TaxTMI 
TaxTMI 
TaxTMI 
2008 (5) TMI 635
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..... 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 business either by himself or as a `Karta' of the joint family in s....
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.... 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 into a compromise, i.e., amongst the children of the first and the second wives. Bo....
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....aging 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. 3. The parties of the Third, Fourth, Fifth, Sixth, Seventh, Eight, Ninth and Tenth parts do hereby ....
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.... 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, 1957. It was furthermore contended that the relinquishment of interests by the appellants and other sisters were out of....
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....aintainable. 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 on the east by vacant land, west by T.B. Road, north by road and south by site No.1/A. 6. Vacant site bearing No.17-B, Industrial suburb, Bangalore, measuring on....
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....e 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 deed of partition ultimately turned out to be a deed of relinquishment and even otherwise, the same was opposed to public policy as contained in Section 25 of the Contract Act,. Article 59 of the Li....
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....ntered 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 having filed her written statement supporting the case of the appellants, two others merely had adopted the said written statement was a relevant factor which has rightly been taken into consideration by the courts below. However, d....
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.... 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 that it had all along been treated as a joint family property by both the branches of K. Sreenivasulu through his two wives Singaramma and Venkatalakshamma is evident as they were the subject matter of the O.S. No. 2459 of 1982. The fact that in t....
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....e 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 in the plaint categorically goes to show that the partition referred to therein by and between K. Sreenivasulu and his brothers related to the partition effected in 1957. The plaintiffs - appellants were, thus, aware thereof. They did not contend in the plaint t....
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....eement 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. They never stated that any fraud or misrepresentation had been practised in regard to the character of the document; the effect whereof we would discuss a little later. 30. Coming now to the deed of partition, admittedly, one-third share in Item No. 3 had been given to ....
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....orney 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 signature of her Advocate Mr. T.S. Ranganaikalu which was marked as Exhibit D-9. (viii) It is also accepted that after the death of her father she had been given 1/11th in Item No.2 of Schedule property. (ix) One of the documents was attested by Mr. T.S. Ranganaikalu and Mr. N.K. Swamy, Ad....
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.... 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 reads as under: "4. Particulars to be given where necessary In all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence, and in all other cases in which particulars may be necessary beyond such as are exemplified in the forms aforesaid, particulars (with....
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....ere 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) and in absence of any particulars having been furnished as regards alleged fraud and misrepresentation, the said deeds would not be void but only voidable. 38. We are, however, not oblivious of the decisions of this Court and other High Courts that illegality of a contract need not be pleaded. But, when a contract is said to be voidable by rea....
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....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 such an arrangement has been acted upon the Courts will give effect to it on the ground of estoppel or limitation and the like. (v) A family arrangement may also be upheld if the consideration moves from a third party. (vi) If it appears to the Court that one party has taken undue advantage of the helplessness of the other and there is no sacrifice of any right or int....
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.... 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 or simply as a deed poll or a deed to which both parties may join stating the circumstances under which the release is based. Either the monetary consideration or "the premises", i.e., facts in consideration of which the release is made shall be stated." 42. Our attention has also been drawn to essentials of `release' from the said treatise, which are as under: "(i) Full recitals of the o....
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....ugam 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. It showed an intention to transfer his title and its operative words sufficiently conveyed the title. The instrument, on its true construction, took effect as a gift. The gift was effectively made by a registered instrument signed by the donor and attested by more than two witnesses." The said principle has been noticed by a Full Bench of the Madras High Court in Chief Controlling Revenue Authority, Referring Offi....
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....r 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, was transparent. Furthermore, the mother was alive. She was also a party to the deed of partition. She must have played a pivotal role. She even if suffering from illness might be anxious to see that family properties are settled. Release by an heir other than a co-parcenar does not need any consideration. A release is valid even without consideration. 49. Mr. Chandrasekhar, however, has drawn our attention to Anson's Law of ....
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....en 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 account of natural love and affection. The Court below was not justified in recording a finding that the plaintiff had not proved that there was any affection between herself and her father in law. There was no occasion in this case for the plaintiff to offer any proof on a point which was not raised at the trial. We are of opinion that the learned District Judge has erred in entertaining and giving effect to this plea." Yet again in Gauri Shanker....
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....pointing 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 she had not been paid her share from the rental income, she had not prayed for mesne profit. 57. We may now consider the question of limitation raised by Mr. Chandrashekhar. Applicability of Article 65 or Article 110 of the Limitation Act, on the one hand, and Article 59 thereof, on the other, would depend upon the factual situation involved in a case. Article 59 reads as under: "59. To cancel or set aside an Three years When the facts entitling the ....