Sova Mukherjee).
She accordingly requested the Society, that for the maintenance of the
flat, charges payable should be recovered from the residents of the
flat. It would be relevant to mention, that Pratima Chowdhury had
accepted having written the above letter (in the rejoinder filed by
her before the Arbitrator). Despite the above Pratima Chowdhury had
explained, that the letter dated 29.6.1992 had been signed by her at
the instance of Partha Mukherjee. According to the Co-operative
Tribunal, the above letter dated 29.6.1992 written by Pratima
Chowdhury on her letterhead from Bombay, demolished the entire case
set up by her. Primarily on the basis of the said letter dated
29.6.1992 the Co-operative Tribunal concluded, that the factual
inferences recorded by the Arbitrator without reference to the above
letter, were not justified. It came to be expressly concluded by the
Co-operative Tribunal, that motives attributed to Partha Mukherjee
were clearly unjustified.
ii) According to the Co-operative Tribunal, after having written the above
letter dated 29.6.1992, Pratima Chowdhury wrote two other letters
dated 11.11.1992 and 13.11.1992. On the basis of the above letters,
flat no. 5D was transferred by the Society, to the name of Kalpana
Mukherjee, consequent upon the approval of the Deputy Registrar, Co-
operative Societies. In the opinion of the Co-operative Tribunal,
Pratima Chowdhury did not assail the action of the Society in
transferring flat no. 5D to Kalpana Mukherjee till February, 1995.
According to the Co-operative Tribunal, the challenge to the transfer
of the above flat in the name of Kalpana Mukherjee, was raised only
after a marital discord had developed between Partha Mukherjee and his
wife Sova Mukherjee. On account of the above discord, Partha Mukhrjee
left the company of the family of his father-in-law (H.P. Roy). It
was only thereupon, that Pratima Chowdhury assailed the transfer of
the flat (from her name, to the name of Kalpana Mukherjee). According
to the Co-operative Tribunal, the Arbitrator overlooked the above
extremely relevant factual position and accordingly erred in drawing
his conclusions.
iii) Insofar as the document dated 13.11.1992 is concerned, the Co-
operative Tribunal having examined it, recorded that the same was
executed by Pratima Chowdhury and Kalpana Mukherjee (both as
executants), which was attested by H.P. Roy (father-in-law of Partha
Mukherjee) and which was also sworn before a notary. The Co-operative
Tribunal also observed, that the aforesaid document had been executed
on a non-judicial stamp paper of Rs.40/-. The above document in its
text recorded, that Pratima Chowdhury had transferred the possession,
right, title and interest of flat no. 5D in favour of Kalpana
Mukherjee (the nominee/transferee). The reason for the aforesaid
transfer was indicated in document dated 29.6.1992. It was mentioned,
that on account of her (Pratima Chowdhury’s) indifferent health and on
account of having decided to permanently settle in Bombay, she had
agreed to transfer the flat no. 5D in favour of Kalpana Mukherjee. It
was also duly recorded in the above document, that possession of flat
no. 5D had already been handed over to Kalpana Mukhrjee. It was also
pointed out, that Kalpana Mukherjee had already applied for membership
of the Society, whereafter, she would be entitled to all rights and
privileges over flat no. 5D in terms of the bye-laws of the Society.
According to the Co-operative Tribunal, Pratima Chowdhury did not deny
execution of document dated 13.11.1992. As per the Co-operative
Tribunal, the submission of Pratima Chowdhury about having signed a
blank paper, on which Partha Mukherjee had executed the document dated
13.11.1992, was not acceptable. The Co-operative Tribunal was of the
view, that Pratima Chowdhury having admitted her signatures on the
document dated 13.11.1992, it was not open to her to deny the
execution thereof. For the same reason, the Co-operative Tribunal
rejected the contention advanced on behalf of Pratima Chowdhury, that
she had never appeared before the notary at Calcutta because she had
never gone to Calcutta during the period when the documents dated
11.11.1992 and 13.11.1992 were executed. The Co-operative Tribunal
felt compelled to record the aforesaid conclusion in the following
words: “Regardless of whether the document called agreement dated
13.11.1992 is legal or not, the fact remains that the document was
executed by the transferor and the transferee, and it could not be
denied that long before the agreement was executed, possession of the
flat was delivered way back in March, 1992.”. Therefore, all the
findings recorded by the Arbitrator in respect of the document dated
13.11.1992 were not accepted for the above reasons.
iv) While dealing with the documents dated 29.6.1992, 11.11.1992 and
13.11.1992, the Co-operative Tribunal expressed disbelief at the
determination of the Arbitrator to the effect, that Pratima Chowdhury
had no intention to transfer her membership and her flat bearing no.
5D to Kalpana Mukherjee. According to the Co-operative Tribunal, the
question whether monetary consideration passed from Kalpana Mukherjee
to Pratima Chowdhury or not, was a different issue, however, the
letters dated 29.6.1992, 11.11.1992 and 13.11.1992 clearly expressed
the intention of Pratima Chowdhury to transfer flat no. 5D in favour
of her nominee Kalpana Mukherjee. The Co-operative Tribunal was also
of the view, that the Arbitrator was unjustified in observing, that
the above letters were drafted by Partha Mukherjee, or that, Partha
Mukheree prevailed over Kalpana Mukherjee to execute the above
letters. According to the Co-operative Tribunal, neither the evidence
available on the records of the case, nor the circumstances of the
case justified any such inference.
v) While dealing with the issue of consideration, which had passed from
Kalpana Mukherjee to Pratima Chowdhury on account of transfer of flat
no. 5D, the Co-operative Tribunal expressed, that the Arbitrator
appeared to have been of the view that since in the letter dated
11.11.1992 it was stated, that no monetary transaction was involved,
there could be no sale, and consequently, when there was no sale,
there could be no transfer. The Co-operative Tribunal expressed the
view, that sale was not the only mode of transfer. Relying on the
letter dated 11.11.1992 the Co-operative Tribunal felt, that it could
not be conclusively held, that Pratima Chowdhury had no intention to
transfer flat no. 5D in the name of Kalpana Mukherjee. In fact,
according to the Co-operative Tribunal, the issue of passing of
consideration and the issue of transfer of the property were two
independent issues. The said issues, according to the Tribunal, had
to be determined as per the totality of the circumstances of the case.
On the instant aspect of the matter the Co-operative Tribunal
expressed the view, that the rival parties were tied up by a
matrimonial relationship, inasmuch as, the niece (Sova Mukherjee) of
Pratima Chowdhury was the cementing factor, of their relationship.
Accordingly, whether or not consideration had passed between the
parties, could not be considered as a decisive factor. In fact, the
Co-operative Tribunal was pleased to further conclude, “Even assuming
for the sake of argument that no monetary transaction was involved,
the factum of transfer is not abrogated thereby”. According to the Co-
operative Tribunal, the provisions of the West Bengal Co-operative
Societies Act, and the Rules framed thereunder, do not mandate, that
transfer could only be made by way of sale. Keeping in view the
closeness of the relationship, which is existed between the parties,
according to the Co-operative Tribunal, the issue of paramount
importance was not the receipt of monetary consideration, the issue of
paramount importance was only “… to accommodate the plaintiff’s niece
Sova and her husband Partha, that was uppermost in the mind of the
plaintiff…” Referring to the facts of the present case, the Co-
operative Tribunal held, that consistent with the case of Pratima
Chowdhury based on an oral agreement, Partha Mukherjee transferred
shares of different companies “… worth Rs.4,29,000/- in favour of the
plaintiff on 6.12.1994 by way of consideration of the apartment…”. It
is necessary to notice the observations made by the Co-operative
Tribunal on the instant aspect of the matter. The same are
accordingly reproduced in the words of the Co-operative Tribunal: “One
may not believe the reality of oral agreement so as to determine the
price and of payment thereto by transfer of shares of different
companies in favour of the respondent no. 1. But if it appears from
the documents which show that in the latter part of the year 1994,
shares worth Rs.4,29,000/- were transferred in favour of P. Chowdhury
and if no convincing evidence is forthcoming as to payment of that
money for different purpose or for different reason then one is to
believe the passing of consideration price, and the passing of
consideration price when proved would virtually prove the alleged oral
agreement to that effect.”
vi) The Co-operative Tribunal also examined the rival contentions of the
parties in respect of the place where the documents in question were
executed. It was pointed out, that the evidence produced by Pratima
Chowdhury to the effect, that she had signed the documents in Bombay,
could not be accepted. Likewise, according to the Co-operative
Tribunal, the witnesses produced by Pratima Chowdhury on the above
issue, were not reliable. According to the Co-operative Tribunal,
when the notary who was an Advocate stated on oath, that the documents
were executed in Calcutta before him, it was not possible to give
credence to the statement of Pratima Chowdhury or the witnesses
produced by her. According to the Co-operative Tribunal, it needed to
be kept in mind even, insofar as the instant aspect of the matter was
concerned, that Pratima Chowdhary had raised a dispute in respect of
the transfer of flat no. 5D only after a marital discord had developed
between Partha Mukherjee and Sova Mukherjee.
vii) According to the Co-operative Tribunal “the question as to why Kalpana
Mukherjee was not made a nominee in January, 1992 when she was put in
possession of the flat, lies in the fact that since 1987, Kalpana
Mukherjee’s son Partha Mukherjee had been residing in Bombay with his
father in law H.P. Roy and Pratima Chowdhury. According to the Co-
operative Tribunal, the Arbitrator recorded a useless reasoning, that
the nomination in favour of Kalpana Mukherjee was not acceptable.
Referring to Sections 79 and 80 of the West Bengal Co-Operative
Societies Act, the Co-operative Tribunal expressed the view, that it
was not compulsory that transfer of nomination could only be in favour
of a member of the family of the person making the nomination.
According to the Co-operative Tribunal, the letters/documents dated
29.6.1992, 11.11.1992 and 13.11.1992 were sufficient proof of the
nomination by Pratima Chowdhury in favour of Kalpana Mukherjee. It
was also pointed out, that the Society had accepted the above
nomination, which was approved by the Deputy Registrar, Co-Operative
Societies. It was accordingly concluded by the Co-operative Tribunal,
that in such a situation, no separate letter giving consent to the
transfer was required.
viii) Another interesting aspect of the matter dealt with by the Co-
operative Tribunal was based on the principle of estoppel. Rather
than expressing the observations and conclusions drawn by the Co-
operative Tribunal in our words, we consider it just and appropriate
to narrate the findings recorded by the Co-operative Tribunal by
extracting its observations. The same are accordingly reproduced
hereunder:-
“Section 115 of the Evidence Act provides that “when one person has by
his declaration act or commission, intentionally causes or permits
another person to believe a thing to be true and to act upon such
belief, neither he nor his representative shall be allowed in the suit
or proceeding between herself and such person or his representative
shall be allowed in the suit or proceeding between herself and such
person or his representation, to deny the truth of that thing”. The
following facts are very much present to invoke the doctrine.
a) Fraud, undue influence (illegible) and misrepresentation
has not been proved;
b) (illegible)
c) (Illegible)
d) Partha was in need of accommodation in Calcutta;
e) Long before transfer Kalpana was already made a nominee in
respect of the flat in question;
f) Unquestionably two letters dated 19.6.1992 and 13.11.1992
are there addressed by Pratima to the society clearly
asking for transfer of the flat in favour of Kalpana;
g) Possession was delivered pursuant to those letters and
agreement dated 13.11.1992;
h) Lease and license agreement with Colgate Palmolive Ltd.,
legally cannot destroy the factum of transfer;
i) Partha and Kalpana are led to believe about the completion
of transfer;
j) Under the law it (illegible) required to be executed and
registered under the T.P. Act and the I.R. Act;
k) Pratima writes to CESC to henceforth collect all charges
from Kalpana;
l) Pratima slept a slumber after the signing of the agreement
dated 13.11.1992 till April, 1993.
These facts are to our mind sufficient to invoke the doctrine of
estoppel. When society acted upon letters of the plaintiff/respondent
no. 1 and transfer was effected, the respondent no. 1 is estopped from
challenging her stand.”
ix) It was argued before the Co-operative Tribunal, that when the lease
and license agreement came to an end, Partha Mukherjee wrote a letter
to Colgate Palmolive India Limited informing it of the termination of
the lease and license agreement by asserting, that “Landlady refunded
back the security deposit of Rs.60,000/-“. Factually, Partha
Mukherjee had deposited the above amount of Rs.60,000/-, in the
Calcutta office of Colgate Palmolive (India) Limited. It was argued
before the Co-operative Tribunal, that the use of the expression
“landlady” by Partha Mukherjee, was indicative of the fact that the
transfer of flat no. 5D had actually not taken place. According to
the Co-operative Tribunal, the aforesaid argument was not acceptable
because in the eyes of Colgate Palmolive (India) Limited, Pratima
Chowdhury was a landlady and accordingly it was not required that
Partha Mukherjee should inform Colgate Palmolive (India) Limited, that
Pratima Chowdhury had transferred flat no. 5D to the name of his
mother Kalpana Mukherjee.
Based on the aforesaid findings recorded by the Co-operative Tribunal, both
the appeals were allowed. The impugned award passed by the Tribunal dated
5.2.1999 in Dispute Case No. 29/RCS of 1995-96 was set aside. Accordingly,
the dispute raised by Pratima Chowdhury was dismissed.
23. Dissatisfied with the common order passed by the Co-operative
Tribunal dated 16.5.2002, vide which Appeal nos. 14 of 1999 and 29 of 1999
were disposed of, the petitioner invoked the civil revisional jurisdiction
of the High Court at Calcutta (hereinafter referred to as, the High Court).
During the course of deliberations before the High Court, Pratima
Chowdhury assailed the findings recorded by the Co-operative Tribunal on
various aspects of the matter. The High Court in its deliberations traced
the sequence of facts in the background of the facts as were examined by
the Arbitrator, as also, the Co-operative Tribunal. No new facts were
taken into consideration. The High Court adjudicated upon the matter vide
an order dated 14.2.2006, whereby Civil Order nos. 3039 and 3040 of 2002
were jointly disposed of. The different perspectives and angles within the
framework of which the High Court examined the controversy, are being
briefly narrated hereunder:-
(i) The High Court excluded various facts taken into consideration by the
Arbitrator. For excluding certain facts from consideration, the view of
the High Court was, that the factual position introduced by Pratima
Chowdhury by filing a rejoinder before the Arbitrator, could not be taken
into consideration. The consideration of the High Court was recorded in
the impugned order dated 14.2.2006, as under:-
“After service of copy of the written statement, the plaintiff before
the learned Arbitrator filed a rejoinder thereby attempting to
introduce certain facts. But the learned Tribunal observed that there
could be no scope for filing of such rejoinder either under the Code
of Civil Procedure or under the West Bengal Co-Operative Societies
Rules.”
In fact, on the instant aspect of the matter the High Court, adopted as
correct the following observations recorded in the order passed by the Co-
operative Tribunal:-
“It has to be clearly stated that under no provision of law the
plaintiff can be allowed to submit a rejoinder to the written
statement of the defendant and the facts introduced in the rejoinder
were illegally taken note of by the Ld. Arbitrator and whatever
evidence she introduced to translate that rejoinder cannot be legally
accepted.”
(ii) The High Court was of the view, that the stance adopted by Pratima
Chowdhury was impermissible under the principle of justice and equity, the
doctrine of fairness, as also, the doctrine of estoppel. This aspect of
the matter came to be examined in the following manner:-
“After due consideration of all relevant facts and materials it
appears that there could be very little scope for the society to
recall its stand just because after about three years, Pratima
Chwodhury decided otherwise. In fact resolution of the dated
14.2.1993 was forwarded to the Deputy Registrar, Co-operative
Societies with recommendation for transfer of flat and shares in
favour of Kalpana Mukherjee as far back as on 10.3.1993. It appears
that the Deputy Registrar, Co-operative Societies, asked for certain
document on 26.7.1993, which were submitted by the society on
22.9.1993. Thereafter, membership of Kalpana Mukherjee in place of
Pratima Chowdhury was approved. Thus, backing out by Pratima
Chowdhury after about three years of her own consistent request for
transfer in favour of Kalpana Mukherjee and her request to C.E.S.C. to
transfer electric meter, cannot have any support in the eyes of law.
Pratima Chowdhury also did not bother to intimate Kalpana Mukherjee
while requesting the society for necessary action in view of her
change of mind. This is against the doctrine of fairness. Lord
Dening in his book, The Discipline of Law, 7th Reprint, page 223,
observed:
“It is a principle of justice and of equality. It comes to
this, when a man by his words or conduct has led another to
believe that he may safely act on the faith of them – and the
other does act on when it would be unjust or inequitable for him
to do so.”
In the words of Dixon, J.:-
“The principle upon which estoppel in pais is founded is that the law
should not permit an unjust departure by a party from an assumption of
fact which he has caused another party to adopt or accept for the
purpose of their legal relations.”
The said principle was further stretched to the following extent:-
“At any rate, it applies to an assumption of ownership or absence of
ownership. This gives rise to what may be called proprietary
estoppel. There are many cases where he is not the owner, or, at any
rate, is not claiming an interest therein, or that there is no
objection to what the other is doing. In such cases, it has been held
repeatedly that the owner is not to be allowed to go back on what he
has led the other to believe. So much so that his own title to the
property, be it land or goods, has been held to limited or
extinguished, and new rights and interest have been created therein.
And this operates by reason of his conduct what he was led the other
to believe even though he never intended it.”
It may be said that even in absence of actual promise, if a
person by his words or conduct, so behaves as to lead another to
believe that he will not insist on his strict legal rights, knowing or
intending that the other will act on that belief and he does so act,
that again will raise an equity in favour of the other, and it is for
a court to equity to say in what way the equity may be satisfied. An
equity does not necessarily depend on agreement but on words or
conduct. The Privy Council in V. Wellington Corporation observed that
the Court must look at the circumstances in each case to decide in
what way the equity can be satisfied.”
(iii) The High Court expressly approved the manner in which the controversy
had been examined by the Co-operative Tribunal, by taking into
consideration the past relationship between the parties, and the souring of
the relationship between the two spouses, i.e., Partha Mukherjee and Sova
Mukherjee. Having examined the dispute in the aforesaid prospective, the
High Court observed as under:-
“On behalf of the petitioner it was also submitted that the learned
Tribunal failed to appreciate the findings of the learned Arbitrator
arrived at after proper appreciation of the evidence in the said
proceeding. The learned Tribunal seem to be in agreement with the
view that the document dated 13.11.1992 cannot be called as a proper
and complete document of transfer. The learned Tribunal, thereafter
explored as to whether such a document is at all necessary for
effecting transfer of an apartment by a member to another person.
Relying upon the letters dated 29.6.1992 and 11.11.1992 and quite
rightly, without attempting to read more than what meets the eyes, the
learned Tribunal held that Pratima Chowdhury by such letters,
expressed her desire to transfer the flat in favour of her nominee
Kalpana Mukherjee. This was quite relevant in the context of
relationship between two families arising out of the marital tie. It
cannot be said that the learned Tribunal was not at all justified in
observing that in the backdrop of the present case, payment of
consideration could not be the decisive factor.”
(iv) On the subject of passing of consideration, the High Court
principally accepted the view propounded by the Co-operative Tribunal. The
High Court made the following observations on the issue of consideration:-
“The learned Tribunal appears to have considered the aspect relating
to transfer of flat in proper perspective. Nothing could be placed
before this Court so as to justify brushing aside of the observation
of the learned Tribunal that “neither the Act nor the rule rules out
transfer by gift or will. But the Rule does not provide the manner of
transfer, nor does it mandate that transfer has to be effected by any
of the modes necessary as provided for in the Transfer of Property
Act. The transferee has to be an allottee or a re-allottee.”
On perusal of the impugned judgment, it is found that the
learned Tribunal referring to Rule 201(3) of the West Bengal Co-
operative Societies Rule, 1974 and relevant Rule of 1987 observed that
the question of payment of consideration money is primarily and purely
a matter between the transferor and the transferee. It was held that
“deletion of the Rule 201 (3) from the present Rule of 1987 clearly
fortifies the position of the society which effected transfer on the
repeated request of the respondent no. 1 in full compliance with the
provisions of the Act and the Rules. This being so, for a transferee
to hold possession is required the certificate of allotment, not a
deed of conveyance from the transferor”.”
Significantly enough the learned Tribunal mentioned about the
manner in which Pratima Chowdhury got the flat from the original
member, Smt. Indrani Bhattacharya and wondered as to how then there
could be any grievance in regard to the transfer by the said Pratima
Chowdhury in favour of Kalpalan Mukherjee. The story of giving money
to Partha Mukherjee by way of loan could not be established to the
satisfaction of the judicial conscience of the learned Tribunal and
for reasons as mentioned in the impugned judgment, the learned
Tribunal did not choose to brush aside the assertions made on behalf
of Kalpana Mukherjee that shares amounting to Rs.4,29,000/- were
transferred in favour of Pratima Chowdhury. Controversy relating to
alleged non-payment of consideration money, in the facts and
circumstances of the present case, were not seen to have nay legs, to
stand upon.”
Having recorded the aforesaid findings, the High Court in its conclusion
recorded the following observations:-
“But, as observed earlier, the judgment and order under challenge does
not seem to be suffering from any such infirmity or jurisdictional
error, which calls for or justifies any interference by this Court.”
Based on the analysis of the controversy in the manner summarized
hereinabove, the High Court dismissed the challenge raised by Pratima
Chowdhury by a common order dated 14.2.2006. The common order passed by
the Co-operative Tribunal dated 16.5.2002, and the common order passed by
the High Court dated 14.2.2006 were assailed by Pratima Chowdhury by filing
Special Leave to Appeal (Civil) no. 15252 of 2006.
24. Leave granted.
25. The factual narration recorded by us, the circumstances taken into
consideration by the Arbitrator, and the Co-operative Tribunal, as also,
the analysis of the High Court have all been detailed hereinabove. Suffice
it to state, that there were no further facts besides those already
referred to hereinabove, which were brought to our notice during the course
of hearing. It is also not necessary for us to record the submissions
advanced at the hands of the learned counsel for the rival parties. All
that needs to be mentioned is, that the same submissions as were put
forward by the respective parties hitherto before, came to be addressed
before this Court as well. We shall, therefore, venture to examine the
veracity of the propositions advanced on behalf of the rival parties by
compartmentalizing the submissions advanced before us under different
principles of law. We would thereupon record our final conclusions.
26. First and foremost, it surprises us that Co-operative Tribunal, as
also, the High Court excluded from consideration, the factual position
expressed in the rejoinder filed by the appellant (before the Arbitrator).
In excluding the aforesaid factual position, the Co-operative Tribunal and
the High Court did not rely on any provision of law nor was any reliance
placed on any principle accepted and recognized in legal jurisprudence. It
is not a matter of dispute, that after Kalpana Mukherjee and the Society
were permitted to file written replies before the Arbitrator, the rejoinder
filed thereto on behalf of Pratima Chowdhury, was permitted to be taken on
record. It is not in contention, that in the written replies filed before
the Arbitrator, Kalpana Mukherjee had adopted inter alia the stance, that
consideration was paid to Pratima Chowdhury in lieu of the transfer of flat
no. 5D to her name, even though the documents relied upon by the rival
parties, expressed otherwise. A number of documents not mentioned in the
Dispute Case filed by Pratima Chowdhury were also relied upon by Kalpana
Mukherjee. Pleadings between the parties could be considered as complete,
only after Pratima Chowdhury was permitted to file a rejoinder (in case she
desired to do so). She actually filed a rejoinder which was taken on
record by the Arbitrator. Both parties were permitted to lead evidence,
not only on the factual position emerging from the complaint filed by
Pratima Chowdhury and the written replies filed in response thereto (by
Kalpana Mukherjee, and the Society), but also, the factual position
highlighted by Pratima Chowdhury in her rejoinder affidavit. It is,
therefore, not on the basis of the pleadings of the parties, but also on
the basis of the evidence led in support of the aforesaid pleadings, that
the Arbitrator had recorded his findings in his award dated 5.2.1999. We
are therefore of the view, that the Arbitrator had acted in accordance with
law, and therefore the exclusion from consideration, of the factual
position asserted by Pratima Chowdhury in her rejoinder, by the Co-
operative Tribunal and the High Court was wholly unjustified. The factual
narration by Pratima Chowdhury, could not be excluded from consideration,
while adjudicating upon the rival claims between Pratima Chowdhury and
Kalpana Mukherjee. The instant aspect of the decision of the High Court,
is therefore liable to be set aside, and is accordingly set aside. Just
the instant determination, would result in a whole lot of facts which were
not taken into consideration by the adjudicating authorities, becoming
relevant. Despite that, we feel, that remanding the matter for a denovo
consideration, would place a further burden on the parties. Having heard
learned counsel at great length, we shall settle the issues finally, here
and now.
27. The Co-operative Tribunal in its order dated 16.5.2002 had invoked
the principle of estoppel, postulated in Section 115 of the Indian Evidence
Act. The High Court affirmed the conclusions drawn by the Co-operative
Tribunal. In addition to the above principle, the High Court invoked the
principles of equity and fairness. Insofar as the latter principles are
concerned, we shall delve upon them after examining the contentions of the
rival parties, as equity and fairness would depend upon the entirety and
totality of the facts. The above aspect can therefore only be determined
after dealing with the intricacies of the factual circumstances involved.
We shall, however, endeavour to deal with the principle of estoppel, so as
to figure whether, the rule contained in Section 115 of the Indian Evidence
Act could have been invoked, in the facts and circumstances of the present
case. Section 115 of the Indian Evidence Act is being extracted
hereinabove:-
“115. Estoppel.- When one person has, by his declaration, act or
omission, intentionally caused or permitted another person to
believe a thing to be true and to act upon such belief, neither
he nor his representative shall be allowed, in any suit or
proceeding between himself and such person or his
representative, to deny the truth of that thing.
Illustration
A intentionally and falsely leads B to believe that certain land
belongs to A, and thereby induces B to buy and pay for it. The
land afterwards becomes the property of A, and A seeks to set
aside the sale on the ground that, at the time of the sale, he
had no title. He must not be allowed to prove his want of
title.”
It needs to be understood, that the rule of estoppel is a doctrine based on
fairness. It postulates, the exclusion of, the truth of the matter. All,
for the sake of fairness. A perusal of the above provision reveals four
salient pre conditions before invoking the rule of estoppel. Firstly, one
party should make a factual representation to the other party. Secondly,
the other party should accept and rely upon the aforesaid factual
representation. Thirdly, having relied on the aforesaid factual
representation, the second party should alter his position. Fourthly, the
instant altering of position, should be such, that it would be iniquitous
to require him to revert back to the original position. Therefore, the
doctrine of estoppel would apply only when, based on a representation by
the first party, the second party alters his position, in such manner, that
it would be unfair to restore the initial position. In our considered
view, none of the ingredients of principle of estoppel contained in Section
115 of the Indian Evidence Act, can be stated to have been satisfied, in
the facts and circumstances of this case. Herein, the first party has made
no representation. The second party has therefore not accepted any
representation made to her. Furthermore, the second party has not acted in
any manner, nor has the second party altered its position. Therefore, the
question whether the restoration of the original position would be
iniquitous or unfair does not arise at all. Even if consideration had
passed from Kalpana Mukherjee to Pratima Chowdhury, on the basis of the
representation made by Pratima Chowdhury, we could have accepted that
Kalpana Mukherjee had altered her position. In the facts as they have been
presented by the rival parties, especially in the background of the order
passed by the Arbitrator, that no consideration had passed in lieu of the
transfer of the flat, and especially in the background of the factual
finding recorded by the Co-operative Tribunal and the High Court, that
passing of consideration in the present controversy was inconsequential, we
have no hesitation whatsoever in concluding, that the principle of estoppel
relied upon by the Co-operative Tribunal and the High Court, could not have
been invoked, to the detriment of Pratima Chowdhury, in the facts and
circumstances of the present case. Insofar as the instant aspect of the
matter is concerned, the legal position declared by this Court fully
supports the conclusion drawn by us hereinabove. In this behalf, reference
may be made, firstly, to the judgment rendered by this Court in Kasinka
Trading vs. Union of India, (1995) 1 SCC 274, wherein this Court noticed as
under:-
“11. The doctrine of promissory estoppel or equitable estoppel is
well established in the administrative law of the country. To
put it simply, the doctrine represents a principle evolved by
equity to avoid injustice. The basis of the doctrine is that
where any party has by his word or conduct made to the other
party an unequivocal promise or representation by word or
conduct, which is intended to create legal relations or effect a
legal relationship to arise in the future, knowing as well as
intending that the representation, assurance or the promise
would be acted upon by the other party to whom it has been made
and has in fact been so acted upon by the other party, the
promise, assurance or representation should be binding on the
party making it and that party should not be permitted to go
back upon it, if it would be inequitable to allow him to do so,
having regard to the dealings, which have taken place or are
intended to take place between the parties.”
(emphasis is ours)
The above sentiment recorded in respect of the principle of estoppel was
noticed again by this Court in Monnet Ispat & Energy Ltd. vs. Union of
India & Ors., (2012) 11 SCC 1, wherein this Court expressed its views in
respect of the principle of estoppel as under:-
“289. As we have seen earlier, for invoking the principle of
promissory estoppel there has to be a promise, and on that basis
the party concerned must have acted to its prejudice.”
(emphasis is ours)
The ingredients of the doctrine of estoppel in the manner expressed above
were also projected in H.S. Basavaraj (D) by his LRs. & Anr. Vs. Canara
Bank & Ors., (2010) 12 SCC 458, as under:-
“30. In general words, estoppel is a principle applicable when one
person induces another or intentionally causes the other person
to believe something to be true and to act upon such belief as
to change his/her position. In such a case, the former shall be
estopped from going back on the word given. The principle of
estoppel is, however, only applicable in cases where the other
party has changed his position relying upon the representation
thereby made.”
(emphasis is ours)
As already noticed hereinabove, none of the ingredients of estoppel can be
culled out from the facts and circumstances of the present case. In view
of above, we hereby set aside the determination by the Co-operative
Tribunal, as also the High Court, in having relied on the principle of
estoppel, and thereby, excluding the pleas/defences raised by Pratima
Chowdhury to support her claim.
28. The admitted factual position in the present controversy, in our
considered view, is absolutely clear and unambiguous. Had the different
adjudicating authorities taken into consideration the undisputed factual
position, there ought not to have been much difficulty in resolving the
difficulty. We shall highlight a few relevant admitted facts which crossed
our mind while hearing the matter and whilst recording the order:-
(i) The reason for transferring flat no. 5D indicated in the letters
dated 11.11.1992 and 13.11.1992 was on account of the close relationship
between Pratima Chowdhury and Kalpana Mukherjee, which was expressed by
observing “…my nominee Kalpana, a close relative of mine…”. As a matter of
fact, there was no close relationship between Pratima Chowdhury and Kalpana
Mukherjee. Pratima Chowdhury, is indicated to have been living in Bombay
and never visiting Calcutta. Kalpana Mukherjee is a resident of Calcutta,
who was in employment at Calcutta, and had started to reside with her son
Partha Mukherjee, after he moved to Calcutta alongwith his wife Sova
Mukherjee. There was no direct relationship between Pratima Chowdhury and
Kalpana Mukherjee. Pratima Chowdhury’s niece Sova Mukhrjee was married to
Partha Mukherjee, son of Kalpana Mukherjee. The only relationship that can
be assumed, is of aunty and niece, between Pratima Chodhury and Sova
Mukherjee. If on account of love and affection, for her niece, Pratima
Chowdhury desired to transfer flat no. 5D which she had purchased for a
consideration of Rs.4 lakhs, she would have done so by transferring it to
the name of her niece Sova Mukherjee. Affinity to Sova Mukherjee, and the
love, affection and welfare of Sova Mukherjee, would not extend to a
gesture of the nature under reference, i.e., by way of transfer of
immovable property, of substantial value, without consideration, to the
mother in law of Sova Mukherjee. Therefore, factually the expression of
close relationship between Pratima Chwodhury and Kalpana Mukherjee depicted
in letters dated 11.11.1992 and 13.11.1992 are on the face of it, false and
incorrect. It is, therefore, improper for the adjudicating authorities to
have accepted the factum of close relationship of the parties, in so far
as, the transfer of flat no. 5D, is concerned.
(ii) There is hardly any justification for having accepted another
important factual position depicted in the letters dated 11.11.1992 and
13.11.1992. In this behalf, our reference is to the fact that flat no. 5D
was sought to be transferred by Pratima Chowdhury to Kalpana Mukherjee,
without consideration. First and foremost, the aforesaid factual position
is not acceptable on account of the statement of Kalpana Mukherjee herself.
In the written reply filed before the Arbitrator, Kalpana Mukherjee took
the express stance, that Pratima Chwodhury had transferred flat no. 5D to
her name, by accepting a consideration of Rs.4,29,000/-. She further
asserted, that the aforesaid consideration had passed from Kalpana
Mukherjee to Pratima Chowdhury through Partha Mukherjee. According to
Kalpana Mukherjee, Partha Mukherjee transferred shares in his name valued
at Rs.4,29,000/-, to the name of Pratima Chowdhury. Per se therefore, even
Kalpana Mukherjee denied the factual position indicated in the above
letters, whereby flat no. 5D was transferred from the name of Pratima
Chowdhury, to that of Kalpana Mukherjee.
(iii) The letters dated 11.11.1992 and 13.11.1992 expressly recorded, that
the factual position narrated in the above letters was on account of
“compliance with the rules regulating such transfer, and also, for avoiding
future complications”. In view of the factual position noticed in the
foregoing paragraphs, it is apparent, that false facts were being recorded
for compliance with the rules and regulations, as also, for avoiding future
complications. One would have appreciated the recording of consideration
in lieu of the transfer of property from the name of Pratima Chowdhury to
that of Kalpana Mukherjee, to avoid future complications, rather than
withholding the same. It is clearly not understandable, what kind of
complications were being avoided. Expressing the above factual position in
the letters under reference, makes the whole transaction suspicious,
mistrustful and possibly fraudulent too. In the absence of any
relationship, the party benefiting from the letters dated 11.11.1992 and
13.11.1992, would have successfully avoided all complications merely by
incorporating consideration, which was to pass from Kalpana Mukherjee to
the transferee Pratima Chowdhury. If consideration was to pass, and had
actually passed, it is difficult to understand why the parties would say,
that the transaction did not involve passing of consideration. It is
therefore clear, that all the ingredients of letter dated 11.11.1992 and
13.11.1992 are shrouded in suspicious circumstances. One is prompted to
record herein, that it was not legitimately open to the parties to record
in the letters under reference, that flat no. 5D was being gifted by
Pratima Chowdhury to Kalpana Mukherjee, on account of lack of proximity
between the parties. The transfer of the said property by one to the
other, by way of gift, would obviously have been subject to judicial
interference, as the same would at least prima facie, give the impression
of dubiety. It was therefore, that Kalpana Mukherjee hastened to adopt a
different factual position in her written reply before the Arbitrator.
(iv) It is relevant to mention, that in the written statement filed by
Kalpana Mukherjee (before the Arbitrator) the stand adopted by her was,
that a consideration of Rs.4,29,000/- had passed from her to Pratima
Chowdhury, by way of transfer of shares (standing in the name of her son,
Partha Mukherjee) to the name of Pratima Chowdhury. In this behalf it
would be relevant to notice, that the documents of transfer executed
between Pratima Chowdhury and Kalpana Mukherjee were dated 11.11.1992 and
13.11.1992. Based thereon, the Board of Directors of the Society, in its
meeting held on 14.2.1993, resolved to accept the resignation of Pratima
Chowdhury. It was further resolved, to accept the membership of Kalpana
Mukherjee in her place. On the date of execution of the documents under
reference, as also on the date of passing of the resolution by the Board of
Directors of the Society, Partha Mukherjee did not have any shares in his
name. The shares which Partha Mukherjee acquired, and which Kalpana
Mukherjee claims to have been transferred in lieu of consideration (to the
name of Pratima Chowdhury), were shown to have been acquired on or after
8.9.1993. The dates of acquisition of the said shares, as were recorded in
the order passed by the Arbitrator, which position has not been disputed
before us, are as follows:-
“COMPANY’S NAME NO. OF SHARES ACQUIRED
Tata Chemicals Ltd. 50 nos. 8.9.93
Tata Chemicals Ltd. 450 nos. 27.10.93
Siemens 50 nos. 2.8.93
Indian Aluminium 500 nos. 4.3.94
I.T.C. Hotels 100 nos. acquired with
Mr.
H.P. Roy
4.4.94”
It is therefore apparent, that Partha Mukherjee did not even have the
shares referred to by the transferee Kalpana Mukherjee, in his name, when
the transfer documents were executed on 11.11.1992 and 13.11.1992, or even
on 14.2.1993 when the Board of Directors of the Society, passed the
transfer resolution. The above shares are shown to have been transferred
to the name of Pratima Chowdhury on 16.12.1994. Well before 16.12.1994,
even according to the stance adopted by Kalpana Mukherjee, Pratima
Chowdhury had executed all the transfer documents. It is therefore
difficult to accept, that the parties had agreed to pass on consideration
by transfer of shares, which were not even owned by Kalpana Mukherjee
(through Partha Mukherjee) on the date of transfer of flat no. 5D from
Pratima Chowdhury to Kalpana Mukherjee. In sum and substance therefore, on
undisputed facts, the stance adopted by Kalpana Mukherjee in the written
statement filed by her before the Arbitrator, is shown to be false. This
aspect of the matter would bring out a legitimate query, namely, why should
Kalpana Mukherjee have adopted a false stance, contrary to the expressed
position in the letters dated 11.11.1992 and 13.11.1992. This further
exposes, the suspicious nature of the transfer transaction.
(v) On the subject of transfer of shares from the name of Partha
Mukherjee to the name of Pratima Chowdhury, which, according to Kalpana
Mukherjee constituted passing of consideration to Pratima Chowdhury (in
lieu of the transfer of flat no. 5D). Pratima Chowdhury had adopted the
stance, that the transfer of the above shares was on account of return of
loans extended by Pratima Chowdhury to Partha Mukherjee. Insofar as the
instant aspect of the matter is concerned Pratima Chowdhury had asserted,
that after the transfer of Partha Mukherjee from Calcutta to Bombay in the
year 1993, he gave up his employment with Colgate Palmolive (India)
Limited, and started a business of aluminium products with one R.K. Sen, at
Bombay. To help Partha Mukherjee with his above business venture, Pratima
Chowdhury had (on the asking of Partha Mukherjee) paid a sum of Rs. 2 lakhs
by way of cheque, to Bharat Aluminium Company Limited, for supply of raw
materials to Partha Mukherjee’s business venture. It was also pointed out,
that Partha Mukherjee had also taken a loan for a sum of Rs. 1,50,000/- for
the same purpose from Bani Roy (sister of Pratima Chowdhury). It was also
asserted, that Sova Mukherjee had similarly extended loans, by making
payments through cheque to Partha Mukherjee. The Arbitrator had accepted
the above assertion of Pratima Chowdhury. For the above determination, the
Arbitrator had placed reliance, on documentary and oral evidence, produced
by Pratima Chowdhury. The instant factual aspect of the matter was totally
overlooked by the Co-operative Tribunal, as well as, by the High Court.
Keeping in view the factual position depicting in paragraph (iv) above, we
have no doubt in our mind, that there was substance in the determination of
the Arbitrator, specially on account of the fact that transfer of shares
from the name of Partha Mukherjee to the name of Pratima Chowdhury came to
be effected, well after the transfer of flat no. 5D to the name of Kalpana
Mukherjee. For the above reason as well, the findings of fact recorded by
the Co-operative Tribunal as well as by the High Court, are bound to be
considered as having been recorded without taking into consideration all
the material and relevant facts.
(vi) The fact that Pratima Chowdhury had addressed a letter to the
Secretary of the Society, dated 28.2.1995, for withdrawal of her earlier
letter dated 11.11.1992, is not in dispute. It is also not a matter of
dispute, that at the time when Pratima Chowdhury addressed the above
letter, neither the transfer of membership, nor the transfer of the flat,
had assumed finality. The transfer of membership, as also the transfer of
the flat, would assume finality only upon the approval of the same by the
Deputy Registrar, Co-operative Societies. The factual position emerging
from the record of the case reveals, that the Society sought the approval
of the Deputy Registrar, Co-operative Societies for the transfer of
membership, as also, flat no. 5D to the name of Kalpana Mukherjee on
13.3.1995. Undoubtedly, Pratima Chowdhury had sought revocation, before
the transfers under reference had assumed finality. It is in the above
background, that one needs to evaluate the reply of the Society dated
10.4.1995. Through the letter dated 10.4.1995, Pratima Chowdhury was
informed, that the Society had no authority to look into the matter, after
the resolution of the Board of Directors dated 2.4.1995. We find the above
explanation, untenable. It was imperative for the Society to have examined
the withdrawal letter dated 28.2.1995, the matter certainly had not been
concluded. Well after the withdrawal letter, the Society by its notice
dated 16.4.1995 had intimated its members, about the resolution dated
2.4.1995. The matter was, therefore, pending authoritative conclusion.
Thus viewed, it was not justified for the Society to deny consideration of
the withdrawal letter dated 28.2.1995. Acceptance or rejection on merits
is another matter, but non-consideration is not understandable. The
instant non-consideration clearly invalidates the resolution passed by the
Society.
(vii) On 22.3.1995, Pratima Chowdhury addressed a letter to the Deputy
Registrar, Co-operative Societies, imploring him to take appropriate
action, by considering the withdrawal letter dated 28.2.1995. We are
surprised, that the Deputy Registrar, Co-operative Societies adopted the
same stance, as was adopted by the Society. When the letter dated
22.3.1995 was addressed to the Deputy Registrar, Co-operative Societies, it
had not yet granted approval to the recommendations made by the Society.
The receipt of the letter dated 28.2.1995, by the Society (as also the
receipt of the letter dated 22.3.1995, by the Deputy Registrar, Co-
operative Societies) is not in dispute. It is imperative for us therefore
to conclude, that the decision taken by the Deputy Registrar, Co-operative
Societies was, without reference to the withdrawal letter dated 28.2.1995
(which was enclosed with the letter dated 22.3.1995 addressed to the Deputy
Registrar, Co-operative Societies). The determination by the Deputy
Registrar, Cooperative Societies, cannot therefore be treated as a valid
and legitimate consideration. Acceptance or rejection on merits is another
matter, but non-consideration is just not understandable. The instant non-
consideration clearly invalidates the approval granted by the Deputy
Registrar, Co-operative Societies.
(viii) The veracity of the execution of the documents dated 11.11.1992
and 13.11.1992 by Pratima Chowdhury, was also examined by the Arbitrator.
In the above examination, the Arbitrator arrived at the conclusion, that
Pratima Chowdhury was in Bombay and not in Calcutta when the above
documents were executed. The above finding was recorded on the basis of
three witnesses produced on behalf of the complainant (before the
Arbitrator). While rejecting the conclusion drawn by the Arbitrator, the
Co-operative Tribunal overlooked the statements of the witnesses produced
by Pratima Chowdhury, merely because the notary was an Advocate. The Co-
operative Tribunal reasoned, that the statement of S.N. Chatterjee, an
Advocate, had to be given more weightage, than the witnesses produced by
Pratima Chowdhury. The above determination at the hands of the Co-
operative Tribunal, besides being perverse, is also totally unacceptable in
law. In the facts and circumstances of the present case, the statement of
the notary should have been rejected and discarded, simply because the
notary in his deposition had acknowledged, that he did not issue any
notarial certificate in terms of Section 8 of the Notary Act. In the
absence of issuance of any such certificate, notarization of the document
dated 13.11.1992 was clearly subject to suspicion. The conclusion drawn by
the Co-operative Tribunal as also the High Court, to the effect that the
document dated 13.11.1992 was executed at Calcutta, is therefore, based on
no evidence whatsoever. The fact that the document dated 13.11.1992 had
not been executed in Calcutta, was also sought to be substantiated by
showing, that the registration number of the Society was not depicted in
the said letter, even though the said letter was shown to have been
executed at the residence of the Secretary of the Society. It was reasoned,
that the Secretary of the Society would have supplied the aforesaid number,
if the above document had been executed at his residence. Having rejected
the credibility of the statement of S.N. Chatterjee (the notary), and
having not accepted the fact that the above document was executed at the
residence of Anil Kumar Sil, the Secretary of the Society, we find no
reason for not accepting the statements of the three witnesses produced by
Pratima Chowdhury, to show that she (Pratima Chowdhury) was at Bombay on
11.11.1992, as well as, on 13.11.1992. Herein again, the Cooperative
Tribunal and the High Court, erred on the face of the record, by not taking
into consideration material facts, available on the file of the case.
(ix) In the background of the factual position emerging from the
deliberations recorded hereinabove, it is also necessary to notice, that
the Arbitrator had placed heavy reliance on the fact, that Kalpana
Mukherjee had deposited rent on 21.10.1993 (payable to Pratima Chowdhury),
into the account of Pratima Chowdhury, by herself, filling up the bank
deposit voucher. Accordingly, the Arbitrator inferred, that the property
in question, even to the knowledge of Kalpana Mukherjee, had not actually
been transferred to her name by Pratima Chowdhury (at least upto
21.10.1993). That was the reason, why Kalpana Mukherjee had continued to
deposit rent for flat no. 5D, into the account of Pratima Chowdhury upto
21.10.1993. Coupled with the aforesaid factual aspect, the Arbitrator
placed great reliance on the letter dated 28.10.1993 addressed by Partha
Mukherjee to Colgate Palmolive (India) Limited, wherein, he described
Pratima Chowdhury as the “landlady”. Undoubtedly, if the documents relied
upon by Kalpana Mukherjee were genuine, Partha Mukherjee would not have
acknowledged the ownership of Pratima Chowdhury over flat no. 5D (on
28.10.1993). These aspects of the matter were totally overlooked by the Co-
operative Tribunal, as well as, by the High Court. These were vital facts,
and needed to be examined, if the order passed by the Arbitrator was to be
interfered with. In the absence of such consideration, the findings of
fact recorded by the Co-operative Tribunal and by the High Court, are bound
to be considered as perverse. Since the factual position attributed to the
actions of 21.10.1993 and 28.10.1993, which emanated and emerged from
Kalpana Mukherjee and Partha Mukherjee respectively, we are of the view
that entire sequence of transfer, is rendered doubtful and suspicious.
(x) The determination of the Arbitrator, on the subject of the transfer
of the covered garage, to the name of Kalpana Mukherjee was also overlooked
by the Co-operative Tribunal, as well as, by the High Court. From the
facts already narrated above, it is clear that Pratima Chowdhury, had one
covered garage space also. Whilst reference was made about the details of
the flat sought to be transferred, in the transfer documents, no reference
was made to the covered garage space. Based on the letter dated
11.11.1992, and the document dated 13.11.1992, flat no. 5D was transferred
to the name of Kalpana Mukherjee. The instant transfer however did not
include the covered garage space. Thereafter, based on an agreement
executed between Kalpana Mukherjee (on the one hand), and the Society (on
the other), the said covered garage space was transferred to the name of
Kalpana Mukherjee, on 25.4.1995. The said transfer was not at the behest
of, or with the concurrence of Pratima Chowdhury. Therefore, according to
the view expressed by the Arbitrator, the covered garage space, must be
deemed to have never been transferred to Kalpana Mukherje by its erstwhile
owner. The Arbitrator also expressed the view, that the agreement dated
25.4.1995 could not have been executed without the participation of Pratima
Chowdhury. The above factual position has not been disputed at the hands
of Kalpana Mukherjee, before this Court. The above reasoning, in our
considered view, was fully justified. The instant aspect of the matter was
also totally overlooked by the Co-operative Tribunal, as well as, by the
High Court. For the above reason also, the findings of the fact, recorded
by the Co-operative Tribunal and by the High Court, are bound to be treated
as perverse.
29. For all the reasons recorded by us in foregoing sub-paragraphs, we
are of the view that the Co-operative Tribunal as well as the High Court,
seriously erred in recording their conclusions. We are satisfied in
further recording, that the Arbitrator was wholly justified in allowing the
Dispute Case filed by Pratima Chowdhury, by correctly appreciating the
factual and legal position.
30. The Co-operative Tribunal as well as the High Court, had invoked the
principle of justice and equity, and the doctrine of fairness, while
recording their eventual findings in favour of Kalpana Mukherjee. It is,
therefore, necessary for us, to delve upon the above aspect of the matter.
Before we venture to examine the instant controversy in the above
perspective, it is necessary to record a few facts. It is not a matter of
dispute, that for a long time Pratima Chowdhury had been residing at
Bombay. She was residing at Bombay in the house of H.P. Roy and Bani Roy.
Bani Roy, as stated above, is the sister of Pratima Chowdhury. H.P. Roy is
a wealthy person. Partha Mukherjee son of Kalpana Mukherje, is an
engineering graduate from IIT, Kharagpur. He also possesses the
qualification of MBA, which he acquired from Ahmedabad. Originally Partha
Mukherjee was employed as Sales Manager/Regional Manager with Colgate
Palmolive (India) Limited, at Bombay. Partha Mukherjee married Sova
Mukherjee (the daughter of H.P. Roy), whilst he was posted at Bombay in
1987. Soon after his marriage, Partha Mukherjee and Sova Mukherjee also
started to live in the house of H.P. Roy (father-in-law of Partha
Mukherjee). The evidence available on the record of the case reveals, that
Pratima Chowdhury treated Sova Mukherjee as her daughter, and Partha
Mukherjee as her son. In 1992, Partha Mukherjee was transferred from
Bombay to Calcutta. Immediately on his transfer, Pratima Chowdhury
accommodated him in flat no. 5D. Subsequently, Colgate Palmolive (India)
Limited entered into a lease and licence agreement, in respect of flat no.
5D with Pratima Chowdhury, so as to provide residential accommodation to
Partha Mukherjee (as per the terms and conditions of his employment).
Obviously, Partha Mukherjee was instrumental in the execution of the above
lease and licence agreement. In order to deposit monthly rent payable to
Pratima Chowdhury (by Colgate Palmolive (India) Limited), Partha Mukherjee
opened a bank account in the name of Pratima Chowdhury, jointly with
himself. He exclusively operated the above account, for deposits as well
as for withdrawals. Not only that, the findings recorded by the Arbitrator
indicate that the letter dated 11.11.1992 written by Pratima Chowdhury was
drafted by Partha Mukherjee. The aforesaid conclusion was drawn from the
fact that the manuscript of the original was in the handwriting of Partha
Mukherjee. All the above facts demonstrate, a relationship of absolute
trust and faith between Pratima Chowdhury and Partha Mukherjee. The
aforesaid relationship emerged, not only on account of the fact that Partha
Mukherjee was married to Sova Mukherjee (the niece of Pratima Chowdhury),
but also on account of the fact, that Partha Mukherjee and his wife Sova
Mukherjee soon after their marriage lived in the house of H.P. Roy (husband
of the sister of Pratima Chowdhury). They resided together with Pratima
Chowdhury till 1992, i.e., for a period of more than a decade, before
Partha Mukherjee was transferred to Calcutta. In our considered view the
relationship between Partha Mukherjee and Pratima Chowdhury would
constitute a fiduciary relationship. Even though all the above aspects of
the relationship between the parties were taken into consideration, none of
the adjudicating authorities dealt with the controversy, by taking into
account the fiduciary relationship between the parties. When parties are
in fiduciary relationship, the manner of examining the validity of a
transaction, specifically when there is no reciprocal consideration, has to
be based on parameters which are different from the ones applicable to an
ordinary case. Reference in this behalf, may be made to the decision
rendered by this Court in Subhas Chandra Das Mushib vs. Ganga Prosad Das
Mushib, AIR 1967 SC 878, wherein this Court examined the twin concepts of
“fiduciary relationship” and “undue influence” and observed as under:
“We may now proceed to consider what are the essential in- gredients
of undue influence and how a plaintiff who seeks relief on this ground
should proceed to prove his case and when the defendant is called upon
to show that the contract or gift was not induced by undue influence.
The instant case is one of gift but it is well settled that the law as
to undue influence is the same in the case of a gift inter- vivos as
in the case of a contract.
Under s. 16 (1) of the Indian Contract Act 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. This shows that the court trying a case of
undue influence must consider two things to start with, namely, (1)
are the relations between the donor and the donee such that the donee
is in a position to dominate the will of the donor and (2) has the
donee used that position to obtain an unfair advantage over the
donor'?
Sub-section (2) of the section is illustrative as to when a person is
to considered to be in a position to dominate the will of another.
These are inter alia (a) where the donee holds a real or apparent
authority over the donor or where he stands in a fiduciary relation to
the donor or (b) where he makes a contract with a person whose mental
capacity is temporarily or permanently affected by reason of age,
illness, or mental or bodily distress.
Sub-section (3) of the section throws the burden of proving that a
contract was not induced by undue influence on the person benefiting
by it when two factors are found against him, namely that he is in a
position to dominate the will of another and the transaction appears
on the face of it or on the evidence adduced to be unconscionable.
The three stages for consideration of a case of undue influence were
expounded in the case of Ragunath Prasad v. Sarju Prasad and others
(AIR 1924 PC 60) in the following words :- "In the first place the
relations between the parties to each other must be such that one is
in a position to dominate the will of the other. Once that position is
substantiated the second stage has been reached-namely, the issue
whether the contract has been induced by undue influence. Upon the
determination of this issue a third point emerges, which is that of
the onus probandi. If the transaction appears to be unconscionable,
then the burden of proving that the contract was not induced by undue
influence is to lie upon the person who was in a position to dominate
the will of the other.”
(emphasis is ours)
The subject of fiduciary relationship was also examined by this Court in,
Krishna Mohan Kul alias Nani Charan Kul vs. Pratima Maity, (2004) 89 SCC
468, wherein it was held as under:
“…..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 and 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.
A person standing in a fiduciary relation to another has a
duty to protect the interest given to his care and the Court watches
with jealously all transactions between such persons so that the
protector may not use his influence or the confidence to his
advantage. When the party complaining shows such relation the law
presumes everything against the transaction and the onus is cast
against the person holding the position of confidence or trust to show
that the transaction is perfectly fair and reasonable, that no
advantage has been taken of his position. This principle has been
engrained in Section 111 of the Indian Evidence Act, 1872 (in short
the 'Evidence Act'). The rule here laid down is in accordance with a
principle long acknowledged and administered in Courts of Equity in
England and America. This principle is that he who bargains in a
matter of advantage with a person who places confidence in him is
bound to show that a proper and reasonable use has been made of that
confidence. The transaction is not necessarily void ipso facto, nor is
it necessary for those who impeach it to establish that there has been
fraud or imposition, but the burden of establishing its perfect
fairness, adequacy and equity is cast upon the person in whom the
confidence has been reposed. The rule applies equally to all persons
standing in confidential relations with each other. Agents, trustees,
executors, administrators, auctioneers, and others have been held to
fall within the rule. The Section requires that the party on whom the
burden of proof is laid should have been in a position of active
confidence where fraud is alleged, the rule has been clearly
established in England that in the case of a stranger equity will not
set aside a voluntary deed or donation, however, improvident it may
be, if it be free from the imputation of fraud, surprise, undue
influence and spontaneously executed or made by the donor with his
eyes open. Where an active confidential, or fiduciary relation exists
between the parties, there the burden of proof is on the donee or
those claiming through him. It has further been laid down that where a
person gains a great advantage over another by a voluntary instrument,
the burden of proof is thrown upon the person receiving the benefit
and he is under the necessity of showing that the transaction is fair
and honest.
13. In judging of the validity of transactions between persons
standing in a confidential relation to each other, it is very material
to see whether the person conferring a benefit on the other had
competent and independent advice. The age or capacity of the person
conferring the benefit and the nature of the benefit are of very great
importance in such cases. It is always obligatory for the
donor/beneficiary under a document to prove due execution of the
document in accordance with law, even de hors the reasonableness or
otherwise of the transaction, to avail of the benefit or claim rights
under the document irrespective of the fact whether such party is the
defendant or plaintiff before Court.
14. It is now well established that a Court of Equity, when a person
obtains any benefit from another imposes upon the grantee the burden,
if he wishes to maintain the contract or gift, of proving that in fact
he exerted no influence for the purpose of obtaining it. The
proposition is very clearly started in Ashburner's Principles of
Equity, 2nd Ed., p.229, thus:
"When the relation between the donor and donee at or shortly
before the execution of the gift has been such as to raise a
presumption that the donee had influence over the donor, the
court sets aside the gift unless the donee can prove that the
gift was the result of a free exercise of the donor's will."”
(emphasis is ours)
The above conclusions recorded by this Court, came to be reiterated
recently in Anil Rishi Vs. Gurbaksh Singh, (2006) 5 SCC 558.
31. While deciding the proposition in hand, we must keep in mind the law
declared by this Court on the subject of fiduciary relationship. We will
also proceed by keeping in mind, what we have already concluded in the
preceding paragraph, i.e., that relationship between Partha Mukherjee and
Pratima Chowdhury was a relationship of faith, trust and confidence.
Partha Mukherjee was in a domineering position. He was married to Sova
Mukherjee. Sova Mukherjee is the daughter of H.P. Roy. Pratima Chowdhury
has lived for a very long time in the house of H.P. Roy. During that
period (after his marriage) Partha Mukherjee also shared the residential
accommodation in the same house with Pratima Chowdhury, for over a decade.
In Indian society the relationship between Partha Mukherjee and Pratima
Chowdhury, is a very delicate and sensitive one. It is therefore, that
Pratima Chowdhury extended all help and support to him, at all times. She
gave him her flat when he was transferred to Calcutta. She also extended
loans to him, when he wanted to set up an independent business at Bombay.
These are illustrative instances of his authority, command and influence.
Instances of his enjoying the trust and confidence of Pratima Chowdhury
include, amongst others, the joint account of Pratima Chowdhury with Partha
Mukherjee, which the latter operated exclusively, and the drafting of the
letters on behalf of Pratima Chowdhury. In such fact situation, we are of
the view, that the onus of substantiating the validity and genuineness of
the transfer of flat no. 5D, by Pratima Chowdhury, through the letter dated
11.11.1992 and the document dated 13.11.1992, rested squarely on the
shoulders of Kalpana Mukherjee. Because it was only the relationship
between Partha Mukherjee and Pratima Chowdhury, which came to be extended
to Kalpana Mukherjee. The document dated 13.11.1992 clearly expressed,
that the above transfer was without consideration. Kalpana Mukherjee in
her written reply before the Arbitrator asserted, that the above transfer
was on a consideration of Rs.4,29,000/-. The Arbitrator in his order dated
5.2.1999 concluded, that Kalpana Mukherjee could not establish the passing
of the above consideration to Pratima Chowdhury. The Cooperative Tribunal,
as well as, the High Court, despite the factual assertion of Kalpana
Mukherjee were of the view, that passing of consideration was not essential
in determination of the genuineness of the transaction. We are of the
view, that the Cooperative Tribunal, as well as, the High Court seriously
erred in their approach, to the determination of the controversy. Even
though the onus of proof rested on Kalpana Mukherjee, the matter was
examined by requiring Pratima Chowdhury to establish all the alleged facts.
We are of the view, that Kalpana Mukherjee miserably failed to discharge
the burden of proof, which essentially rested on her. Pratima Chowdhury
led evidence to show, that she was at Bombay on 11.11.1992 and 13.11.1992.
In view of the above, the letter dated 11.11.1992 and the document dated
13.11.1992, shown to have been executed at Calcutta could not be readily
accepted as genuine, for the said documents fell in the zone of suspicion,
more so, because the manuscript of the letter dated 11.11.1992 was in the
hand-writing of Partha Mukherjee. Leading to the inference, that Partha
Mukherjee was the author of the above letter. It is therefore not
incorrect to infer, that there seems to be a ring of truth, in the
assertion made by Pratima Chowdhury, that Partha Mukherjee had obtained her
signatures for executing the letter and document referred to above. We
find no justification whatsoever for Pratima Chowdhury, to have transferred
flat no. 5D to Kalpana Mukherjee, free of cost, even though she had
purchased the same for a consideration of Rs. 4 lakhs in the year 1987.
Specially so, when she had no direct intimate relationship with Kalpana
Mukherjee. By the time the flat was transferred, more than a decade had
passed by, during which period, the price of above flat, must have
escalated manifold. Numerous other factual aspects have been examined by
us above, which also clearly negate the assertions made by Kalpana
Mukherjee. The same need not be repeated here, for reasons of brevity.
Keeping in mind the above noted aspects, we are of the considered view,
that invocation of the principle of justice and equity, and the doctrine of
fairness, would in fact result in returning a finding in favour of Pratima
Chowdhury, and not Kalpana Mukherjee.
32. For the reasons recorded hereinabove, the instant appeal is allowed,
the order dated 16.5.2002 passed by the Co-operative Tribunal, and the
order dated 14.2.2006 passed by the High Court, are hereby set aside. The
determination rendered by the Arbitrator in his award dated 5.2.1999, is
hereby affirmed. Kalpana Mukherjee is directed to handover the possession
of flat no. 5D to Pratima Chowdhury, within one month from today. The
Society is also directed to retransfer the shares of the Society earlier
held by Pratima Chowdhury, and the ownership rights of flat no. 5D to the
name of Pratima Chowdhury, without any delay.
………………………….CJI.
(P. Sathasivam)
…………………………….J.
(Jagdish Singh Khehar)
New Delhi;
February 10, 2014.
-----------------------
69
