Case BriefsHigh Courts

Jharkhand High Court: Rajesh Shankar, J., quashing the impugned letter, held, “The respondent 5 being an administrative/revenue Officer is supposed to know the basic law and he can not be permitted to act without jurisdiction so as to infringe the right to property of the petitioners in an arbitrary fashion.”

Background

The factual background of the case as stated in the writ petition is that the petitioners purchased the said land by virtue of three separate sale deeds and they came in peaceful possession of their respective land. Thereafter, they decided to construct a residential apartment over the same, however, some miscreants started threatening and making demand of ransom from them. Two individuals filed a petition under Section 144 Code of Criminal Procedure, 1973, before the Sub Divisional Officer, Sadar Ranchi, which was registered as Case No. M-2073 of 2019, and, thereafter, the petitioners were restrained by the respondents 5 and 6 from initiating construction work. Ultimately, the Sub-Divisional Officer, Sadar, Ranchi dismissed the aforesaid case vide order dated 22-01-2020. The petitioners then filed a representation dated 31-05-2020 requesting the respondent 6 to maintain law and order situation as the petitioners were apprehending interference of local goons once the construction work was started. However, when the petitioners started construction work in the month of May, 2020, the husband of the petitioner 2 was attacked and threatened by local goons and an amount of 10 lac was demanded as ransom from him which was duly reported to the police, resultantly an FIR was registered. The respondent 5 vide letter no.37/(ii) dated 08-06-2020 directed the respondent no.6 to take steps for stopping the construction work taking place over the said land, as Original Suit No.18 of 2020 was pending in the court of Civil Judge Senior Division-I, Ranchi. The said letter was subsequently handed over to the petitioners by the respondent no.6. Thereafter, the respondent no.6 issued notice dated 09-06-2020 to the petitioners, directing them to stop construction work over the said land till the disposal of the aforesaid suit in the light of the direction issued by the respondent 5 vide letter no.37/(ii) dated 08-06-2020. The present petition is moved to question the authority of the said notices and further for setting aside the same.

Contentions

Counsel for the petitioner, Amritansh Vats, referred to a catena of judgments by the Supreme Court, to emphasize that Right to Property is a Constitutional Right under Article 300-A of the Constitution and the Respondent authority does not possess any power or jurisdiction to arbitrarily restrain the petitioners from enjoying such right. Reliance was placed on;

  • Hari Krishna Mandir Trust v. State of Maharashtra, 2020 SCC OnLine SC 631, In this case, the Supreme Court held that the right to property may not be a fundamental right any longer but it is still a constitutional right under Article 300-A as well as a human right and no person can be deprived of his property save by the authority of law. The High Courts exercising their jurisdiction under Article 226 of the Constitution of India, not only have the power to issue a Writ of Mandamus or in nature thereof, but are duty-bound to exercise such power where the government or public authority has failed to exercise or has wrongly exercised discretion conferred upon it by a Statute, or a rule, or a policy decision of the government or has exercised such discretion with malafide, or on irrelevant consideration.
  • M.C. Mehta v. Union of India, 2020 SCC OnLine SC 648, With respect to the enforceability of Article 300-A, the Court observed, “The law in this behalf is explicit. Right of a person to construct residential houses in the residential area is a valuable right. The said right can only be regulated in terms of a regulatory statute but unless there exists a clear provision the same cannot be taken away.”
  • State of Rajasthan v. Basant Nahata, (2005) 12 SCC 77, In the present case, the Court categorically held, “In absence of any substantive provision contained in a parliamentary or legislative enactment, a person cannot be refrained from dealing with his property in any manner he likes. Such statutory interdict would be opposed to one’s right to property as envisaged under Article 300-A of the Constitution.”
  • State of U.P. v. Manohar, (2005) 2 SCC 126, Supreme Court remarked, in the words,
    “Para 7. Ours is a constitutional democracy and the rights available to the citizens are declared by the Constitution. Although Article 19(1)(f) was deleted by the Forty-fourth Amendment to the Constitution, Article 300-A has been placed in the Constitution, which reads as follows:
    300-A. Persons not to be deprived of property save by authority of law.—No person shall be deprived of his property save by authority of law.
    Para 8. This is a case where we find utter lack of legal authority for deprivation of the respondent’s property by the appellants who are State authorities. In our view, this case was an eminently fit one for exercising the writ jurisdiction of the High Court under Article 226 of the Constitution. In our view, the High Court was somewhat liberal in not imposing exemplary costs on the appellants. We would have perhaps followed suit, but for the intransigence displayed before us.”
  • Delhi Airtech Services v. State of U.P., (2011) 9 SCC 354, A synonymity was drawn between the word ‘law’ as used under Article 21 and under Article 300-A by the Supreme Court, stating, “ Para 83. The expression law which figures both in Article 21 and Article 300-A must be given the same meaning. In both cases, the law would mean a validly enacted law. In order to be valid law it must be just, fair and reasonable having regard to the requirement of Articles 14 and 21 as explained in Maneka Gandhi, (1978) 1 SCC 248. This is especially so, as “law” in both the Articles 21 and 300-A is meant to prevent deprivation of rights. Insofar as Article 21 is concerned, it is a fundamental right whereas in Article 300-A it is a constitutional right which has been given a status of a basic human right.”

Observation

With respect to the alleged arbitrary exercise of power by the Administrative/Revenue Officer “If a suit is filed in any civil court, it is the court concerned which may grant an injunction on an application of the aggrieved person, if it is established that there exists a prima facie case, balance of convenience lies in his favour and if such order is not passed, he would suffer irreparable loss and injury. It is a settled law that mere filing of a suit does not entitle the plaintiff to presume an order of status quo unless the court by a specific order grants the same having taken into consideration the facts, applicable law and judicial pronouncement. The Circle officer has no power or jurisdiction to grant status quo on the mere filing of a civil suit. The respondent 5 being an administrative/revenue Officer is supposed to know the basic law and he can not be permitted to act without jurisdiction so as to infringe the right to property of the petitioners in an arbitrary fashion.”

Decision

Allowing the present petition, the Court quashed the impugned letter no. 37(ii) dated 08-06-2020 issued by the Circle Officer, as well as the letter dated 09-06-2020 issued by the Police Inspector cum officer in charge of the Kanke Police Station, Ranchi.[Sandip Khanna v. State of Jharkhand, 2020 SCC OnLine Jhar 1020, decided on 14-12-2020]


Sakshi Shukla, Editorial Assistant has put this story together

Case BriefsHigh Courts

Chattisgarh High Court: Sanjay K Agrawal J., dismissed the second appeal being devoid of merits.

The facts of the case are such that the plaintiff’s father, Kanhaiya Kori (Defendant 2) purchased the suit property including suit land along with the kutcha house by registered sale deed from one Rajim Bai and he remained in possession and the said kutcha house was constructed by him. Kanhaiya Kori sold the suit property in favour of Madanlal Bharadwaj (Defendant 1) by sale deed dated 21-1-2003. Thereafter, the plaintiff sought decree for declaration of title and permanent injunction stating inter alia that though his father i.e defendant 2 has purchased the suit land in his own name, but sale consideration was paid by him and hence his father had no right and title to alienate the suit property. The trial Court decreed the suit granting decree for declaration of title and permanent injunction in favour of the plaintiff which was reversed by the first appellate Court on appeal being preferred by defendant 1 leading to filing of instant second appeal.

Counsel for the appellants submitted that by the alleged transfer, no title has been transferred in favour of defendant 1, as the plaintiff remained in possession of the suit land and transfer of suit land, which is abadi land, without delivery of possession along with superstructure, no title has been passed and as such, decree passed in favour of the plaintiff would not have been set aside by the first appellate Court.

Counsel for the respondents supported the impugned judgment and decree of the first appellate court.

The case at hand falls under Section 54 of Transfer of Property Act, 1882 which states as under:

“54. “Sale” defined.—‘‘Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.

Sale how made.—Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.

In the case of tangible immovable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.

Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.

Contract for sale.—A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties.

It does not, of itself, create any interest in or charge on such property.”

 The Court thus relied on judgment G. Hampamma v. Kartigi Sajjivalada Kalingappa, 1989 SCC OnLine Kar 135 and observed that It is the case of the plaintiff that possession has not been transferred to defendant 1, therefore, sale is not complete without delivery of possession. Non-delivery of possession does not affect the conveyance of title. What is transferred for consideration is the right of ownership. Right to possession is incidental to right of ownership. One who is a owner can bring an action for recovery of possession. Once the right, title and interest are sold, on payment of sale consideration the person in possession, is either a permissive holder like tenant or a person holding adversely to the interest of true owner. In either event person in possession has no title. Since delivery of physical possession is not an essential ingredient of sale, that circumstance by itself can have no relevance to decide the intention. When title is transferred and the person who has purchased the property has title over the suit property, merely because he has not been given possession, non-delivery of possession could not affect the title of the person who has purchased the property.

The Court thus held that in the present case, by registered sale deed the original defendant 2 has purchased the property and the valid title has been transferred in his favour. Even the plaintiff has not questioned the title of defendant 1 either by seeking a declaration that sale made by defendant 2 as owner in favour of defendant 1 is invalid or void otherwise. Hence, in regard to the observations made above, the first appellate Court is absolutely justified in holding that defendant 1 is the titleholder of the suit land and the plaintiff has no right, title and interest over the suit property and rightly reversed the judgment and decree of the Trial Court.

In view of the above, appeal was dismissed.[Ram Avtar Kori v. Madanlal Bhardwaj, 2020 SCC OnLine Chh 1182, decided on 14-12-2020]


Arunima Bose, Editorial Assistant has put this story together

Case BriefsHigh Courts

Kerala High Court: A.M. Badar J., allowing the present petition, quashes the attachment made by the State authorities to recover tax dues.

Background

Counsel appearing for the petitioner argued that for repayment of loan availed by its borrower, the property comprised in Mannanchery village was mortgaged by the borrower. As the loan account became irregular, by following due process of law, it was declared as Non-Performing Asset and demand notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the SARFAESI Act’) came to be issued on 02-07-2015. Standing Counsel further submitted that as the borrower failed to settle the loan amount by repayment, physical possession of the mortgaged property was taken by the petitioner bank on 30-11-2019. It is to be further noted that, on 22-02-2019, the respondents had attached the said property alleging to have the ‘First Charge’ over the secured assets for recovery of sales tax dues. This act of the State, as per the Standing Counsel, is grossly illegal, arbitrary and misconstrued. Prayer sought by the petitioner, therefore, seeks to quash the aforementioned attachment made by the respondent authorities and further set aside the related communication letters.

Decision

Allowing the present petition, the Court relied on Travancore Devaswom Board v. Local Fund Audit, 2020 (3) KLT 296 and State Bank of India v. State of Kerala, 2019 (4) KLT 521, both of which, make it clear that, Section 26E of the SARFAESI Act and Section 31B of the RDB Act create a ‘First Charge’ by way of a priority to the Banks/Financial Institutions to recover and satisfy their debts, notwithstanding any statutory ‘First Charge’ in favour of the Revenue.

[Bank of Baroda v. State of Kerala, 2020 SCC OnLine Ker 7152, decided on 15-12-2020]


Sakshi Shukla, Editorial Assistant has put this story together

Case BriefsHigh Courts

Allahabad High Court: Ram Krishna Gautam, J., held that as per Section 482 Criminal Procedure Code, 1973, while exercising the inherent jurisdiction, High Court cannot make any comment on the factual matrix as the same remains under the trial court’s domain.

The instant application was filed under Section 482 Criminal Procedure Code, 1973 against the State of U.P. and Wsima Begum for quashing the charge sheet as well as the criminal case under Sections 420, 467 and 468 of Penal Code, 1860.

Applicants Counsel, Nazrul Islam Jafri, S.A. Ansari mentioned that allegations made against the applicant made out a case of civil liability as the applicant was alleged to have gotten her name mutated after the death of her husband under Section 34 of Land Revenue Act.

Applicant was married to Sagar Ali under Muslim Rites and customs and was blessed by one female child.

Applicant was subjected to cruelty with regard to dowry hence a criminal case was filed against her husband and in-laws.

Unfortunately, the husband of the applicant and his mother were murdered by unknown assailants. Due to the enmity and litigation, Parvej lodged a criminal case against the applicant and her family members on the basis of frivolous allegations under Section 147, 148, 149, 302, 307, 115 and 120-B of IPC read with Section 7 of Criminal Law Amendment Act.

Applicant, after the death of Sagar Ali, filed an application for getting her name along with her minor daughter’s name mutated at the place of Sagar Ali over his agricultural property.

In light of the above-stated, the application was allowed and the names were mutated in the revenue records.

Further, it has been stated that OP-2 claiming to be the second wife of Sagar Ali moved an application before the Court of Nayab Tehsildar challenging the above mutation order on the ground that she was the legally wedded wife of Sagar Ali. Hence the present applicant was fully aware of those facts even then, she got her name mutated with the wrong contention.

Tehsildar on hearing both sides, in 2014 had set aside the mutation order.

Analysis 

Civil Suits regarding agricultural land of Sagar Ali and his mother Ikhlasi Begum, with regard to disputed “will”, said to be executed by Sagar Ali, is pending before the competent Civil Court.

Ummeda Begum claimed herself to be successor along with her daughter Zoya for the property of late Sagar Ali and late Ikhlasi Begum. She claimed herself to be the only successor wit no other inheritor.

Court noted that in many other previous litigations it was fully in the knowledge of Ummeda Fatima that Sagar Ali was married to Wasima Begum, who was blessed with one female child. Even after knowing this fact mutation application was moved with an incorrect affidavit and incorrect application of documents.

U.P. Revenue Code Section 114 (c) provides that “A person who commits the murder of a [Bhumidhar, asami or government lessee], or abates the commission of such murder, shall be disqualified from inheriting the interest of the deceased in any holding.”

The prima facie case was disclosed for cognizable offence and it was not a ground for quashing of the FIR.

Offence of moving application, with false and fictitious contention, claiming herself to be sole survivor along with her minor daughter over the property of late Sagar Ali and his mother Ikhlasi Begum, and thereafter, fabricating oral and documentary evidence for it and getting name mutated, knowing the legal situation of debarring of inheritance and conviction in that criminal case of murder, prima facie, makes out offences for which charge-sheet was filed.

Section 482 CrPC, provides that nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.

In the decision of the Supreme Court in Hamida v. Rashid, (2008) 1 SCC 474, Supreme Court propounded that “Ends of justice would be better served if valuable time of the Court is spent in hearing those appeals rather than entertaining petitions under Section 482 at an interlocutory stage which after filed with some oblique motive in order to circumvent the prescribed procedure, or to delay the trial which enable to win over the witness or may disinterested in giving evidence, ultimately resulting in miscarriage of Justice.”

Abuse of Process of Court

In the Supreme Court decision of Dhanlakshmi v. R. Prasan Kumar, 1990 Supp SCC 686, it was propounded that “To prevent abuse of the process of the Court, High Court in exercise of its inherent powers under section 482 could quash the proceedings but there would be justification for interference only when the complaint did not disclose any offence or was frivolous vexatious or oppressive.”

Hence in view of the above, the exercise of inherent jurisdiction under Section 482 CrPC is within the limits, propounded as above. Therefore, this Court will not make any comment on the factual matrix because the same remains within the domain of the trial court.

Prayer for quashing the impugned order as well as the proceeding of the aforesaid complaint case was refused.[Ummeda Fatima v. State of U.P., 2020 SCC OnLine All 1358, decided on 19-11-2020]

Case BriefsHigh Courts

Kerala High Court: A Full Bench of A.M. Shaffique, Sunil Thomas and Gopinath, JJ., held that there is no limitation period for wife/divorced wife to claim her property entrusted to husband/in-laws given in the form of dowry or otherwise.

Questions involved was:

Whether trust created by a wife entrusting her property to her husband gets extinguished after the dissolution of marriage and whether she can initiate proceedings invoking Section 10 of the Limitation Act, 1963 without any limitation of time?

For the above-stated question, reference was made to the decision of Bindu K.P. v. Surendran C.K., [2018 (2) KHC 1] wherein it was held that claim of the wife or ex-wife for a dowry is not barred by any length of time.

Counsel for the appellant Sri S.K. Balachandran placed the following decision before the Court:

    • Swapna v. Thankavelu, 1990 SCC OnLine Ker 168: – In the above case, a Single Judge of this Court held that when valuable articles are entrusted by the wife to the husband for safe custody, the husband remains in the position as a trustee who is bound to account to the wife all her properties at any time when she demands. The aforesaid judgment was delivered following the Supreme Court judgment in Pratibha Rani v. Surajkumar, (1985) 2 SCC 370. It was further held that if the husband is a trustee, the wife is entitled to follow the property in the possession of the trustee, and Section 10 of the Limitation Act would apply.
  • Chacko v. Annamma, (1985) 2 SCC 370: – In this case, the Division Bench of this Court approved Swapna’s case stated above. In the above case, on a detailed analysis of the relevant provisions including Section 10 of the Limitation Act and the provisions of the Trusts Act, overruling an earlier judgment in Annamma v. Thressiamma, 1971 SCC OnLine Ker 86, it was held that there is a creation of trust in respect of stridhanam property and therefore Section 10 applies.
  • In Bhatacharjee v. Sarathi Choudhury, 1993 SCC OnLine Ker 13, while considering the impact of Section 12 of the Protection of Women from Domestic Violence Act, 2005, the Supreme Court held that as long as the status of the aggrieved person remains, and the stridhanam remains in the custody of the husband, the wife can put forth a claim under Section 12 of the Act.

Question involved in the above reference was the following:

When there is a change in circumstances between the spouses, especially when there is a dissolution of marriage and substantial time had elapsed, whether the trust created between them would be extinguished?

Section 10 of the Limitation Act states as follows:

“10. Suits against trustees and their representatives- Notwithstanding anything contained in the foregoing provisions of this Act, no suit against a person in whom property has become vested in trust for any specific purpose, or against his legal representatives or assigns (not being assigns for valuable consideration), for the purpose of following in his or their hands such property, or the proceeds thereof, or for an account of such property or proceeds, shall be barred by any length of time.

Explanation.-For the purposes of this section any property comprised in a Hindu, Muslim or Buddhist religious or charitable endowment shall be deemed to be property vested in trust for a specific purpose and the manager of the property shall be deemed to be the trustee thereof.”

In view of the decisions referred above, it is settled that,

when the wife entrusts with the husband any property belonging to her, a trust is created and the husband is bound to return the same to his wife. If the same is not returned, the wife has a right to demand the same by filing a suit or as in the present case, file an application before the Family Court or take other necessary steps under the relevant statutes in force.

When Section 10 of the Limitation Act indicates that there is no limitation for initiating any such action, in the absence of any other statute providing for a limitation, the trustee cannot take a contention that he shall not return the trust property on account of any period of limitation. The question posed is, when the relationship between the parties gets deranged and results in divorce, whether the trust gets extinguished and the divorced wife would be entitled to invoke Section 10 of the Limitation Act and file a suit at her will and pleasure at any point in time. In such an event, the questions to be considered are (i) whether a trust had been created at any point of time, (ii) if a trust has been created and the husband remains in the position of a trustee, whether it gets extinguished on the dissolution of marriage or under any other circumstances.

Under Section 77 of the Indian Trusts Act, 1882, a trust gets extinguished only under certain circumstances. Section 77 reads as under:

“77. Trust how extinguished.— A trust is extinguished—
(a) when its purpose is completely fulfilled; or
(b) when its purpose becomes unlawful; or
(c) when the fulfilment of its purpose becomes impossible by the destruction of the trust-property or otherwise; or
(d) when the trust, being revocable, is expressly revoked.”

Hence, unless any of the above-stated eventualities as mentioned take place, which is a question of fact to be decided on a case to case basis and once a trust is created, it continues to operate, even though marriage is dissolved. However, in an instance where there is an agreement between the parties settling the obligations arising from the trust, it gets fulfilled in terms of Section 77(a).

As per the Dowry Prohibition Act, 1961, when a statutory trust is created in respect of dowry, the principle aforestated shall apply.

Further, the Court added that, in the case of ornaments which are given in the form of dowry, definitely, a statutory trust is created. Even otherwise, if the ornaments owned by the wife do not form part of the dowry and if there is an entrustment of gold ornaments by the wife to the husband or his parents, a trust gets created, in which event, the trustee or trustees, as the case may be, are liable to return the same and there is no limitation for claiming the same by the wife/divorced wife.

In light of the above, the Court agreed with the law laid down in Chacko v. Annamma, (1993) 1 KLT 675 and upheld the view expressed in Bindu K.P. v. Surendran C.K., [2018 (2) KHC 1]. [Sheela K.K. v. N.G. Suresh, 2020 SCC OnLine Ker 4240, decided on 24-09-2020]

Case BriefsHigh Courts

Madras High Court: R. Subramanian, J., dismissed the second appeal filed in regard to suit for partition and granting possession of share to a daughter as coparcener on finding no substantial question of law.

In the instant second appeal, plaintiffs are aggrieved by the dismissal of their suit for partition and separate possession of their 1/3rd share.

What did the plaintiffs contend?

Plaintiffs stated that the suit properties belonged to Rasappa Gounder who died in the year 1980 leaving behind one son and two daughters. One of the daughters is the wife of the first plaintiff and mother of the second plaintiff, died on 20-04-1987.

Plaintiffs claimed that as the daughter she would become a coparcener upon enactment of Hindu Succession (Amendment Act 39 of 2005) Act, the plaintiff’s would seek a 1/3rd share in the estate of Rasappa Gounder.

Defendants Contention

Defendants contended that the predecessor in interest viz., Rasappa Gounder died in the year 1980 and after his death, there was an arrangement under which the daughters and the second defendant Subbayal relinquished their share in Rasappa Gounder’s estate upon receipt of Rs 25,000.

It was also stated that defendant 1 was in possession of the property as an absolute owner and sold a portion of the properties to the knowledge of Poornam, plaintiffs and second defendant.

Therefore, it was contended that the plaintiffs were effectively ousted from the enjoyment of the property by the first defendant.

Second defendant supported the above contentions and stated that she and her sister had received a sum of Rs 25,000 in full quit of their share and have no claim over the properties of the deceased.

Trial Court

Trial Court had held that since Rasappa Gounder died in 1981, the succession having opened on the death of Rasappa Gounder, Poornam would not become a coparcener.

Vineeta Sharma v. Rakesh Sharma, (2020) SCC Online 641

Change in law brought by the above-cited decision of the Supreme Court would not have helped the plaintiff, since the daughter herself had died in 1987 even prior to the enactment of the Hindu Succession (Amendment Act 39 of 2005) Act.

Hence, the claim that the daughter becomes a coparcener was rejected by the trial court.

In view of the above, a second appeal was filed.

Counsel A. Thiyagarajan appeared for the appellants.

Decision

Bench stated that if the claim of the plaintiffs was to be restricted to Section 8 of the Hindu Succession Act, then the devolution of the estate happened on the death of Rasappa Gounder in the year 1981. The instant suit has been filed 30 years thereafter in the year 2011.

Hence the Court stated that it is a stale claim which is sought to be resurrected for some other reason.

Therefore, Court found no substantial question of law and dismissed the second appeal. [C.P. Subramaniam v. Deivasigamami,  2020 SCC OnLine Mad 5206, decided on 16-10-2020]

Case BriefsHigh Courts

Delhi High Court: A Division Bench of Rajiv Sahai Endlaw and Asha Menon, JJ., dismissed an application filed under Section 151 CPC expressing surprise that advocates moved the application seeking the legal opinion of the Court.

The present application was filed invoking Section 151 of the Code of Civil Procedure, 1908 by the appellant, respondents 3 and 5 seeking clarification on the following:

“Whether the share in the property received by a son on the partition of a HUF is “HUF” or “individual” in his hands?”

Bench stated that “neither Section 151 CPC nor any other provision of law vests in this Court, acting as the Company Appeal Court, advisory jurisdiction.”

Court was surprised to note that the advocates are moving applications seeking the legal opinion of the Court. The application is thoroughly misconceived.

Dismissing the matter, Court added that,

“one of us (Justice Rajiv Sahai Endlaw) will be demitting office on 13th August, 2021 and the advocates are at liberty to approach him for advice at that time, by deferring the execution of the sale deed till then!”

Advocate Lalit Gupta stated that he did not even sign the application and his name has just been added without consulting him. [Balraj Kishan Gupta v. Panna Lal Giridhar Lal (P) Ltd., 2020 SCC OnLine Del 1265, decided on 18-09-2020]

Case BriefsHigh Courts

Bombay High Court: A Division Bench of R.K. Deshpande and N.B. Suryawanshi, JJ., while addressing an issue with regard to the deduction of pension by the Bank without any confirmation from the employer, observed that,

“The pension payable to the employees upon superannuation is a ‘property’ under Article 300-A of the Constitution of India and it constitutes a fundamental right to livelihood under Article 21 of the Constitution of India.”

“Pension cannot be deducted without authority of law.”

Petitioner a retired assistant foreman had a basic pension of Rs 1,334 as on 01-10-1994, consequent upon an increase in the pension and dearness allowance, the basic pension of Rs 25, 634 was fixed, for which the petitioner was entitled to and accordingly he was paid.

Right to Information Act, 2005

In the month of August, 2019 petitioner’s pension was reduced without consent or knowledge of the petitioner and thus he filed an application under the Right to Information Act, 2005 to know the reason for deduction and details as to the revision of the pension during the period 2015-16 and 2016-17.

Excess Payment of Pension

Respondent stated that there was an excess payment of pension to the petitioner.

Petitioner in view of the above approached the Court challenging the action of the respondent and sought a further direction to the respondents to restore the position in respect of payment of pension, prevailing prior to the deduction which commenced from 01-08-2019.

Excess Payment by SBI

State Bank of India-respondent stated that an amount of Rs 872 per month was erroneously paid in excess to the petitioner due to technical error in the system.

Reserve Bank of India

According to Circular No.RBI/2015-16/340-DGBA.GAD.No.2960/45.01.001/2015-16 dated 17-3-2016, clause (c), the bank claims to have an authority to recover the excess payment to the petitioner.

“c) In case the pensioner expresses his inability to pay the amount, the same may be adjusted from the future pension payments to be made to the pensioners. For recovering the over-payment made to pensioner from his future pension payment in installments 1/3rd of net (pension + relief) payable each month may be recovered unless the pensioner concerned gives consent in writing to pay a higher installment amount.”

Employer’s stand is very clear in the present case that the fixation of the petitioner’s pension was correct and proper.

Further, the employer has supported the claim of the petitioner and has no role to play in the matter of reduction of pension or its recovery.

Bench states that it is not the authority of the Bank to fix the entitlement of the pension amount of the employees other than the employees of the respondent-Bank.

Hence the action of the Bank to reduce the pension of the petitioner is unauthorised and illegal.

Furthermore, the Bank has failed to demonstrate any technical error in the calculations.

With regard to the RBI clause as stated above, Court stated that “once we hold that in fact there was no excess payment made to the petitioner, the question of applicability of the instructions issued by the RBI or undertaking given by the petitioner does not arise.” 

Principles of Natural Justice

Without following the principles of natural justice in the manner of either carrying out correspondence with regard to the correctness of the pension or an explanation in respect of the deduction, the said action on the part of the Bank is arbitrary, unreasonable, unauthorised and in flagrant violation of the principles of natural justice.

Breach of Trust

Bank is the trustee of the pensioner’s account and has no authority in the eyes of the law to dispute the entitlement of the pension payable to the employees other than those who are employed in the bank.

To tamper with the account is nothing but a breach of trust.

Court directed Bank to refund the amount of Rs 3,26,045 to the petitioner by crediting it in his pension account with interest at the rate of 18% p.a. from the date of deduction.

Further, the bank is required to be directed to pay the costs of Rs 50,000 to the petitioner towards the expenses of this petition.

Unfortunately, the time has come to tell the Bank that the aging is natural process, which leads to weakening of the body and mind.

Adding to its conclusion, Court stated that the Bank officials must realize that tomorrow it may be their turn, upon superannuation, to fight for the pension or post-retiral benefits. The thought process, therefore, to be adopted should be of a person in a situation like the petitioner.

Respect, dignity, care, sensitivity, assistance, and security would automatically follow.

Senior Citizens

It is a high time for the Banks to create a separate cell and to device a method to provide personal service through the men of confidence, at the door-step to the old aged, disabled and sick persons who are the senior citizens.

Bench directed registry to forward the copies of the Judgment to the Centralized Processing Pension Centres of all the Nationalized Banks and also to the Reserve Bank of India and the Chief Secretary, Government of Maharashtra, to consider the question of the constitution of separate cell and release of appropriate guidelines so as to attain the constitutional goal of providing respect, dignity, care, sensitivity, assistance and security to all the pension account holders in the Banks.[Naini Gopal v. Union of India, LD-VC-CW-665 of 2020, decided on 20-08-2020]

Case BriefsSupreme Court

“Flat purchasers suffer agony and harassment as a result of the default of the developer. Flat purchasers make legitimate assessments in regard to the future course of their lives based on the flat which has been purchased being available for use and occupation. These legitimate expectations are belied when the developer as in the present case is guilty of a delay of years in the fulfilment of a contractual obligation.”

Supreme Court: In the case where 339 flat buyers has complained against delayed handing over of possession, the Bench of Dr. DY Chndrachud and KM Joseph, JJ held that the flat buyers are entitled to compensation for delayed handing over of possession and for the failure of the developer to fulfil the representations made to flat buyers in regard to the provision of amenities.

“A failure of the developer to comply with the contractual obligation to provide the flat to a flat purchaser within a contractually stipulated period amounts to a deficiency. There is a fault, shortcoming or inadequacy in the nature and manner of performance which has been undertaken to be performed in pursuance of the contract in relation to the service.”

Brief Background

The complainants had booked residential flats in a project called Westend Heights at New Town, DLF, BTM Extension at Begu, Bengaluru. However, the obligation to handover possession within a period of thirty-six months was not fulfilled. National Consumer Disputes Redressal Commission (NCDRC) dismissed a consumer complaint filed by 339 flat buyers, accepting the defence of DLF Southern Homes Pvt. Ltd. and Annabel Builders and Developers Pvt. Ltd. that there was no deficiency of service on their part in complying with their contractual obligations and, that despite a delay in handing over the possession of the residential flats, the purchasers were not entitled to compensation in excess of what was stipulated in the Apartment Buyers Agreement (ABA).

On ABA being one-sided

Where a flat purchaser pays the installments that are due in terms of the agreement with a delay, clause 39(a) stipulates that the developer would “at its sole option and discretion” waive a breach by the allottee of failing to make payments in accordance with the schedule, subject to the condition that the allottee would be charged interest at the rate of 15 per cent per month for the first ninety days and thereafter at an additional penal interest of 3 per cent per annum.

On the other hand, where a developer delays in handing over possession the flat buyer is restricted to receiving interest at Rs 5 per square foot per month under clause 14. The agreement stipulates thirty-six months as the date for the handing over of possession.

“Evidently, the terms of the agreement have been drafted by the developer. They do not maintain a level platform as between the developer and purchaser. The stringency of the terms which bind the purchaser are not mirrored by the obligations for meeting times lines by the developer. The agreement does not reflect an even bargain.”

On argument that flat buyers are constrained by the stipulation contained in ABA providing compensation for delay at the rate of Rs 5 per square feet per month

The court must take a robust and common-sense based approach by taking judicial notice of the fact that flat purchasers obtain loans and are required to pay EMIs to financial institutions for servicing their debt. Delays on the part of the developer in handing over possession postpone the date on which purchasers will obtain a home. Besides servicing their loans, purchasers have to finance the expenses of living elsewhere. To postulate that a clause in the agreement confining the right of the purchaser to receive compensation at the rate of Rs 5 per square foot per month (Rs 7,500 per month for a flat of 1500 square feet) precludes any other claim would be a manifestly unreasonable construction of the rights and obligations of the parties.

“Where there is a delay of the nature that has taken place in the present case ranging between periods of two years and four years, the jurisdiction of the consumer forum to award reasonable compensation cannot be foreclosed by a term of the agreement.”

Further, the expression “service‟ in Section 2 (1) (o) means a service of any description which is made available to potential users including the provision of facilities in connection with (among other things) housing construction. Under Section 14(1)(e), the jurisdiction of the consumer forum extends to directing the opposite party inter alia to remove the deficiency in the service in question. Intrinsic to the jurisdiction which has been conferred to direct the removal of a deficiency in service is the provision of compensation as a measure of restitution to a flat buyer for the delay which has been occasioned by the developer beyond the period within which possession was to be handed over to the purchaser.

Hence, to uphold the contention of the developer that the flat buyer is constrained by the terms of the agreed rate irrespective of the nature or extent of delay would result in a miscarriage of justice.

Directions

  • Except for eleven appellants who entered into specific settlements with the developer and three appellants who have sold their right, title and interest under the ABA, the respondents shall, as a measure of compensation, pay an amount calculated at the rate of 6 per cent simple interest per annum to each of the appellants. The amount shall be computed on the total amounts paid towards the purchase of the respective flats with effect from the date of expiry of thirty-six months from the execution of the respective ABAs until the date of the offer of possession after the receipt of the occupation certificate;
  • The above amount shall be in addition to the amounts which have been paid over or credited by the developer at the rate of Rs 5 per square foot per month at the time of the drawing of final accounts; and
  • The amounts due and payable in terms of directions (i) and (ii) above shall be paid over within a period of one month from the date of this judgment failing which they shall carry interest at the rate of 9 per cent per annum until payment.

[Wg. Cdr. Arifur Rahman Kan and Aleya Sultana v. DLF Southern Homes Pvt Ltd, 2020 SCC OnLine SC 667, decided on 24.08.2020]

Case BriefsHigh Courts

Kerala High Court: A Division Bench of S.V. Bhati and Bechu Kurian Thomas, JJ., addressed an issue pertaining to the following terms,

Total deprivation, through a partition deed and a release deed, of the property of a deaf and dumb sister forced her to approach the Court to restore her rights in her property and claim partition.

In the present matter, Court held that persons having physical infirmities like deafness or dumbness which seriously affect their cognitive functions can file a suit through “next friend”.

Mental infirmity in the context of Order 32 Rule 15 is not mental disorder, insanity or mental illness.

Facts

Mary, Leelamma, and Aani are sisters. Mary being the eldest and Aani the youngest. Leelamma, the second amongst the sisters, is a deaf and dumb person. She is also illiterate.

The eldest sister claimed to have brought up Leelamma under her care and custody, conducted her marriage, and that of her daughter too. Leelamma’s conjugal life with her husband did not last long as she came back along with her daughter to Mary’s care.

Allegation

Leelamma alleged that partition deed and the release deed were executed on account of fraud and undue influence exerted over the plaintiff and thus sought to set aside the documents.

Partition Deed

As per the partition deed, the properties left behind the mother were divided between the three sisters.

Defendant 1 was allotted A schedule comprising 60 cents, while B schedule comprising just 5 cents, was allotted to the share of both plaintiff and defendant 1. Youngest sister and defendant 2 recited in the document that she is relinquishing her share in the properties.

Mary, defendant 1 the absolute owner of the entire 65 cents property.

Fraud and Dishonesty

Plaintiff conveyed to her daughter through gestures that she had been taken to some place to give her signature and that her thumb impression was taken.

Plaintiff alleged that release deed was cerated by undue influence, fraudulently, dishonestly, and without her knowledge or consent.

Next Friend

Defendant 1 questioned the right of the next friend to file the suit and also denied the incapacity of the plaintiff as far as her ability to comprehend and do things by herself was concerned and also denied the allegation of fraud, cheating and undue influence exerted by the defendants over the plaintiff.

Analysis and Decision

Next Friend

Order 32 Rule 15 of the Code of Civil Procedure, 1908 deal with Suits by or Against Minors and Persons of Unsound Mind. Appointment of next friend for a person with an unsound mind.

Further, the said provision deals with persons of mental infirmity, who are, by the said reason, incapable of protecting their interests, except with the assistance of a next friend, when suing or being sued.

Mental Infirmity

Living as a deaf and dumb person, has a debilitating effect on the mental faculties of comprehension, thought, communication and even response. These faculties when affected will have an effect on the person’s capacity to protect his civil rights.

Fraud, Undue Influence or Coercion

There is no dispute with the proposition that the burden of proof in respect of the plea of fraud, undue influence or coercion is upon the person who alleges the same.

Valid Contract

Free consent, competency to contract, lawful consideration, lawful object and agreement not declared to be void, are the main ingredients for a valid contract. It is a consensual act and the parties are free to settle any terms as they please.

Whether consent for partition and for the release deed has been obtained by undue influence or fraud played by the defendants upon the plaintiff?

High Court observed that, taking care of one’s own sister is a gratuitous or magnanimous act for which it cannot be believed that the entire property will be given away.

Position of Dominance

In the present matter, the defendants failed to prove good faith in the transaction and the execution of release deed documents was proved to have been done exploiting the position of dominance in which defendant 1 wielded over the plaintiff.

Principle of Undue Influence

Hence Court being of firm view stated that the said transactions relating to the share right of the plaintiff are void on the principle of undue influence.

Court also observed that nowhere does the document recite as to why more than 95% of the property (62.5 cents out of a total of 65 cents) left behind by mother of the parties to the document has been allotted to the share of the defendant 1, while the plaintiff is left with a meagre 4% (2.5 cents). Even the 2.5 cents allotted to the plaintiff was released in favour of the defendant1, within a period of five days of execution of Ext.A1. Though the document mentions payment of Rs 2.5 lakhs as consideration for the said transaction, it has come out in evidence that no such payment was received by the plaintiff.

“Fraud in the present case is evident and it has been deployed to exploit a hapless lady of her properties.”

Fraud

Referring to Section 34 of the Indian Registration Act, 1908 and the Rules made thereunder may be apposite in the present context and Court found that the failure to inform the Sub-Registrar about the deafness and dumbness of one of the parties to the document was a deft method in playing fraud.

Hence, defendant 1 is entitled to 2/3rd share in the plaint schedule property and held that defendant 2 is not entitled to any share. [Mary v. Leelamma, 2020 SCC OnLine Ker 2491, decided on 30-06-2020]

Case BriefsSupreme Court

Supreme Court: The 3-judge bench of Arun Mishra, SA Nazeer and MR Shah, JJ has held that daughters have right in coparcenary by birth and that it is not necessary that the father coparcener should be living when the Hindu Succession (Amendment) Act, 2005 came into force.

The conferral of right is by birth, and the rights are given in the same manner with incidents of coparcenary as that of a son and she is treated as a coparcener in the same manner with the same rights as if she had been a son at the time of birth.”

BACKGROUND OF THE CASE

The Court was dealing with a reference relating to the interpretation of section 6 of the Hindu Succession Act, 1956 as amended by Hindu Succession (Amendment) Act, 2005 in view of the conflicting verdicts rendered in two Division Bench judgments in Prakash v. Phulavati, (2016) 2 SCC 36 and Danamma v. Amar, (2018) 3 SCC 343.

Prakash v. Phulvati ruling

section 6 is not retrospective in operation, and it applies when both coparceners and his daughter were alive on the date of commencement of Amendment Act, 9.9.2005. The provision contained in the Explanation to section 6(5) provides for the requirement of partition for substituted section 6 is to be a registered one or by a decree of a court, can have no application to a statutory notional partition on the opening of succession as provided in the unamended Section 6. The notional statutory partition is deemed to have taken place to ascertain the share of the deceased coparcener which is not covered either under the proviso to section 6(1) or section 6(5), including its Explanation. The registration requirement is inapplicable to partition of property by operation of law, which has to be given full effect.

Danamma v. Amar Ruling

The amended provisions of section 6 confer full rights upon the daughter coparcener. Any   coparcener, including a daughter, can claim a partition in the coparcenary property. The father, in the said case, died in the year 2001, leaving behind two daughters, two sons, and a widow. Coparcener’s father was not alive when the substituted provision of section 6 came into force. The daughters, sons and the widow were given 1/5th share apiece.

DETAILED EXPLANATION OF LAW IN REFERENCE

On the law on Coparcenary and Joint Hindu Family

Coparcenary property is the one which is inherited by a Hindu from his father, grandfather, or great grandfather. Property inherited from others is held in his rights and cannot be treated as forming part of the coparcenary. The property in coparcenary is held as joint owners. Coparcener heirs get right by birth. Another method to be a coparcener is by way of adoption.

“As earlier, a woman could not be a coparcener, but she could still be a joint family member. By substituted section 6 with effect from 9.9.2005 daughters are recognised as coparceners in their rights, by birth in the family like a son. Coparcenary is the creation of law. Only a coparcener has a right to demand partition. Test is if a person can demand a partition, he is a coparcener not otherwise.”

On unobstructed and obstructed heritage

Unobstructed heritage takes place by birth, and the obstructed heritage takes place after the death of the owner. It is significant to note that under section 6 by birth, right is given that is called unobstructed heritage. It is not the obstructed heritage depending upon the owner’s death.Thus, coparcener father need not be alive on 9.9.2005, date of substitution of provisions of Section 6.

On effect of death of father before the Amendment Act, 2005 came into force

Rejecting the argument that if the father or any other coparcener died before the Amendment Act, 2005, the interest of the father or other coparcener would have already merged in the surviving coparcenary, and there was no coparcener alive from whom the daughter would succeed. It said,

“It is not by the death of the father or other coparcener that rights accrue. It is by the factum of birth. It is only when a female of Class I heir is left, or in case of her death, male relative is left, the share of the deceased coparcener is fixed to be distributed by a deemed partition, in the event of an actual partition, as and when it takes place as per the proviso to unamended section 6.”

On possibility of uncertainty if daughter is given the right to be a coparcener by birth

The Court also rejected the contention that if the daughter is given the right to be a coparcener by birth and deemed to become a coparcener at any point in the past, in the normal working of the law, uncertainty would be caused.

It said that no uncertainty is brought about by the provisions of section 6 as the law of Mitakshara coparcenary makes the share of surviving coparceners uncertain till actual partition takes place. Uncertainty in the right of share in a Mitakshara coparcenary is inhered in its underlying principles, and there is no question of upturning it when the daughter is treated like a son and is given the right by birth; to be exercised from a particular date, i.e., 9.9.2005.

“There is no doubt about it that advancement brings about the enlargement of the size of the coparcenary and disabling it from treating the daughter unequally. Even otherwise, its size could be enlarged by the birth of a son also.”

By applying section 8, the joint possession was not repudiated by the fact that a female, whether a wife or daughter, inherited the share of coparcener under the proviso to original section 6. She was an equal member of the joint Hindu family and deemed statutory partition did not bring disruption of the coparcenary.

KEY TAKEAWAYS

  • The provisions of section 6 have been held to be prospective. The provisions contained in substituted Section 6 of the Hindu Succession Act, 1956 confer status of coparcener on the daughter born before or after amendment in the same manner as son with same rights and liabilities.
  • The rights can be claimed by the daughter born earlier with effect from 9.9.2005 with savings as provided in Section 6(1) as to the disposition or alienation, partition or testamentary disposition which had taken place before 20th day of December, 2004.
  • Since the right in coparcenary is by birth, it is not necessary that father coparcener should be living as on 9.9.2005.
  • The statutory fiction of partition created by proviso to Section 6 of the Hindu Succession Act, 1956 as originally enacted did not bring about the actual partition or disruption of coparcenary. The fiction was only for the purpose of ascertaining share of deceased coparcener when he was survived by a female heir, of Class­I as specified in the Schedule to the Act of 1956 or male relative of such female. The provisions of the substituted Section 6 are required to be given full effect. Notwithstanding that a preliminary decree has been passed the daughters are to be given share in coparcenary equal to that of a son in pending proceedings for final decree or in an appeal.
  • In view of the rigor of provisions of Explanation to Section 6(5) of the Act of 1956, a plea of oral partition cannot be accepted as the statutory recognised mode of partition effected by a deed of partition duly registered under the provisions of the Registration Act, 1908 or effected by a decree of a court. However, in exceptional cases where plea of oral partition is supported by public documents and partition is finally evinced in the same manner as if it had been affected by a decree of a court, it may be accepted.  A plea of partition based on oral evidence alone cannot be accepted and to be rejected outrightly.

[Vineeta Sharma v. Rakesh Sharma, 2020 SCC OnLine SC 641, decided on 11.08.2020]


SCC Online is now on Telegram and Instagram. Join our channel @scconline on Telegram and @scconline_ on Instagram and stay updated with the latest legal news from within and outside India

Case BriefsHigh Courts

Kerala High Court: B. Sudheendra Kumar, J., disposed an original petition challenging the competency of the Commissioner in measuring the land.

The present case challenges a direction passed by the present court wherein the court directed the Commissioner to measure the property with the assistance of the Surveyor using the TST method.

The advocate representing the petitioner, B. Krishna Mani submitted that it does not challenge usage of TST method for measuring the property. It submitted that it is for the surveyor deputed by the court to decide the method for measuring the property and it is up to his discretion.

Respondent’s Counsel also had no objection in leaving the matter to be decided by the Surveyor.

The Court upon perusal of the facts and circumstances observed that the parties are raising allegations against the Commissioner and they have further alleged that the Commissioner was not an experienced individual for measuring the land. The Court stated that these allegations do not stand, particularly when the duty of the Advocate Commissioner is to measure the property with the assistance of the Surveyor, who is admittedly an experienced person. The Court modified the previous order and ordered that the Surveyor may choose any of the approved methods, including the TST method, to measure the property. Thereafter, the Court also directed the Commissioner and the Surveyor to complete the measurement of the property as expeditiously as possible. [Koshy George v.  Abraham T. Varghese,  2020 SCC OnLine Ker 1145,  decided on 04-02-2020]

Case BriefsForeign Courts

Supreme Court of the Democratic Socialist Republic of Sri Lanka: A Full Bench of Prasanna Jayawardena, L.T.B. Dehideniya and S. Thurairaja, JJ., dismissed an appeal filed on being aggrieved by the Judgment of the High Court which had allowed the appeal of the Defendant-Respondents.

The Plaintiff-Appellant had instituted action in the District Court of Colombo against the Defendant-Respondents stating that he was entitled to the property described in the first schedule of the plaint, stating that the first Defendant-Respondent who was his brother was the owner of the property which was just adjacent to the property owned by him and the first Defendant-Respondent had forcefully and illegally annexed 1.95 perches of his land and gave it to the second Defendant-Respondent. The allotment of the land described that the land belonged to the mother of the Plaintiff-Appellant and the first Defendant-Respondent who by deed had gifted the portion of land bearing assessment No. 104 to the 1st Defendant-Respondent and land bearing assessment No. 111,113 and 115 to the Plaintiff-Appellant. After the first Defendant-Respondent did not honor his promise of returning the land back as directed by the Mediation Board the Plaintiff-Appellant had approached the district court which had granted the Plaintiff-Appellant all the relief’s prayed for in the plaint. Being aggrieved by which the Defendant-Respondents had appealed in the High court which had allowed their appeal stating that when there is a variation between description and extent given in a Deed, in law, the description must prevail. Thus the instant appeal was filed by the Plaintiff-Appellant. The decisive factor regarding the issue was considered to be the old wall which separated the two properties and the Plaintiff-Appellant contends that the first Defendant-Respondent had reconstructed the wall after it was demolished during the communal riots of 1983 and in doing so he encroached 1.95 perches of the Plaintiff-Appellant’s property but there was no evidence to support his contention.

The Court while dismissing the appeal answered the four questions of law in negative and explained that “No statement made by any person before a Mediation Board shall be admissible in evidence in any civil or criminal proceedings” and the District Court had come to his conclusion by relying on statements made at the Mediation Board so High Court did not err in law substituting its findings in place of the factual findings of the District Court further there was no proof of encroachment and no evidence to prove his claim. [B. Premarajah Jayawardena v. B. Upali Dayananda Janapriya Jayawardena, SC Appeal No: 126 of 2016, decided on 17-12-2019]

Case BriefsHigh Courts

Bombay High Court: S.C. Gupte, J., while allowing a second appeal filed by the plaintiff against the order of the first Appellate court, held that the suit filed for protecting the possession of immovable property based on settled exclusive possession cannot be dismissed on the ground that the plaintiff has failed to prove title to the suit property.

The plaintiff claimed that the suit property was gifted orally to him by one Hamid. He claimed that the defendants were interfering in his peaceful possession of the suit property. Therefore, he filed a suit for perpetual injunction against the defendants, which was allowed by the trial court. It was an admitted fact the plaintiff was, all throughout, in exclusive possession of the suit property. However, on appeal, the First Appellate Court reversed the order passed by the trial court. Hence, the present the second appeal by the plaintiff.

The substantial question of law to be decided in this appeal, as reframed by the High Court was: Can a suit filed for protecting the possession of immovable property based on settled exclusive possession be dismissed on the ground that the Plaintiff has failed to prove title to the suit property?

After hearing Pramod N. Joshi, Advocate for the plaintiff, and Sharad T. Bhosale, Advocate for the respondent-defendants, the High Court perused the record and reached the conclusion that the substantial question as framed above had to be answered in the negative. Explaining the fundamental fallacy in the impugned order, the Court explained: “The District Court has dismissed the plaintiff’s suit for protecting his possession without in any way having questioned the plaintiff’s exclusive possession of the suit property. If his exclusive possession was not debated/questioned, assuming without admitting that his exclusive ownership through the purported oral gift by Hamid Husein was not proved unless the defendants actually showed either their pre-existing physical possession or their entitlement to the suit property by a succession, testamentary or intestate, the plaintiff was entitled to the perpetual injunction sought by him.”

It was further observed that the defendant’s’ claim to be in physical possession of the suit property was neither accepted by the trial court nor by the First Appellate Court, and the only case of entitlement pleaded by the defendants having also been found against them by both courts below, they had no case to resist the plaintiff’s claim for protecting his admitted possession of the suit property.

Accordingly, the second appeal filed by the plaintiff was allowed; the impugned judgment of the First Appellate Court was set aside, and the order passed by the trial court was restored. [Kadar Raju Shaikh v. Abbas Pirmohamad Shaikh, 2019 SCC OnLine Bom 4688, decided on 07-11-2019]

Case BriefsForeign Courts

South Africa High Court, Kwazulu-Natal Division: The Division Bench of Lopes and Radebe, JJ. while allowing the appeal reduced the sentence for murder and conviction for robbery was converted into the theft.

In the present case, the appellant, Mthobisi Mtho Mgidi was convicted of one count of robbery with aggravating circumstances and one count of murder and sentenced to 15 years’ imprisonment on the count of robbery, and life imprisonment on the murder count by the Umlazi Regional Court.

The facts surrounding the conviction are as follows: One night, the appellant and his friend Sikhakhane were walking along the road in a drunken state. Along the road, they met the deceased and he was too in a drunken state. While Sikhakhane was ahead of Mgidi, he heard someone calling him and he looked back and saw Mgidi stabbing the deceased with a knife. Sikhakhane then went up to Mgidi and pushed him away from the deceased and saw him covered in blood, and carrying a belt and either shoes or takkies which Sikhakhane stated belonged to the deceased. Sikhakhane and Mgidi’s mother testified where it was found that Sikhakhane had no knowledge of the circumstances under which Mgidi obtained possession of the knife and that Mgidi’s mother also saw his blood-stained clothes and knife.

Mgidi testified that he could not recall what happened that day and he ran away from his home after knowing that the police is looking for him.

The Counsel for the appellant, N.B. Dlamini submitted that the State bore the onus of proving criminal capacity and had failed to discharge that onus. He referred to a Judgment of Supreme Court of Appeal of South Africa, The Director of Public Prosecutions, Kwazulu-Natal v. Ramdass [2019] ZASCA 23 in which the accused was acquitted of both robbery and murder because it was found that the State had not proved that he had the necessary criminal capacity.

Counsel on behalf of the State, N. Dube submitted that Ramdass (accused in the abovementioned case) pertinently raised the defences, whereas in the present matter Mgidi pleaded not-guilty, because he could not recall having committed the offences and the memory of Mgidi was selective, because he remembered things which had taken place shortly before and after the incident. It was further submitted that in S v. Chretien 1981 (1) SA 1097 (A) at 1108C, it was mentioned that the fact that a person cannot remember what they did, does not mean that they were not criminally responsible.

The Court after analyzing the facts and circumstances of the case, observed that the evidence of the State witnesses clearly established that alcohol played a role in the unfolding events, it is clear that Mgidi was of sound enough mind to procure the knife with which he assaulted the deceased. The appellant remembered his interaction with his mother after arriving at home, and his actions in crying and then fleeing, indicate that he must have known what he did. In the circumstances of the present case, there is no evidence that the violence occasioned to Mr Khanyile by Mr Mgidi was instigated with the intention of depriving him of his property. In those circumstances, Mr Mgidi should have only been convicted of the murder of Mr Khanyile and the theft of a belt and a pair of takkies. The murder was neither planned nor premeditated.

The conviction for robbery was set aside, and replaced with a conviction on one count of theft and sentenced to undergo two years’ imprisonment on the conviction of theft. The appeal against conviction on the murder charge was dismissed and its sentence succeeded and a sentence of twelve years’ imprisonment was imposed. [Mthobisi Mtho Mgidi v. State, Case No. AR212 of 2017, decided on 31-05-2019]

Case BriefsHigh Courts

Karnataka High Court: Krishna S Dixit, J. dismissed a petition in limine, filed against an order of the Senior Civil Judge; on the ground of insufficiency of provisions of law and inability of the petitioner to support the legal contentions.

The petitioner herein was a party in a final decree proceeding arising out of a suit for partition and is aggrieved by the dismissal of his obstructor application under Order 21 Rule 97 and 101 read with Section 151 of Code of Civil Procedure, 1908 to re-adjudicate the rights of the parties. Hence, this petition.

Issue: Whether a Hindu widow, on contracting marriage, is divested of the property that has been vested in her by way of succession to the estate of the deceased husband?

The petitioner was represented by H.V. Manjunatha and  R. Manjuladevi who contested that respondent had contracted second marriage after the death of her first husband and therefore, she was divested of the property inherited from the deceased husband upon remarriage. Hence, there was a need for fresh adjudication of rights qua the respondent.

The Court’s conclusion consisted of a two-fold observation. Firstly, for an obstructor’s application, accrual of an independent cause of action which obstructs the execution of a decree is required. Secondly, contentions have to be supported by provisions of law or rulings, which the petitioners failed to do. It was held that a widow cannot be deprived of property by mere remarriage, subject to any just exceptions. A widow is the full owner of the property (Section 14 of Hindu Succession Act, 1956) and therefore such stipulations do not align with the intent of the legislature to bring gender equality.

High Court laid emphasis on Cherotte Sugathan v. Cherotte Bharathi, (2008) 2 SCC 610 and noted that the contested Hindu Widows’ Remarriage Act, 1856 also stood repealed by the Parliament which further elucidated on the above-mentioned question of law. In light of the aforesaid rationale, the Court dismissed the petition in limine.[A.N. Amruth Kumar v. A.N. Vanitha, 2019 SCC OnLine Kar 683, decided on 13-06-2019]

Corp Comm LegalExperts Corner

The doctrine of constructive notice is often criticised for being used extensively and harshly against the parties, particularly in property related matters. In certain situations, the parties might not have the means or resources to inquire or acquire knowledge about the title of a property and other related information.

In India, it is a major problem to prove the title of a property. This is because in India the system of “presumptive titles” is prevalent where title documents are not certified by the State. They remain private documents and do not get the status of public records.[1] This is because the present system under the Registration Act, 1908 only provides for registration of deeds and documents. Moreover even though the Transfer of Property Act, 1882 mandates compulsory registration of transfer of immovable property, there is still lack of proper documentation in this regard. More often than not, this contributes to unsatisfactory state of affairs in conveyancing the transfer of legal title of a property from one person to another.

Due to the lack of clarity in the title of ownership, the onus to inquire and confirm about the ownership and other title related facts lies with the buyer. It is difficult for a buyer to ascertain such facts due to the existing ambiguity and lack of conclusive ownership. A conclusive title may be defined as an unassailable and conclusive proof of ownership of property.[2] The Ministry of Rural Development had prepared a Model Land Titling Bill, 2011, wherein it proposed to set up a Title Registration Authority and an Appellate Tribunal. The conclusive title system provides for certainty of title to land. The proposed system registers the title gives finality and indefeasible rights which cannot be overturned or annulled. Therefore, it does away with repeated, imperfect and costly examination of past titles which is often a problem to the parties while acquiring all the information related to the property.

The court imputes constructive notice on parties in cases of failure to find out all facts related to the title of the party. In certain situations the implication of the doctrine of constructive notice can be harsh and unreasonable on the parties as this notice is implied irrespective of the difficulties in acquiring complete knowledge of the title deeds. The title documents are not certified by the State and therefore remain private, making it very difficult for the parties to locate the documents and find out all the information. The doctrine of constructive notice, however, fails to recognise the ground realities and practical difficulties and tends to arbitrarily impose notice on the parties on their failure to ascertain and verify certain facts for safeguarding his one interest.

Conclusive title of ownership removes the scope of bona fide mistakes as to the past titles or existing burdens affecting the subject property. It also removes the ever-present possibility of fraud by duplication or suppression of deeds, and gives State-guaranteed safety. A conclusive title system requires a single agency to handle property records. Moreover, such single agency should at any given moment mirror the ground reality of the property records. This is known as the mirror principle. In addition, the curtain principle should also be applicable. This principle requires that the record of a title should depict the conclusive ownership status and probing into past transactions and titles of the property should become unnecessary.[3]

Once a property is registered with the aforementioned land titling centre, there shall be a detailed title search including probing into past ownership, transactions and litigation history (if any) to establish non-encumbrance on the land. Thus, before purchasing a property, the buyer would have a clear understanding of the ownership issues and past record. Hence, granting of conclusive title of ownership will make the doctrine of constructive notice redundant and inapplicable to the parties because then there shall be no ambiguity with regard to the title of a property and a court shall not have to impute constructive notice on any party due to their failure to acquire the desired knowledge. This system is followed in Australia, Canada and the United Kingdom wherein one has to prove conclusive title of the property which is thereafter registered. Thereafter, the titleholder registered with the State cannot be dispossessed.

Constructive notice is the equity which treats a man who ought to have known a fact, as if he actually does know it. It presupposes, that in property transactions, a transferee ought to ascertain and verify certain facts for safeguarding his one interest. These facts may relate to the property or the transferor. The basic objective behind these inquiries and verifications is to find whether the property sought to be transferred is free from any charges or encumbrances and whether the transferor is eligible to convey a valid title to the transferee. The rule that applies here is that when a prudent man enters into the market, he would like to take the property free from any charge or encumbrances. Therefore, the rule of “caveat emptor” or “buyer beware” applies here and the transferee has to make inquiry about (a) whether the transferor is competent to make the transfer; (b) whether there is a charge due over the property; and (c) whether any person has temporary or permanent claim over the property.

Constructive notice is only imputed in situations where a person has means of knowing a particular fact but has failed to do so. There exists circumstances which ought to put him on an inquiry, which if prosecuted would lead to discovery of it.[4] However, if the person has no means or opportunities to obtain information about something, notice cannot be imputed on him about that thing. Thus, when the purchaser does not have the slightest idea or suspicion about any earlier agreement entered into, far away from the place where the property is situated, it cannot be said that there was any wilful abstention from the party.

Therefore, the theory upon which courts proceed in holding possession to be constructive notice of whatever rights the occupant may have in the premises is that possession, being prima facie evidence of some interest in the land by the tenant, should normally place a purchaser upon guard and lead him to investigate the extent and nature of such interest. Any failure on his part to make inquiry is, therefore regarded as an exhibition of negligence or bad faith which ought to place him in no better position than that of a purchaser with full knowledge of the adverse claim.[5]

However, in certain situations, this doctrine has been extended to cases hardly within its jurisdiction. For instance, in a case, it was held that possession by one tenant in common is constructive notice of an unrecorded conveyance to him from his co-tenant as against subsequent mortgagee of the latter who had no actual notice. As the object of registry system is to facilitate transfers of property, the purchaser ought, unless there is some potent reason to the contrary, to be able to rely upon the registered records.

In company law parlance, the effect of the doctrine of constructive notice is harsh on the outsider who is entering into a contract with the company because that person is deemed to have a constructive notice of the contents of the documents of the company. In case of default of any condition, the outsider cannot claim relief on the ground that he was unaware of the powers of the company in case of ultra vires of the company.

Moreover, this doctrine does not take notice of the realities of business life because people know a company mostly through the reputation of its promoters and officers and not through its documents. As an antithesis, a new theory called the doctrine of indoor management has been evolved by the courts.[6] The doctrine of constructive notice seeks to protect the company against the outsider; whereas the doctrine of indoor management operates to protect outsiders against the company. The rule of indoor management is based upon obvious reasons of convenience in business relations.

Firstly, the memorandum and articles of association are public documents, open to public documents. However, the details of internal procedures are not thus open to public inspection. Therefore, as per the application of this theory, an outsider is presumed to know the constitution of a company but not what may or may not have taken place within the doors that are closed to him. Moreover, as discussed above the passing of the Land Titling Bill proposed in 2008 shall provide conclusive title of ownership which would in turn reduce if not remove the ambiguity surrounding the information related to the past and present titles.

A shift from the presumptive titling system to the conclusive titling system for recording land titles will make the use of the doctrine of constructive notice redundant as the buyer will only have to prove the conclusive title of the property.


*Bhumesh Verma is Managing Partner at Corp Comm Legal and can be contacted at bhumesh.verma@corpcommlegal.in. **Abhisar Vidyarthi is a Student Researcher with Corp Comm Legal (4th-year student of Maharashtra National Law University, Mumbai)
[1]    Why You May Never Prove Ownership of Your Land, <http://www.indiaspend.com/snapshots/why-you-may-never- prove-ownership-of-your-land>, last accessed on 20-4-2019.

[2]    Dr Madalasa Venkataraman, What is Title Guarantee Worth in Land Markets, IIMB-WP N0. 473, <https://iimb.ac.in/ research/sites/default/files/WP%20No.%20473.pdf>.

[3]    Rita Sinha, Moving Towards Clear Land Titles in India: Potential Benefits, A Road Map and Remaining Challenges <siteresources.worldbank.org/INTIE/Resources/R_Sinha.docx> last accessed on 29-8-2017.

[4]    Ram Coomar Coondoo v. Mcqueen, (1872) 11 Beng LR 46.

[5]    Limitations of the Doctrine of Constructive Notice by Possession. Harvard Law Review 18, No. 3 (1905): 218-19. 33 Royal British Bank v. Turquand, (1856) 6 E&B 327.

[6]    Royal British Bank v. Turquand, (1856) 6 E&B 327.

Case BriefsTribunals/Commissions/Regulatory Bodies

Appellate Tribunal, Prevention of Money Laundering Act (New Delhi): A Coram of Manmohan Singh (Chairman), J. and G.C. Mishra (Member) allowed an appeal under Section 26 of the Prevention of Money Laundering Act, 2002 against an order passed by the Adjudicating Authority for attaching property.

In the instant case the CBI registered a criminal case under Section 120-B of Penal Code, 1860 read with Sections 7, 12, 13(2) and 13(1)(d) of Prevention of Corruption Act, 1988 against one Joint Director of Enforcement Directorate (ED) wherein it was alleged that he assisted the appellant (herein), indulging in corrupt practices in an investigation. It was also alleged that they had taken a huge amount of bribes as quid-pro-quo for acts of omission and commission during the said investigation. As a result, the appellant was arrested by CBI and a charge sheet was filed against him. On the basis of the registration of the case by CBI, a Prevention of Money Laundering Act, 2002 (PMLA) case was also recorded at New Delhi. The ED provisionally attached the immovable property of the appellant which was confirmed by the Adjudicating Authority.

The respondent’s counsel, Shilpi Satyapriya Satyam, contended that the aforesaid property was attached as a “value thereof” in accordance with provision made under Section 2(1)(u) read with Section 2(1)(v) of the PMLA. The counsel for the appellant, R.K. Handoo, drew the attention of the Tribunal to the provision in Section 8(3)(a) of PMLA, 2002 as amended by Act 13 of 2018 which reads as, “a) continue during [investigation for a period not exceeding ninety days or] the pendency of the proceedings relating to any [offence under this Act before a court or under the corresponding law of any other country, before the competent court of criminal jurisdiction outside India, as the case may be. On the basis of this the counsel contended that the confirmation order of attachment passed by the Adjudicating Authority did not survive. Also, no prosecution complaint was filed against the appeal, and hence the appeal be allowed.

The Tribunal found, “It is strange to note here that an immovable property of a person has been made part of a prosecution complaint for confiscation without making that person as a party and affording that person an opportunity to defend his case.” It was further noted, “Section 8(3)(a) of PMLA has been amended by the Act 13 of 2018, wherein a limitation period has been provided for continuation of attachment or retention of property or record post confirmation of attachment/retention and it is the intention of the legislature not to allow the Investigating Authority to get the property attached or retained the record/documents/items indefinitely in the name of investigation.”

Thus, the appeal was allowed. The Tribunal directed the appellant to move to the concerned Special Court for an appropriate remedy, wherein the Prosecution Complaint was pending and his property was made part and parcel of that complaint.[Sanjay Kumar v. Deputy Director Directorate of Enforcement, New Delhi, 2019 SCC OnLine ATPMLA 9, decided on 12-04-2019]

Case BriefsSupreme Court

Supreme Court: In a case where a widow claimed possession of a property mutated in her name on the basis of the oral gift from her husband before the enforcement of the Hindu Succession Act, 1956, the bench of AM Khanwilkar and Ajay Rastogi, JJ said,

“Section 14(1) of the Act, 1956 clearly envisage that the possession of the widow, however, must be under some vestige of a claim, right or title or under any of the devise which has been purported under the law.”

The Court also explained the concept of mutation and said.

“the mutation of a property in the revenue records are fiscal proceedings and does not create or extinguish title nor has it any presumptive value on title. It only enables the person in whose favour mutation has been ordered, to pay the land revenue. At the same time, the effect of a declaratory decree to restore the property alienated to the estate of the alienor and until and unless the alienees are able to convince the court that they have no subsisting interest in the property, the heirs of the alienees would be entitled to the benefits of the property as per the law of succession.”

The Court, hence, held that in the instant case, the widow although was holding possession but not under any of the devise referred to under explanation to Section 14(1) of the Act, 1956 and mere possession would not confer pre­existing right of possession over the subject property to claim full ownership rights after the Act, 1956 came into force by operation of law.

[Ajit Kaur v. Darshan Singh, 2019 SCC OnLine SC 470, decided on 04.04.2019]