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2020 DIGILAW 194 (CAL)

Joy Prakash Law v. Rajendra Kumar Rathi

2020-02-11

DEBANGSU BASAK

body2020
JUDGMENT Debangsu Basak, J. - The Court: In a suit for declaration and perpetual injunction as also recovery of possession and damages, the plaintiff seeks interim protection. 2. In the suit, the plaintiff assails instrument dated March 3, 1971 as rectified on April 26, 1971, instrument dated December 14, 1973, instrument dated August 30, 2002 and the instrument dated September 25, 2017 as being vitiated by undue influence and, therefore, null and void. 3. Learned Senior Advocate appearing for the plaintiff submits that, the father of the plaintiff was the owner of an immovable property. The immovable property comprises of about 38 cottahs of land. It is located at a prime part of Kolkata. The father of the plaintiff executed a deed of lease in favour of the defendant no. 1 for 62 years in respect of 30 cottahs out of 38 cottahs on March 3, 1971. Such lease was supposed to come to an end on February 28, 2033 by efflux of time. The lease rental was a paltry sum of Rs.1,000/- which was to be increased periodically. Given the location and the area of the property, the lease rental was dismal. He submits that, the lease was for 30 cottahs of land although the land comprised of 38 cottahs of land. There is no document with regard to 8 cottahs of land. However, the defendants are in occupation of the entirety of the 38 cottahs of land. He submits that, there is a deed of rectification dated April 26, 1971 executed by the father of the plaintiff. The father of the plaintiff gifted the property in favour of the plaintiff on December 18, 2000. However, there was an issue with regard to the stamp duty payable on the deed of gift. After the father of the plaintiff executed the deed of gift and presented the same for registration, the father of the plaintiff purported to execute a deed of extension of the original deed of lease for a further period of 20 years on August 30, 2002. The father of the plaintiff did not have any right to execute such deed as the right, title and interest in respect of the immovable property concerned stood vested with the plaintiff by virtue of the execution of the deed of gift dated December 18, 2000. 4. The father of the plaintiff died on August 21, 2008. The father of the plaintiff did not have any right to execute such deed as the right, title and interest in respect of the immovable property concerned stood vested with the plaintiff by virtue of the execution of the deed of gift dated December 18, 2000. 4. The father of the plaintiff died on August 21, 2008. Prior thereto, the mother of the plaintiff died on September 8, 2004. There were various litigations between the parents of the plaintiff and the other family members of the father of the plaintiff. Due to such litigations, the plaintiff was cut off from the family members of the larger law family. The plaintiff is of average intelligence. The defendants took advantage of the circumstances in which the plaintiff was placed in subsequent to the death of the father of the plaintiff. He submits that, the defendant no. 4 caused the plaintiff to execute a deed of sublease dated December 14, 1973. 5. Subsequent to the parents of the plaintiff being died by September, 2008 and the sister of the plaintiff dying on March 17, 2011, the defendants made representations to the plaintiff that, the plaintiff would receive a sum of Rs.7 Crores in the event the plaintiff executes documents as per the direction of the defendants. Relying upon such representation, the plaintiff executed a deed of lease dated September 25, 2017. Subsequently, the plaintiff discovered through the assistance of his nephew that the documents which the plaintiff seeks declaration as being void, were vitiated by undue influence. 6. In support of his contention that the documents are vitiated by undue influence, learned Senior Advocate appearing for the plaintiff relies upon various clauses of the deed of lease dated September 25, 2017. He submits that, out of the consideration of Rs.13 Crores the plaintiff received a sum of Rs.16,42,030/- and a sum of Rs.33,57,970/- paid towards the deficit of the stamp duty in respect of the deed of gift executed by the father of the plaintiff in favour of the plaintiff. According to him, in aggregate, the plaintiff received a sum of Rs.50 Lakhs as against the sum of Rs.13 Crores as stated in the memo of consideration. The balance sum was taken by different parties including the defendant no. 1. 7. According to him, in aggregate, the plaintiff received a sum of Rs.50 Lakhs as against the sum of Rs.13 Crores as stated in the memo of consideration. The balance sum was taken by different parties including the defendant no. 1. 7. Learned Senior Advocate appearing for the plaintiff relies upon Section 16(3) and the second explanation to Section 25 of the Indian Contract Act, 1872 and submits, it is for the defendants to explain how such an instrument came into being with such paltry sum being received by the owner of the property with a person claiming and having lesser rights at the same property receiving Rs. 12.50 crores. He relies upon ( Maharwal Khewaji Trust, Faridkot v. Baldev Dass, (2005) AIR SC 104 ), ( Shyam Sunder Kayal v. Mist Valley Binimoy Pvt. Ltd.,2008 1 CH 900 ) and (Permanent Trustee Company of New South Wales Ltd. & Anr. v. Francis Henry Bridgewater,1937 AIR(Privy Council) 14 ) in support of his contentions. 8. Learned Senior Advocate appearing for the defendant no. 1 submits that, the plaintiff executed the documents knowing fully well the purport thereof. The question of exercising any undue influence does not arise. The property was encumbered with various interests of different persons. He points out that, deed of gift is not under challenge. The plaintiff obtained benefits of the consideration paid by the defendant no. 4. On one hand, the plaintiff utilised a part of the consideration in order to clear the deed of gift and at the same time is challenging the transaction under which he received such consideration. Given the conduct of the plaintiff the challenge is misplaced. He submits that, his client has filed written statement and that the suit is otherwise ready for hearing. Interim protection should not be granted to the plaintiff. He points out the unexplained delay of the plaintiff in approaching the Court. 9. Learned Senior Advocate for the defendant nos. 2 and 3 submits that, his clients are in possession of 30 cottahs of land. He also points out that, initially a suit was filed in December 19, 2017 in which some reliefs were sought for in respect of such property. On January 8, 2018 leave was granted to withdraw such suit with liberty to file afresh. The present suit was filed on March 26, 2018. He highlights the conduct of the plaintiff in the suit. On January 8, 2018 leave was granted to withdraw such suit with liberty to file afresh. The present suit was filed on March 26, 2018. He highlights the conduct of the plaintiff in the suit. He submits that the plaintiff is guilty of unexplained delay in making the present application. Moreover, the application of the plaintiff is bereft of any material warranting grant of an order of injunction. He points out that, the plaintiff was accepting the lease rentals till 2019. The defendant nos. 2 and 3 are out of pocket of the entire consideration of Rs.13 Crores. The plaintiff is not making any attempt to return the consideration money. Consequently, interim order as prayed for should not be granted. 10. Learned Senior Advocate appearing for the defendant Nos. 2 and 3 submits that the claim of the plaintiff that he was not in a position to understand the purport of the documents, is misplaced. He points out the conduct of the plaintiff. He further submits that, the plaintiff is a Managing Director of a family company. The plaintiff is a director in other companies. The plaintiff regularly travels abroad. He approved the draft deed in writing which he subsequently executed on September 25, 2017. Therefore, it cannot be said that the plaintiff did not understand the contents of the deed dated September 25, 2017 or was not aware of the same. 11. In the course of hearing of the application, the Court wanted to know from the defendants as to the persons in occupation of the entirety of the property concerned in this application. 12. In deference to such desire of the Court, learned Senior Advocate appearing for the defendant Nos.2 and 3 submits a statement of occupants of premises No.6A, Pretoria Street, Kolkata. He makes over a copy of such statement of occupants to the learned Advocate for the plaintiff in Court. 13. As noted above, the suit is for declaration and injunction. In the suit, an immovable property of approximately 38 cottahs of land is involved. The suit property is divided into two premises being Nos. 6A and 6B, Pretoria Street, Kolkata. The plaintiff claims that his father was the owner of the two premises. 13. As noted above, the suit is for declaration and injunction. In the suit, an immovable property of approximately 38 cottahs of land is involved. The suit property is divided into two premises being Nos. 6A and 6B, Pretoria Street, Kolkata. The plaintiff claims that his father was the owner of the two premises. The plaintiff claims that, his father executed a deed of lease dated March 3, 1971 in favour of the defendant No. 1 for the 38 cottahs of land for a term of 62 years expiring on February 28, 2033 at a paltry lease rental of Rs. 1,000/- with period increase. His father executed a deed of rectification on April 26, 1971. The property was divided into two parts, namely, premises Nos. 6A and 6B, Pretoria Street, Kolkata. The defendant No. 1 executed a deed of sub-lease in favour of the defendant No. 4 on December 14, 1973 for premises No. 6B, Pretoria Street, Kolkata. A deed of gift was executed by the father of the plaintiff on December 18, 2000 in respect of premises Nos. 6A and 6B, Pretoria Street, Kolkata in favour of the plaintiff. The registration of the deed of gift was not completed at that material point of time due the entirety of the stamp duty not being paid. Registration was completed subsequently on June 28, 2017 after the plaintiff paid Rs. 33,57,970/- having obtained the same in terms of the deed of lease dated September 25, 2017. Despite the father of the plaintiff executing and presenting the deed of gift for registration on December 18, 2000, he executed a deed dated August 30, 2002 in favour of the defendant No. 1 extending the lease by further 20 years. The rent was enhanced to Rs. 6,000/- with 5 per cent enhancement every 5 years. According to the plaintiff, this deed was obtained by the defendant No. 1 by practising fraud upon the father of the plaintiff. According to the plaintiff, on the representation of the defendants, a deed of lease dated September 25, 2017 was executed by the plaintiff without understanding the true purport thereof. The deed of lease is in respect of premises No. 6 at Pretoria Street, Kolkata. The defendant No. 1 is the confirming party in such deed of lease and the defendant No. 1 agreed to surrender his leasehold rights in favour of the defendant No. 2. The deed of lease is in respect of premises No. 6 at Pretoria Street, Kolkata. The defendant No. 1 is the confirming party in such deed of lease and the defendant No. 1 agreed to surrender his leasehold rights in favour of the defendant No. 2. The total consideration in the deed of lease is Rs. 13 crores out of which, the plaintiff received Rs. 50 lakhs only. 14. The plaintiff claims that the four deeds which the plaintiff assails in the suit, are hit under Section 16(3) and Section 25 Explanation 2 of the Indian Contract Act, 1872. According to the plaintiff, the defendant No. 1 was in a position to dominate the will of the father of the plaintiff and the plaintiff and being in such position, caused the father of the plaintiff and the plaintiff to enter into the contracts which the plaintiff assails. Section 16(3) of the Indian Contract Act, 1872 places the burden of proving that the contract entered into between a person who is in a position to dominate the will of another, and where such contract appears on the face of it or on the evidence adduced to be unconscionable, to prove that such contract was not induced by undue influence. Explanation 2 of Section 25 of the Indian Contract Act, 1872 stipulates that inadequacy of a consideration may be taken into account by the Court in determining the question whether the consent of the promisor was freely given or not. 15. In the present case, transactions with regard to an immovable property took place between the plaintiff and the defendants by four several instruments which are subject matter of challenge in the present suit. The last of the transactions is dated September 25, 2017. It is a lease of 99 years with an option for another 99 years. Effectively, it is a sale of an immovable property. The owner of the immovable property is undoubtedly the plaintiff. As the owner, the plaintiff received a sum of Rs. 50 lakhs as against the transaction value of Rs. 13 crores. Persons having lessor rights than the plaintiff in respect of the immovable property received a sum of Rs. 12.50 crores. Prima facie, it appears that, the consideration which the plaintiff received is inadequate. Prima facie, it appears that, the burden of proof lies on the defendants that, the transactions in question are not unconscionable. 13 crores. Persons having lessor rights than the plaintiff in respect of the immovable property received a sum of Rs. 12.50 crores. Prima facie, it appears that, the consideration which the plaintiff received is inadequate. Prima facie, it appears that, the burden of proof lies on the defendants that, the transactions in question are not unconscionable. 16. In the instant suit, the issue as to whether, the four instruments with the plaintiffs speaks of stands vitiated in the manner as claimed by the plaintiff or not requires consideration. As noted above, written statements by all the defendants are on record. In this present application, the Court is not required to pronounce upon any of the issues raised by the parties finally. The plaintiff makes out a prima facie case to go to trial. The plaintiff contends that the document stands vitiated by reasons of Section 16(3) and the second explanation of Section 25 of the Indian Contract Act, 1872. The defendants contend otherwise. The issues raised by the parties, are best finally decided after permitting the parties to lead evidence on such issues. Till such time such issue is finally decided, it would be appropriate to ensure that further alienation of the immovable property concerned does not take place so as to create third party rights over and in respect of the same. 17. The Supreme Court in Maharwal Khewaji Trust, Faridkot (Supra) and the Calcutta High Court, in Shyam Sunder Kayal (Supra) are of the view that, unless and until a case of irreparable loss or damage is made out by a party to the suit, the Court should not permit the nature of the property being changed which also includes alienation or transfer of the property which may lead to loss or damage being caused to the party who may ultimately succeed and may further lead to multiplicity of proceedings. 18. The Privy Council in Permanent Trustee Company of New South Wales Limited and Another (Supra) was concerned with a case where a young man not yet 22 years old, urgently in need of cash and having no relation in the country to guide him, sold his expectant interests to a creditor who already had a powerful grip on him as security for his debt. It was found that, the price fixed between them was by the creditor and that there was no bargaining or inquiry for a better market by anyone on the young man's behalf. In such circumstances, the Privy Council found that such transaction was not a purchase made in good faith and without unfair dealing. The Privy Council held that, in view of the relative position of the parties and the circumstances, it was incumbent on the purchaser to establish affirmatively that the transaction was fair, just and reasonable. The Privy Council found that the purchaser failed to establish the same. 19. In the facts of the present case, at this stage in my view interest of justice will be sub-served by taking on record, the statement of occupants of premises No.6A, Pretoria Street, Kolkata as filed on behalf of the defendant Nos. 2 and 3. The defendant Nos. 2 and 3 are at liberty to evict any person claiming any right, title and interest under the defendant Nos. 2 and 3 in respect of the property concerned. However, in the event, the defendant Nos. 2 and 3 or any of the defendants is to create any interest in respect of any persons other than the persons mentioned in the statement of occupants of premises No.6A, Pretoria Street, Kolkata, such defendant will obtain prior leave of the Court. 20. Old GA No.1032 of 2019, new GA No.6 of 2019 in CS No.42 of 2018 is disposed of accordingly without any order as to costs. 21. There will be cross order for discovery within a fortnight from date. Inspection forthwith thereafter. Affidavit as to documents be filed by the parties within a fortnight from date. The plaintiff will prepare the Judge's Brief of Documents. 22. In the event, the plaintiff does not discover the documents within the time stipulated, the interim protection granted by this order will stand vacated.