TaxTMI 
TaxTMI 
2015 (8) TMI 1111
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.....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, C....
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....kherjee 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 si....
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.... 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 Societi....
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....ce 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, ....
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....ukherjee 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 Kalp....
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....sfer 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....
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....tima 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 her....
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....ha 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 wo....
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....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 ....
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....herjee 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....
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....5. 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 ....
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....engal 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 bee....
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....ma, 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 pleadin....
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....s 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 executan....
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....d 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 ....
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.... 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 Prat....
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....onally 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 ....
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....o, 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....
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....t 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....
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.... 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 mone....
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.... 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 ....
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....nce 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....
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....volved 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 ....
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....on 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 ....
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....992 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 Direct....
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....atima 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 Arbit....
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.... 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-....
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.... 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....
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....trator, 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 ju....
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....hip 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. Referen....
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.... 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 trans....
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.... 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 t....
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.... 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 a....