TaxTMI 
TaxTMI 
2008 (5) TMI 635
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....vi, Deft. No.4 Lakshmi 4. Smt. Lakshmi Devi 5. Smt. Venajakshi 5. Sri K.S. Sudarshan 6. Sri K.S. Prakash, Deft. No.1 6. Smt. Saraswathi 7. Sri K.S. Ramesh, Deft. No.2 7. Smt. Rukmini 8. Smt. Sarojamma, Deft. No.5 K. Harida Sreenivasa Pasad Smt. K. Sreeni 8. Sri K.R. K.R. Venkatamma 9. Smt. Seethqalakshmi, Deft. No.6 9. Smt. Padmavathi Salu Venkatesulu Sreenivasulu 10. Smt. Bharathi, Deft. No.7 11. Smt. Kum. Shoba, Deft. No.8 Smt. Singaramma Smt. Venkatalakshamma 1st wife 2nd wife. 3. We are concerned herein with the branch of K. Sreenivasulu. He had two wives, the first wife being Singaramma. Through his first wife Singaramma, he had eleven children. Except Venajakshi, they are parties to the suit. Kanthamma and Ranganayakamma are the plaintiffs. Through his second wife, Shri K. Sreenivasulu had nine children. 4. Allegedly there was a partnership firm through which K. Sreenivasulu was doing business in silk sarees. Whether the said partnership was a firm constituted under the Partnership Act, 1932 or a Hindu joint family Firm is in dispute. However, the said firm was said to have been dissolved. Thereafter K. Sreenivasulu had been carrying on the said ....
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....ition meaning thereby that the partition took place in 1957 and several other moveable and immovable properties were acquired in the name of Sreenivasulu and other members of the families. They were in joint possession. Ten items of immovable properties, however, allegedly were the subject matter of joint sale for the purpose of discharge of income tax and wealth tax liabilities. They have been excluded from partition. It was furthermore alleged that some other properties had also been transferred and deeds of sale were executed by the Bangalore Development Authority in favour of plaintiff Nos. 1 and 2 therein. Paragraph 12 of the said plaint reads as under :- "12. Thus, item No. 1 to 8 (one to eight) mentioned in the plaint are the properties now available and standing in the names of persons referred to above. This being a suit for general partition even though some of the properties are in the name of individual members of the family and as per records, but nevertheless shown in detail with a view to avoid unnecessary controversies and to effect just, fair and equitable partition among the members of the family." 7. Indisputably both the branches of Sreenivasulu entered in....
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.... as well as others representing that the same were required for payment of tax and also for managing the properties. The said signatures used to be made as they then had immense faith in their brothers. A Power of Attorney was executed by the first appellant Ranganayakamma in favour of K.S. Prakash on 15th July, 1983, in terms whereof he was authorized to enter into a partition on her behalf. A recital has also been made therein that Ranganayakamma, appellant No.2 herein, had agreed to relinquish her right as per the agreement. Another Power of Attorney was executed by the 4th defendant in favour of Singaramma 10. A deed of partition was executed on 5th August, 1983 in terms whereof Singaramma was allotted 1/3rd share in item No.3 and rest of the properties were retained by the brothers. The sisters allegedly relinquished their share for a consideration of Re.1/- only; the relevant parts whereof read as under :- "1. The properties described in the Second Schedule hereunder are hereby allotted to the share of the parties of the First and Second Parts. 2. The property described in the Third Schedule hereunder is hereby allotted to the share of the party of the Eleventh part.....
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....d Firm of Advocates. Thereafter, in fraudulent abuse of the said power-of-attorney and on the basis of the fraudulent misrepresentations made to the first and second plaintiffs and defendants 3 to 8, an alleged deed of partition was got executed on 5.8.1983, again taking fraudulent advantage of the said innocent and ignorance of the plaintiffs and defendants 2 to 8, resulting in an unjust, unfair, unequal and fraudulent partition of the schedule properties. The plaintiffs and defendants 3 to 8 were never told by the defendants 1 and 2 that it was a partition deed which was got executed on 5.8.1983 and instead it was misrepresented as on earlier occasion that their signatures were necessary on the document for proper management of the properties and the estate of late K. Srinivasasalu." 16. Respondents, however, in their written statement denied and disputed the averments made in the plaint. They raised various contentions including the maintainability of the suit as also the question of limitation. It was categorically stated that the suit properties were acquired by Sreenivasulu out of the properties allotted to him in the family partition amongst his brothers dated 22nd June, ....
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....deeds of lease have come into existence in February, 1985, the suit filed in 1990 without praying for cancellation of the deed of partition was not maintainable. On the said findings, the suit was dismissed. 18. However, it was held that plaintiff Nos. 1 and 2 along with defendant Nos. 3 to 8 and defendants 1 and 2 were entitled to the share of 1/33 each in Item No. 2 of the suit schedule properties. 19. Appellants preferred an appeal there against. Before the High Court an application was filed under Order VI Rule 17 read with Section 151 of the Code of Civil Procedure praying for the following amendments in the plaint :- "1. To Add at the end of para 5: It is learnt that two other properties belonging to our father are also available for partition which are required to be included in the plaint schedule as item Nos. 5 and 6, as otherwise the suit might become bad for partial partition or it might necessitate avoidable multiplicity of proceedings. 2. To add the following as item Nos. 5 and 6 after item No.4 of the plaint Schedule. 5. Site bearing No.1 suburb Rajajinagar, Bangalore admeasuring east-west 140 feet and north-south 336' + 350'/2 and bounded....
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....fraught with the elements of fraud and mis-representation, no reliance could have been placed thereupon nor the plaintiffs-appellants could be said to have voluntarily made admissions in the said pleading. iii) As the deed of partition and the deed of relinquishment were void ab initio being hit by Section 25 of the Indian Contract Act, it was not necessary to pray for any relief for setting aside the said deeds. iv) The partition deeds as also the deed of relinquishment were void being hit by Section 25 of the Indian Contract Act as for the said purpose passing of adequate consideration was necessary, love and affection being not the requisite consideration therefor. The partition of the properties being unfair and unequal, reopening of the partition is permissible, wherefor also it is not necessary to seek cancellation of the documents. (v) In the event it be held that it is not necessary to seek declaration of the deed of partition and deed of release being void, Article 65 or Article 110 of the Schedule appended to the Limitation Act would be attracted and not Article 59 thereof. (vi) As there is a mis-representation in regard to the nature of the document as the....
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....the respondents have produced the said document, which being a registered one, may be taken into consideration. iv) Institution of the partition suit in the year 1992 being not in dispute, and the factum of partition entered into between K. Sreenivasulu and his brothers having been stated therein, there is no reason as to why 1957 partition should not have been believed by the courts below. v) In view of the fact that co-parcenary consisted of K. Sreenivasulu, the respondent Nos. 1 and 2 and his three sons through his second wife Venkatalakshamma, it was permissible for the parties to partition the properties half and half between two branches, which per se was not an illegal transaction. vi) The fact that Venajakshi had relinquished her share and ten items of properties had been jointly sold in respect whereof no accusation had been made as against the respondents, the partition of the properties consisting of four houses must have to be considered in the said back drop of events, particularly the fact that they are not the subject matter of challenge. vii) The conduct of the parties, i.e., three amongst eight sisters did not claim any share and only one sister h....
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.... K. Sreenivasulu being son of Kasetty Rangappa used to do business in partnership. There were some joint family properties. The business was a joint family business. There exists a presumption in law that a family holding joint properties and joint business would constitute a joint family. In Mst. Rukhmabai v. Lala Laxminarayan and Others [1960 (2) SCR 253], this Court held: "There is a presumption in Hindu law that a family is joint. There can be a division in status among the members of a joint Hindu family by refinement of shares which is technically called "division in status", or an actual division among them by allotment of specific property to each one of them which is described as "division by metes and bounds". A member need not receive any share in the joint estate but may renounce his interest therein, his renunciation merely extinguishes his interest in the estate but does not affect the status of the remaining members vis-a-vis the family property. A division in status can be effected by an unambiguous declaration to become divided from the others and that intention can be expressed by any process..." Even after the dissolution of the partnership, the fact ....
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....inghania and Others [(2006) 4 SCC 658], this Court held: "43. The concept of "family arrangement or settlement" and the present one in hand, in our opinion, should be treated differently. Technicalities of limitation, etc. should not be put at risk of the implementation of a settlement drawn by a family, which is essential for maintaining peace and harmony in a family. Also it can be seen from decided cases of this Court that, any such arrangement would be upheld if family settlements were entered into to allay disputes existing or apprehended and even any dispute or difference apart, if it was entered into bona fide to maintain peace or to bring about harmony in the family. Even a semblance of a claim or some other ground, as say affection, may suffice as observed by this Court in Ram Charan Das v. Girjanandini Devi" [See also Govt. of A.P. and Others v. M. Krishnaveni and Others (2006) 7 SCC 365 and Ramdev Food Products (P) Ltd. v. Arvindbhai Rambhai Patel (2006) 8 SCC 726] 25. One of the grievances raised by Mr. Chandrasekhar is that the original deed of partition 22nd July, 1957 was not produced. It was, however, a registered document. A perusal of the averments made i....
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....lear recital was made therein that she had agreed to relinquish her interest. The power of attorney was being executed pursuant thereto. Mr. Chandrasekhar has drawn our attention to the statements made in the power of attorney to contend that no other or further agreement was entered into and the power of attorney should have been preceded by a regular deed. In our opinion, it was not necessary. Relinquishment may be unilateral. A sister relinquishing her right in favour of the brothers may do so in various ways. Expression to that effect may be made in several ways. 29. A power of attorney need not disclose the purpose for which the relinquishment is made or the consideration thereof. Another power of attorney was executed by Defendant No. 4 in favour of Singaramma to enter into a deed of partition. It was not produced. But, the said power of attorney concededly had nothing to do with the said property. It was in respect of other business. Defendants - Respondents rely thereupon only to show that for the purpose of better management of the properties and business, the sisters used to execute power of attorneys. They knew about the nature and character of the said documents. ....
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....ill business. He is also one of the partners in Singaramma Flour Mills, Bangalore. (v) One of the sisters of the plaintiff, viz., Defendant No. 8 was a Science graduate from Mount Carmel College. Ranganayakamma although made an attempt to show that she had not signed any power of attorney but accepted that once she had signed some power of attorney. It is accepted that the power of attorney was executed at Cuddapah, her own place. (vi) From the deposition of the appellants it would further appear that they had accepted that the documents had been executed either in the office of the advocates or at Cuddappah, which is their place of residence in presence of their own advocates and/or they had visited the registration office and put their signatures/thumb impressions before the Registrar, no case of fraud or mis-representation has been made out. (vii) She had been going to the Sub-Registrar's office as also to the offices of the Advocates. The power of attorney was signed in the Chamber of the Advocates. She accepted that her mother had been given one- third share in Item No. 2 properties. She accepted her signatures in the power of attorney dated 20.12.1983 and the sig....
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....The Schedule appended to the Limitation Act, as prescribed by the articles, provides that upon lapse of the prescribed period, the institution of a suit will be barred. Section 3 of the Limitation Act provides that irrespective of the fact as to whether any defence is set out or is raised by the defendant or not, in the event a suit is found to be barred by limitation, every suit instituted, appeal preferred and every application made after the prescribed period shall be dismissed." In Mst. Rukhmabai (supra), this Court held: "In unraveling a fraud committed jointly by the members of a family, only such letters that passed inter se between them can give the clue to the truth..." Yet again in A.C. Ananthaswamy v. Boraiah [(2004) 8 SCC 588], this Court categorically laid down that in establishing alleged fraud, it must be proved that the representation made was false to the knowledge of the party making such representation or that the party could have no reasonable belief that it was true. Level of proof required in such a case was held to be extremely high. 34. Another aspect of the matter cannot also be lost sight of. Order VI, Rule 4 of the Code of Civil Procedure r....
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....cluding the said deed of partition was executed with the knowledge that they had been signing the deed of partition and no other document. This has categorically been stated by the plaintiff No. 1 Kanthamma in her evidence which we may notice in the following terms: 1. "Each of the sisters have been given one rupee and signatures were obtained on partition deed on 5.8.1983" 2. "I had gone to Sub-Registrar's office at the time of registration of the said partition deed. Sub-Registrar did not explain the contents of the said partition deed. 3. "I do not remember the date on which I affixed my signature on partition deed. We all the sisters and mother had gone to Sub- Registrar's Office at the time of registration of the partition deed." They were, therefore, aware that the deed in question was a deed of partition. They admitted that they had put their signatures before the Sub-Registrar and no where else. Their statements appear to be far- fetched and beyond the ordinary human conduct. If a plea was to be raised and evidence was required to be addressed that there had been a fraudulent misrepresentation as regards the character of partition deed (Exhibit D-6) a....
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....ff is bound to give particulars of the cases where he relies on misrepresentation, fraud, breach of trust, etc." 39. Strong reliance has been placed by Mr. Chandrasekhar on a decision of the Orissa High Court in Sundar Sahu Gountia and others v. Chamra Sahu Gountia and others [AIR 1954 Orissa 80], wherein it was opined: "12. The principles deducible from a consideration of these authorities may be summarised as follows : (i) To constitute a valid family arrangement the transaction should be one which is for the benefit of the family generally. (ii) The consideration for the arrangement may be preservation of the family property, preservation of the peace and honour of the family, or the avoidance of litigation. (iii) It is not essential that there should be a doubtful claim, or a disputed right to be compromised. If there is one, the settlement may be upheld if it is founded on a reciprocal 'give and take and there is mutuality between the parties, in the one surrendering his right and in the other forbearing to sue. In such cases the Court will not too nicely scrutinise the adequacy of the consideration moving from one party to the other. (iv) In any case, if....
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....d to have any application whatsoever. 40. It is also not a case where the settlement was contrary to any statutory provision or was opposed to public policy as envisaged under Section 23 of the Indian Contract Act. If the principle ex turpi causa non oritur actio is to be applied in respect of the consent decree, the matter might have been different. The court shall apply the statute for upholding a compromise unless it is otherwise vitiated in law. It is not required to go into the question as to whether the contents of the said settlement are correct or not. Only in a case where fraud on the party or fraud on the court has been alleged or established, the court shall treat the same to be a nullity. Fraud, as is well known, vitiates all solemn acts. [See Ganpatbhai Mahijibhai Solanki v. State of Gujarat and Ors., 2008 (3) SCALE 556] but the same must be pleaded and proved. 41. We may now consider the submission of Mr. Chandrasekhar as to what is meant by `release'. Reliance has been placed on De'Souza's Conveyancing, page 1075, wherein it has been stated: "A deed of release does not create title. A release may be drafted in the same form as a deed of transfer ....
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....n adduced. No ground has been taken even in the memo of appeal before the High Court. The validity of the partition deed (Ex. D-6) by reference to the recitals of the release of shares by the daughters of Sreenivasulu has not been questioned. 45. Renunciation in the Indian context may be for consideration or may not for consideration. This has been so held by this Court in Kuppuswamy Chettiar v. A.S.P.A. Arumugam Chettiar and Another [(1967) 1 SCR 275] in the following terms: "In the present case, the release was without any consideration. But property may be transferred without consideration. Such a transfer is a gift. Under Section 123 of the Transfer of Property Act, 1882, a gift may be effected by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses. Consequently, a registered instrument releasing the right, title and interest of the releasor without consideration may operate as a transfer by way of a gift, if the document clearly shows an intention to effect the transfer and is signed by or on behalf of the releasor and attested by at least two witnesses. Exhibit B-l stated that the releasor was the owner of the properties. I....
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....on 25 of the Indian Contract Act contains several exceptions, that is to say : (i) if it is in writing; (ii) if it is registered or (iii) if the same has been executed on account of love and affection. The deed of partition is both in writing and registered. One of the questions which had been bothering this Court is as to whether a document had been executed out of love and affection or not. The fact that the parties are near relatives is not in dispute. The love and affection of the sisters on the brothers has categorically been accepted by Plaintiff No. 1 Kanthamma in her deposition, stating: "In the house of defendants 1-2 whenever there is a function, as our father died and since we had more affection and faith on defendants 1-2, we used to sign the documents without going through the contents." 48. The deed of partition could have also been entered into by way of family arrangement where no registration was required. Such a course of action had not been taken. The parties knew the nature of the document. Appellants and other sisters being highly educated were supposed to know the contents thereof. Their husbands are well-off in the society. The transaction, therefore, w....
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....t have been applied in the Indian Contract Act. "Consideration" has been defined in Section 2(d) of the Indian Contract Act, which reads as under: "(d) When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise;" 51. Consideration even in the Indian context would mean a reasonable equivalent or other valuable benefit passed on by the promiser to the promise or by the transferor to the transferee. Love and affection is also a consideration within the meaning of Sections 122 and 123 of the Transfer of Property Act. 52. In Mt. Latif Jahan Begam v. Md. Nabi Khan [AIR 1932 Allahabad 174], the Allahabad High Court rightly held that a question in regard to the adequacy of consideration for the purpose of attracting Section 25 of the Indian Contract Act is a mixed question of fact and law and not a pure question of law stating: "...The question did not involve a mere point of law. It required the determination of a question of fact, viz., whether the agreement was made on a....
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.... 3. Exhibit D-14 dated 16-2-1985, Registered lease deed by Plaintiff No. 1 referring to Exhibit D-6 and also two other registered lease deeds by Defendants Nos. 1-8 and Plaintiff No. 2. 4. Exhibit D-19 to D-22 rent receipts having received rents by the sisters. 55. As regards, Power of Attorney executed by Ranganayakamma Plaintiff No. 2. It appears that there were three such documents, viz. : 1. Ex. D - 9 is a Special Power of Attorney executed at Cuddappah appointing K.S. Prakash to execute lease deed with respect to 1/11th of 1/3rd share of mother's share. It was attested by T.S. Ranganaikalu and N.K. Swamy, Advocates. 2. Ex. D - 10 is a Power of Attorney dated 20.12.1983 executed at Cuddappah appointing K.S. Prakash relinquishing her share in M/s. Singaramma Flour Mills. It was attested by T.S. Ranganaikalu and N.K. Swamy, Advocates. 3. Ex. D-11 is an affidavit of Ms. Ranganakayamma stating on oath that Ex. D-9 is valid and subsisting. It was attested by R.V. Prasad, Advocate. 56. It may be true that there is nothing on record to show that a lease deed was executed by other plaintiff but then there is nothing to show that she was not aware thereof. If sh....