TaxTMI 
TaxTMI 
2019 (10) TMI 1567
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.... Second Defendant was transposed as the Plaintiff. 3. According to the Plaintiff, the Suit 'A' Schedule property that stands in the name of the First Defendant and it was allotted to him by the Tamil Nadu Housing Board. As regards the 'B' Schedule property, it is claimed that the property was assigned by the Government to her husband C.M. Sundararaj, who paid the consideration even during his life time. After his death on 23.1.1979, the Sale Deed came to be executed by the Small Industries Development Corporation on 2.3.1995 in the name of the First Defendant on the basis of Consent Affidavits executed by the Plaintiff and the Second Defendant. The Schedule 'C property stands in the name of the Plaintiff. She had purchased it on 3.8.1999. The funds for the said purchase came out of the sale of the property that belonged to Late C.M. Sundararaj at Besant Nagar. The Suit 'D' Schedule property was actually purchased in the name of the First Defendant. The First Defendant however, executed a Settlement Deed in favour of the Plaintiff on 3.6.1994. It is the claim of the Plaintiff that all the properties were purchased out of the income from the 'B'....
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.... property namely, the undivided share was acquired by the Government and the Compensation was deposited into Court. The enhanced Compensation was paid to the First Defendant in the form of RBI Bonds worth ' 5,00,000 have been deposited in the custody of the Court. The First Defendant had also denied the claim of the Plaintiff over the 'B' Schedule property claiming that though the initial allotment made in favour of the father, the Sale Deed came to be executed only in 1994 on the basis of the Consent Affidavits. The claim of the Plaintiff that ' 92,000 was paid out of the Sale proceeds of her Sridhana properties was denied by the First Defendant. The Second Defendant, who is the daughter, supported the case of the Plaintiff and also sought for Partition and separate possession on her 1/3rd share. 7 . Pending the Suit, the Plaintiff died on 10.1.2005 and the Second Defendant was transposed as Second Plaintiff. She also claimed that the original Plaintiff namely, her mother had left a Will bequeathing certain properties to her. She had also appointed an Executor and the Executor had taken steps for grant of probate for the said Will. Since the First Defendant oppo....
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....dant? (iv) Whether the property in 'C' Schedule has been acquired from and out of the sale proceeds of the Besant Nagar Property belonging to the late C.M. Sundararaj? (v) Whether the alleged Family Arrangement, dated 1.6.1994 got executed by the 1st Defendant is ab initio void and non-est in law for the reason that it was executed by the 1st Plaintiff under coercion, duress and undue influence? (vi) Whether the sale by the First Defendant of portions of the 'B' Schedule property to the Defendants 3 & 4 are not binding on the Plaintiffs? (vii) Whether the Plaintiffs are entitled to the relief of Partition of the properties found in Schedules 'A' to 'D' of the Plaint? (viii) Whether the prayer that the Family Arrangement is void, is barred under Article 58 of the schedule of Limitation Act, 1963? (ix) Whether the prayer for Partition is consequential of getting the declaration that the Family Arrangement is void? (x) Whether the claim of the First Plaintiff in respect of the 'A' Schedule property is barred under Section 4 of Benami Transactions (Prohibition) Act 1988? (xi)....
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....of the lands at Vada Perumbakkam namely, 'D' Schedule property in favour of the Plaintiff. (ii) The Plaintiff would claim that the document, dated 1.6.1994, which is styled as Family Arrangement is invalid for more than one reason. According to her, the document, being a document which creates an interest in presenti in immovable property, the same is void and unenforceable, as it is neither stamped in accordance with law nor registered. The Plaintiff was also coerced and forced to sign the said document, since the document emanated out of coercion and undue 19-08-2023 influence the same is invalid. The First Defendant had not performed the obligations that were cast upon him under the said instrument. The First Defendant had not paid either Maintenance, Medical Expenses or the Travel Expenses as agreed to. (iii) Mrs. Chitra Sampath, learned Senior Counsel appearing for the Second Plaintiff would vehemently contend that the document namely, the Family Arrangement, dated 1.6.1994 is inchoate instrument. Drawing my attention to the copy of the said Family Arrangement that has been produced as Ex. P16, Mrs. Chitra Sampath, learned Senior Counsel appearing for....
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.... He should also attend to the problems including the Court cases of the Factory. The Plaintiff should be informed about all the affairs of the factory and she would be in charge of the Financial matters. After the marriage of the Second Defendant, the Plaintiff and the Second Defendant should transfer their right over the 'B' Schedule property in favour of the First Defendant to confirm his ownership of 19-08-2023 the same. The flat at Besant Nagar belonging to C.M. Sundararaj should be transferred to the Plaintiff by the Defendants. The piece of land at Thirumullaivoyal, purchased by the father of the Defendants in the name of the Plaintiff should continue to be the property of the Plaintiff. The Plaintiff would be at liberty to gift any property to the Second Defendant. (vi) According to Mrs. Chitra Sampath, the document, dated 1.6.1994 was termed as a Deed of Obligations. It is also claimed that the discussions, which took place in the family, were written in an Agreement form by the husband of the Second Plaintiff, who also happens to be an Advocate. The learned Senior Counsel would also draw my attention to the specific pleading that the document, dated 1.6.19....
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....ring for the Second Plaintiff would also draw my attention to the Judgment of the Hon'ble Supreme Court in Sita Ram Bhama v. Ramvatar Bhma, 2018 (3) MWN (Civil) 206 (SC), wherein, the Hon'ble Supreme Court had held that on Memorandum of Family Arrangement which resulted in relinquishment of the rights of the Legal Heirs in the property of the deceased or the common Ancestor is compulsorily registrable and in the absence of registration and payment of appropriate Stamp Duty, the document cannot be looked into. While helding so, the Hon'ble Supreme Court has observed as follows: "After his death Plaintiff, Defendant and their mother as well as sisters become the Legal Heirs under Hindu Succession Act, 1955 inhering the property being a Class-I heir. The Document, dated 9.9.1994 divided the entire property between Plaintiff and Defendant which document is also claimed to be signed by their mother as well as the sisters. In any view of the matter, there is relinquishment of the rights of other Heirs of the properties, hence, Courts below are right in their conclusion that there being relinquishment, the Document, dated 9.9.1994 was compulsorily registrable under Se....
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....d to take a Xerox copy by concealing her signatures in Ex. P16 in unconvincing. A perusal of the document would show that it does not contain the signature of the Second Plaintiff. Though the document provides for two Witnesses, no Witness has signed. Therefore, the claim of the First Defendant that the Family Arrangement, dated 1.6.1994 is true and valid and acted upon does not merit acceptance. (xiv) It will be pertinent to point out at this juncture that the First Defendant himself had given up the claim based on' the Family Arrangement, dated 1.6.1994. Even in the Written Statement, he had pleaded that a Family Arrangement took place on 10.2.1980 on the first death anniversary of Late C.M. Sundararaj and the document of the year 1994 was executed only as a document of obligations. However, in the Proof Affidavit, the First Defendant would contend that the Family Arrangement, dated 1.6.1994 was acted upon and it was pursuant to the same he had executed the Settlement Deed on 3.6.1994 settling the Vada Perumbakkam property in favour of the deceased First Plaintiff and both the Plaintiffs had executed Consent Affidavits on 2.6.1994 expressing their no objection for ex....
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....perty to Small Industries Development Corporation. It is not in dispute that the conditions of the assignment, dated 28.2.1974 were complied with by C.M. Sundararaj even during his life time and the payments were made by him regularly. However, the Sale Deed in respect of the said Industrial land was executed during the life time of said C.M. Sundararaj. It is also not in dispute that the Sale Deed in respect of the 'B' Schedule property was executed by him. It is the further case of the parties that the Sale Deed could not be executed, since the land in question was not transferred in favour of the Tamil Nadu Small Industrial Development Corporation. (ii) On 2.3.1995, a Sale Deed came to be executed in favour the First Defendant in respect of the 'B' Schedule property. The Sale Deed also records that the entire consideration has been paid by the purchaser in terms of the Assignment Deed, dated 28.2.1974. It is not in dispute that the Assignment made in favour of C.M. Sundararaj and the entire Sale consideration was paid even during the life time of C.M. Sundararaj. The Sale Deed, dated 2.3.1995 (Ex. P18) came to be executed in favour of the First Defendant on th....
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.... Defendant that he had discharged the Mortgage Loan due to Small Industries Development Corporation is also belied by the admission of the First Defendant in his Written Statement wherein, he had stated as follows: "So the outstanding of more than ' 2,00,000 to Small Industries Development Corporation remained unpaid. When Small Industries Development Corporation refused to re-allot the B Schedule property to this Defendant on the ground of unpaid Loan amount, the Plaintiff assured this Defendant that she would sell the house site at Thirumullaivoyal and clear the Loan. This House site was purchased by the father of the Defendants in the name of the Plaintiff. It was not her personal property or Sridhana property as alleged in the Plaint." (iv) It is, however, contended by Mr. D. Krishnan, learned Counsel appearing for the First Defendant that the fact that the husband of the Second Plaintiff and the First Plaintiff had signed* as identifying Witnesses in the Sale Deed, dated 2.3.1995 marked as Ex. P18 would go to show that there was consensus between the parties to the effect that the 'B' Schedule property should be absolutely owned by First Defendant. This....
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....e learned Counsel appearing for the First Defendant. It is the case of the Plaintiffs that though the Sale Deed was taken in the name of the First Defendant, the First Defendant holds in trust for the other heirs of C.M. Sundararaj. It is not a case, where the Plaintiffs seek a Declaration of the title to the property or recovery of possession of the property alleging that a document, which confess title is invalid. It is a settled position of law that the relief of setting aside the document would arise only in a case where the Plaintiffs seek to invalidate the Title, which had vested in a person, who is shown as Purchaser under the document. That is not the case on hand. The Plaintiffs seek partition on the ground that the Defendant holds the property in trust on their behalf also. Therefore, prayer for setting aside the document is not required. If the document is set aside, neither the Defendant nor the Plaintiffs would get title. The property will revert back to the Owner namely, Tamil Nadu Small Industries Development Corporation. Therefore, the plea that a Decree for Partition cannot be passed unless the document is set aside is liable to be rejected. Hence, Issue No. 3 is a....
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....ar 1980. Therefore, according to him, he had paid the initial cost of ' 31,300 and the monthly instalments at ' 931 for the 'A' Schedule property out of his own income. In support of her claim that the monthly instalments payable for the 'A' Schedule property were paid from and out of the income from the 'B' Schedule property, the First Plaintiff would rely upon the Lease Deeds namely, Ex. P12, dated 1.11.1989 and Ex. P61 dated 31.1.1990 executed by the deceased First Plaintiff leasing out the 'B' Schedule property to Third parties, apart from showing that it was the First Plaintiff, who was effectively controlling the business till 1994. These documents would also show that there was sufficient Rental Income from the 'B' Schedule property. (iv) Mr. D. Krishnan, learned Counsel appearing for the First Defendant would however contend that it was the First Defendant who was running the business in the 'B' Schedule property. He would also rely upon the Exs. D6, D7 & D8 to show that he was in fact carrying on business in the name and style of SJS Engineering Services at the 'B' Schedule property with one N. Vinayagam, C....
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....it Society and others. She has also complained that the First Defendant is collecting the Rents from the tenants and he has not paid dues payable to Oriental Benefit & Deposit Society. On 24.3.1999, the First Plaintiff had sent a telegram to her brother-in-law namely, Varadarajan complaining that the First Defendant is threatening to assault her. Similarly, in Exs. P32 to P36, the First Plaintiff had sent several Letters and Telegrams to the First Defendant either seeking Maintenance or complaining about his inaction in non-payment of the Loan. The First Defendant has not denied the contents of any of these Letters. These Letters would show that the First Plaintiff had paid the monthly instalments for purchase of the 'A' Schedule property from and out of the income from the 'B' Schedule property. It is therefore, clear that the 'A' Schedule property also has to be treated as part of the estate of C.M. Sundararaj. (vi) Accordingly, the Issue No. 1 is decided in favour of the Plaintiff and against the First Defendant to the effect that the funds for the purchase of 'A' Schedule property were provided by the First Plaintiff and income from the 'B....
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....perty has been provided or paid out of the known sources of the Hindu Undivided family; (ii) a person standing in a fiduciary capacity for the benefit of another person towards whom he stands in such capacity and includes a Trustee, Executor, Partner, Director of a Company, a Depository or a Participant as an Agent of a depository under the Depositories Act, 1996 (22 of 1996) and any other person as may be notified by the Central Government for this purpose; (iii) any person being an individual in the name of his spouse or in the name of any child of such individual and the consideration for such property has been provided or paid out of the known sources of the individual; (iv) any person in the name of his brother or sister or lineal ascendant or descendant, where the names of brother or sister or lineal ascendant or descendant and the individual appear as joint-owners in any document, and the consideration for such property has been provided or paid out of the known sources of the individual; or (B) a transaction or an arrangement in respect of a property earned out or made in a fictitious name; or (C) a transaction or an arrangement in respect o....
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....) On the other hand, the documentary evidence available clearly shows that it was the First Plaintiff, who had paid the initial deposit of ' 31,300 as well as the monthly instalments at ' 931. In fact, even in the letter marked as Ex. P29 dated 23.9.1998, the, First Plaintiff had very clearly pointed out that the 'A' Schedule property was purchased out of her own monies and the income from the 'B' Schedule property. The available evidence very clearly indicates that the case of the Plaintiff that the property was purchased by her from and out of the income from the 'B' Schedule property is more probable and acceptable. Once it is concluded that the property was purchased from and out of the income from the estate of C.M. Sundararaj and monies that belonged to the First Plaintiff in the name of the First Defendant, the transaction may not take the colour of a Benami Transaction as defined under Section 2(9) of Prohibition of Benami Property Transaction Act, 1988 as amended by 43 of 2016. (v) As already seen Section 2(9)-A(b)(i), exempts a transaction between persons, who stand in a fiduciary capacity towards the other from being termed as a Benami ....
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.... purchase of 'C Schedule property in the name of the First Plaintiff. (ii) In the light of evidence, it is clear that though the property stands in the name of the First Plaintiff she was not the absolute Owner of the said property. Since the entire consideration for purchase of the said property came out of the estate of C.M. Sundararaj and therefore the Plaintiffs and the First Defendant would have an equal share in the Suit property. Therefore, Issue No. 4 is answered in favour of the Plaintiffs and against the First Defendant. 18. Issue No. 7: As regards the 'D' Schedule property, this is not in dispute that the 'D' Schedule property stood in the name of the First Defendant and the First Defendant had executed a Settlement Deed in favour of the Plaintiff on 3.6.1994 settling the 'D' Schedule property on her. The fact that the Settlement Deed executed by the First Defendant in favour of the Plaintiff is not in dispute. It is seen from the Ex. P17, dated 3.6.1994 namely, the Settlement Deed executed by the First Defendant in favour of the First Plaintiff that the 'D' Schedule property was purchased in the year 1993 under a registered S....
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....ing point of limitation to obtain a declaration with reference to a particular document is the date of the document. The starting point is when the right to sue first accrues. Though the document was executed in 1994, things were going well till about 1998 and it was only when the First Defendant showed his true colours and started illtreating the First Plaintiff, the First Plaintiff came to know the effect of the instrument executed by her. (iii) Mrs. Chitra Sampath, learned Counsel appearing for the Second Plaintiff would contend that the document being an inchoate instrument, which is admittedly not signed by the Second Plaintiff is a nullity and in fact no prayer is necessary to set aside the said document. The Second Plaintiff can maintain the Suit for Partition even without a prayer for, declaration, since she is not a Signatory to the instrument. On the death of the First Plaintiff, the Second Defendant has been transposed as the Second Plaintiff. As of today, the Suit is by the Second Plaintiff. I have found that the Second Plaintiff is not a signatory to the impugned Family Arrangement, dated 1.6.1994 and therefore, the question of limitation really fades into insignifi....
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....or getting it prohibited and T.O.S. No. 33 of 2008 is already pending in this Court. Therefore, the question of Section 211 of the Indian Succession Act, operating as a bar for the claim of the Second Plaintiff cannot be accepted, in view of the fact that the Second Plaintiff claims interest in the property as Class-I Heir of Late C.M. Sundararaj, who died intestate. Therefore, the Second Plaintiff is well within her rights to prosecute the Suit as heir of C.M. Sundararaj. Hence, Issue Nos. 12 & 13 are also answered in favour of the Plaintiffs and against the First Defendant. 22. In the light of the answers to the issues above, the Suit in C.S. No. 402 of 2001 will stand decreed declaring the Family Arrangement, dated 1.6.1994 as void, ab initio and non-est in the eye of law, declaring the sales made by the First Defendant in favour of the 3rd & 4th Defendants would not bind on the Plaintiff share in the Suit 'B' Schedule property. The property sold by the First Defendant to the 3rd Defendant would be allotted to the share of the First Defendant. There will be Preliminary Decree declaring the 1/3rd each share of the Plaintiffs 1 & 2 in the Suit 'A' to 'D'....
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.... examined as PW2. He has deposed categorically to the effect that he had typed the Will and Mrs. Chandra Sundararaj, the Testator, signed in his presence and in the presence of the other Attesting Witnesses namely, P. Harikrishna. It is not as if the Attesting Witness is stranger to the family. He is the sister's son of Chandra Sundarsraj. Therefore, he is the Cousin of the First Defendant. The other Attesting Witness is his brother. Though PW2 has been crossexamined extensively, nothing has been brought about to discredit his evidence regarding the execution of the Will and the presence of PW2 and the other Attesting Witness at the time of execution of the Will. 26. No doubt, there are certain discrepancies in the evidence regarding the filling up of the date and the presence of PW1 at the time when the Will was executed. The Will was executed some time in 2004 i.e., on 19.4.2004 and the Witness deposed in Court some time in 2018 that is 14 years after execution. There is bound to be some discrepancy in the evidence. Mr. D. Krishnan would also point out the discrepancies in the evidence of PW1 regarding his presence or absence at the time of the execution of the Will. The E....