2025 (3) TMI 2 - HC - Indian Laws

Gift deed upheld despite lease covenant violation as trial court failed to establish fraud or invalidity

Mandira Chowdhury and others Versus Rama Devi Chowdhury and others

The HC allowed the appeal and set aside the trial court's judgment declaring a gift deed void. The trial court failed to properly formulate issues and ... Gift Deed - Valid instrument or not - time limitation - seeking grant of permanent injunction restraining the defendants/appellants from selling, mortgaging, encumbering or alienating the suit property on the strength of the said document - HELD THAT:- The entire impugned judgment does not reflect formulation of any issue at all, although issues have been supposedly decided by their respective numbers. The issues originally framed in the suit, which are a part of the paper book, also do not reflect any issue on violation of Clause II (6). Rather, the learned Trial Judge observed in her judgment that the “only” bone of contention between the parties was fraud, whereas she does not adjudicate in favour of the plaintiff on such count by holding that the deed was vitiated by fraud at all. By such observation regarding the only bone of contention being fraud, the learned Trial Judge made it explicitly evident that she did not formulate the alleged violation of Clause II (6) as an issue for the parties to address. Clause II (6) provides that the lessees shall not assign or transfer in any way or mortgage the subject land without the previous consent in writing of the Chairman of the Board of Trustees of the CIT. However, we do not find any clause within the four corners of the lease deed which invalidates such a transfer, even if made without such written prior permission. The maximum consequence which might have visited the lessees in the event of breach of any of the covenants of the lease deed, including Clause II (6), would be non-renewal of the lease after the expiry of its normal tenure of 99 years - the violation of Clause II (6) is not otherwise fatal to the validity of such transfer, made without any prior written consent of the CIT. In the gift deed itself, sufficient explanation for transfer of the property in favour of the donee in exclusion of the donor’s children was given. The donor stated that she had great love and affection for the done, who happened to be her daughter-in-law and the donee maintained great regards and esteem in her behaviour and dealings with the donor. It was further stated that the sons and daughters of the donor were well established in their lives. The husband of Rama, who subsequently shot off a letter which has been relied on by the respondent, was a confirming party to the deed and endorsed the transfer of the said land and premises in favour of the donee by way of gift by reason of natural love and affection for the donee, which is also recorded in the deed itself - in view of the intrinsic evidence available in the disputed deed itself, there is no reason why the court should go behind the deed and try to read into the mind of the donor any intention contrary to the execution of the deed. Conclusion - The learned Trial Judge acted patently contrary to the law and materials on record in declaring the disputed gift deed to be void and not binding on the plaintiff and granting permanent injunction against the defendants from selling, mortgaging, encumbering, alienating the suit property on the strength of the said document dated May 22, 1985. Appeal is allowed on contest without costs, thereby setting aside the impugned judgment and decree dated February 8, 2017 passed by the learned Judge, Second Bench, City Civil Court at Calcutta in Title Suit No. 1738 of 1992 and dismissing the said suit. ISSUES PRESENTED and CONSIDEREDThe primary legal issues considered in this judgment include: Whether the suit was barred by limitation, given the time elapsed between the execution of the deed of gift and the filing of the suit. Whether the deed of gift was void due to fraud or misrepresentation. Whether the deed of gift was invalidated by the violation of Clause II (6) of the original lease deed, which required prior written consent from the Calcutta Improvement Trust (CIT) for any transfer of the property. Whether the evidence presented was admissible and valid, particularly concerning the testimony of the plaintiff's son, Durga, and the procedural requirements under Order XVIII Rule 3-A of the Code of Civil Procedure.ISSUE-WISE DETAILED ANALYSISLimitation Issue: The appellants argued that the suit was barred by limitation as it was filed seven years after the execution of the deed of gift, contrary to the three-year limitation period under the Limitation Act. The Court noted that the Trial Judge did not address the limitation issue, which should have been considered under Section 3 of the Limitation Act. However, the Court found that the original plaintiff claimed ignorance of the deed's nature at the time of execution, believing it to be a power of attorney, thus the suit was not time-barred.Fraud or Misrepresentation: The respondents alleged that the deed was executed under a misrepresentation, with the donor believing she was signing a power of attorney. The Court found no foundational evidence to support the claim of misrepresentation, as there was no proof that Ashish, the donee's husband, collected rent on behalf of the donor. Evidence, including a letter from the donor to the CIT seeking permission for the gift, indicated the donor's intention to execute the gift deed. The Trial Judge did not find the deed vitiated by fraud, nor was there a cross-objection challenging this absence.Violation of Lease Deed Clause II (6): The Trial Court's judgment focused on the violation of Clause II (6), which required prior CIT consent for property transfer. The Court found that no issue was framed regarding this violation, making the judgment perverse and beyond jurisdiction. Clause II (6) was deemed directory, not mandatory, as it lacked any sanction or penal provision for breaches. The CIT's subsequent actions, including dismissing the donor's application to transfer the property to her son, effectively ratified the transfer to the donee.Admissibility of Evidence: The appellant challenged the admissibility of the donor's son's testimony, arguing it violated Order XVIII Rule 3-A of the Code of Civil Procedure. The Court disagreed, noting the Trial Judge granted permission for the testimony after it was given, which was permissible under the rule's language.SIGNIFICANT HOLDINGS The Court held that the suit was not barred by limitation, as the plaintiff's claim of ignorance regarding the deed's nature was credible. No evidence substantiated the claim of fraud or misrepresentation, and the Trial Judge did not find the deed vitiated on these grounds. The violation of Clause II (6) was not a valid ground for invalidating the deed, as it was directory and not mandatory, and the CIT's actions ratified the transfer. The procedural challenge regarding the testimony under Order XVIII Rule 3-A was dismissed, as the Trial Judge's post facto permission was valid. The Court concluded that the Trial Judge's decision to declare the deed void was contrary to law and evidence, thus setting aside the judgment and decree.The appeal was allowed, and the original suit was dismissed, with a formal decree to be drawn up accordingly.