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Lingo Bhimrao Naik Vs. Dattatrya Shripad Jamadagni - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Case NumberFirst Appeal No.287 of 1935
Judge
Reported inAIR1938Bom97; (1937)39BOMLR1233; 173Ind.Cas.817
AppellantLingo Bhimrao Naik
RespondentDattatrya Shripad Jamadagni
Excerpt:
.....of 1882), section 89.;a transaction is voidable as against a third party if it is the result of undue influence and that party took the benefit either as a volunteer or with the knowledge of the exercise of undue influence by a person who was in a position to dominate the will of the executant. the third party's knowledge of the fiduciary relationship between the parties to a contract and the exercise of undue influence puts the third party under the same disability as the other party who occupied the position of confidence.;rama patter v. lingappa gounder (1934) i.l.r. 58 mad. 454 and lakshmi doss v. roop laid (1906) i.l.r. 30 mad. 169 referred to.;the plaintiff, a minor, was adopted by the defendant who was a widow in possession of large watan and non-watan properties. the plaintiff..........on the ground that the plaintiff had not proved that the confirmation deeds were taken from him by undue influence, that the gift-deeds were valid, and that the plaintiff was not, therefore, entitled to the relief sought.58. the main point, therefore, in these appeals is whether the plaintiff is entitled to avoid the confirmation deeds on the ground of threats and undue influence under sections 15 and 16 of the indian contract act. under section 15 'coercion' is the committing, or threatening to commit, any act forbidden by the indian penal code, or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement. under section 16 a contract would be said to have been induced by.....
Judgment:

Divatia, J.

1. These appeals have been referred to me on account of a difference of opinion between Barlee and Tyabji JJ. The point of difference as stated is whether the plaintiff is entitled to have the manyata-patras (confirmation deeds) set aside and to recover possession of the properties given by his adoptive mother to the defendants.

2. The main facts bearing on the point are shortly these :-Plaintiff, who was born in 1912, was living with Laxmibai, the widow of Bhimrao Naik, to whom the suit property belonged, since he was about five years old. Bhimrao and the plaintiff's natural grandfather were sons of two sisters. It appears that he liveld with Laxmibai as the latter intended to adopt him, and in 1929 the idea of adopting the plaintiff was put into effect and the adoption took place on February 21, 1929. At that time Laxmibai had two daughters of hers, Venubai and Haribai, living and the third daughter Dhomdubai was dead leaving a son called Chidambar. Laxmibai had a brother called Dattatraya Jamadagni. The property consisted of watan and non-watan properties of the value of nearly a lac of rupees, the watan property being worth about Rs. 60,000 and the non-watan about Rs. 40,000. Laxmibai being desirous of providing for her two daughters and the daughter's son as well as for her brother, it was agreed at the time of the adoption between Laxmibai and the natural father of the plaintiff, who was then a minor, that the plaintiff's adoption should take place on condition that the non-watan properties were given in gift to the two daughters of Laxmibai, her daughter's son and her brother. It was also agreed between Laxmibai and the plaintiff's natural father that the former should remain in possession and management of watan properties during her lifetime, and that what was to be given to the plaintiff out of the income of the watan properties was entirely dependent upon her will and that he had no right to demand anything during her lifetime. These agreements were embodied in documents passed on the day previous to the adoption, i. e. on February 20, 1929. Four deeds of gift of different portions comprising the whole of the non-watan property were passed by Laxmibai in favour of her two daughters, her daughter's son, and her brother respectively, and the fifth deed in the nature of an agreement was passed by the minor plaintiff, who was then about seventeen years of age, as represented by his natural father as his guardian in favour of Laxmibai. It was also agreed at the time that the plaintiff, on attaining the age of majority, was to pass documents in confirmation of the four deeds of gift passed by Laxmibai, and two persons, named Abasaheb Kulkarni and Gurunath, stood as guarantors of the plaintiffs passing those documents. The plaintiff became major on September 24, 1930, and his case, is that soon after that Laxmibai asked him to pass the confirmation deeds and as he was unwilling to do so, she and her nearest relatives, that is to say the donees under the gift-deeds, as well as some of their well-wishers gave threats to him that if he did not pass the deeds they would get his adoption set aside, that they would not get him married and he would not be given money for his education; that Laxmibai took undue advantage of her position and as the result of these threats, the plaintiff had to pass the necessary documents confirming the deeds of gift on November 19, 1930. The three suits out of which these appeals arise have been brought by the plaintiff on September 22, 1933, for possession of the properties conveyed under these deeds of gift and the confirmation deeds, and subsequently there was a fourth suit for a declaration that he was the validly adopted son of Bhimrao and that the properties under the agreement with the adoptive mother Laxmibai, that is to say, the watan properties, were of the full ownership of the plaintiff, that the agreement was not binding on him and that he was entitled to take their possession. One of the donees Haribai, having died without issue, it was not necessary to set aside the gift-deed to her.

3. The trial Court dismissed the suits on the ground that the plaintiff had not proved that the confirmation deeds were taken from him by undue influence, that the gift-deeds were valid, and that the plaintiff was not, therefore, entitled to the relief sought.

58. The main point, therefore, in these appeals is whether the plaintiff is entitled to avoid the confirmation deeds on the ground of threats and undue influence under Sections 15 and 16 of the Indian Contract Act. Under Section 15 'coercion' is the committing, or threatening to commit, any act forbidden by the Indian Penal Code, or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement. Under Section 16 a contract would be said to have been induced by 'undue influence' where the relations between the parties are such that one of them is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other. This section has been interpreted to mean that the first thing to be considered was the relationship between the parties, that is to say, whether one party was in a position to dominate over the other, and then it must be proved that that position was used to obtain an unfair advantage, and even though the transaction may be unconscionable, relief cannot be granted until the initial fact of the position to dominate the will was established. If such position is proved, and the transaction also appeared to be unconscionable, the burden of proving that the contract was not induced by undue influence would lie on the person in a position to dominate the will of the other. See Raghunath Prasad v. Sarju Prasdd and Rama Patter v. Lingappa Gounder I.L.R. (1934) Mad. 454.

4. It has also been held that a transaction would be voidable as against a third party if it is the result of undue influence and that party took the benefit either as a volunteer or with the knowledge of the exercise of undue influence by a person who was in a position to dominate the will of the executant, as the third party's knowledge of the fiduciary relationship between the parties to a contract and the exercise of undue influence puts that party under the same disability as the other party who occupied the position of confidence : see Rama Patter V. Lingappa Gounder and Lakshmi Dass v. Roop Laul I.L.R. (1906) Mad. 169 It is on these principles that the evidence in this case1 is to be appreciated. The plaintiff has deposed to the use of threats by Laxmibai and her relatives as mentioned above, and he says that when he was asked to execute the confirmation deeids within two months of his attaining majority, he replied that he would do nothing unless he consulted his natural father Abaji who was then away, but that he was told that he need not wait and he must pass the deeds on the next day. He further deposes to the fact that next day two persons, who were friends of the family, viz., Ramgowda and Hanmant, were sent for by Laxmibai to her house and they also told him that there was no need to consult his father, that he had already passed the agreement, and it was necessary in his interest to pass the deeds, as otherwise the result would not be good for him and that he would be troubled. He thought that the threat given to him was real and as a result he ultimately executed the documents.

5. I might observe that the plaintiff's natural father, who had pledged his word with Laxmibai, to have the confirmation deeds passed, was desirous that his son should execute the deeds. He had written letters to the donees immediately after the plaintiff attained majority to come to the plaintiff's village to get the confirmation deeds from the plaintiff. The evidence, however, does not satisfactorily show that the plaintiff was aware of his natural father's desire for the execution of these documents. I will, however, assume that the plaintiff had some knowledge about it, but it seems to me to be sufficiently established, as held by the learned trial Judge, that the plaintiff's natural father was not in the village where the plaintiff and Laxmibai were residing at the time of the execution of the deeds. The defendants, i.e., Laxmibai and one of the donees, namely, her brother Dattatraya, depose that there were no threats given by them to the plaintiff who passed the deeds of his own free will without any objection. In my opinion, having regard to the fact that the plaintiff was living under the authority of his adoptive mother, and having regard to the further fact that he was dependent for his maintenance and education solely upon her under the agreement about the watan property, Laxmibai was in a position to dominate the will of the plaintiff and that the burden would lie upon her to show that no undue influence was used on the plaintiff in taking the deeds. But even assuming that the burden did not lie upon the defendants, both the parties have led evidence, and the question is whether the plaintiff's case of threats and undue influence is established on the evidence. Apart from the statements of the parties themselves, we have two witnesses, namely, Ramgowda and Hanmantrao, and if their evidence is to be believed, the plaintiff's case should be held as substantially established. These witnesses have not been disbelieved by the lower Court, and I do not see any reason to disbelieve them. They are old friends of the family and Laxmibai admits in her deposition that she cannot say why they tell a false story. There is no doubt, to my mind, that these two persons were summoned by Laxmibai when the plaintiff was reluctant to pass the deeds, and subsequently they have also attested these documents. Their evidence is not shaken in cross-examination. Ramgowda deposes that the plaintiff was not willing to pass the deeds, and Laxmibai and some of the donees gave the threats about cancelling the adoption, etc., which the plamtiff alleges; that he told Laxmibai that he would induce the plaintiff to execute the documents, and he told him to pass them as otherwise1 something dangerous might happen. He no doubt says that he did not wish to threaten the plaintiff into passing the deeds but he advised him for his benefit and that the plaintiff listened to him accordingly. The other witness Hanmant also deposes that the plaintiff told him that he would pass the deeds on his father's return after thinking over the matter. He also deposes to the use of threats by Laxmibai and others, that he thought that the plaintiff agreed to pass the deeds unwillingly, and that the plaintiff agreed to pass the deeds as ' I was older and he was to respect an elderly man's advice.

6. The learned trial Judge observes that the testimony of these witnesses would not be proof of undue influence, and that pressure, advice and persuasion have to be used when a party does not readily agree. But although it is true that advice on the part of an elderly person would not by itself amount to undue influence, I think that on the evidence of these two witnesses what is established is not mere advice or persuasion but threats by Laxmibai and some of the donees and a sort of pressing admonition by these two witnesses, and it seems to me that but for the threatening attitude of the adoptive mother and the elderly advice and pressure by the two witnesses, the plaintiff would not have executed the deeds. The only question, therefore, is, would this amount to the exercise of such undue influence as would make the deeds voidable?

7. In considering this question, it is important to note in the first' place that, having regard to the decision of the Privy Council in Krishnamurthi Ayyar v. Krishnamurthi Ayyar the gift-deeds passed by Laxmibai to the several 'donees would not be in any way binding against the plaintiff as family settlements or otherwise because they were clearly detrimental to his legal rights. If, therefore, the plaintiff was to confirm these deeds on his attaining majority, his confirmation would be valid if he acted with a free and open mind and with the knowledge that the gift-deeds which were by themselves invalid could be validated only by his confirmation, for, as observed in Kemp-son v. Ashbee (1874) L.R. 10 Ch. 15 'to constitute a confirmation there must be knowledge of the invalidity of the document. 'There is nothing to show on the evidence that the plaintiff was aware of the legal effect of the deeds. In fact, he does not appear to have been acquainted by any one of his legal rights. He received moral advice as to his duties but not legal advice as to his rights. He wanted time to consider and consult his father which was not given to him. True, his father was in favour of passing the deeds as he had pledged his word to it. Nevertheless the plaintiff was reluctant to pass the deeds without consultation with his father. It might have probably satisfied him about the advisability of passing the deeds or it might have had no effect on his mind. But surrounded and pressed as he was by all persons whose interest clearly lay in the execution of the deeds, it is clear that he had no independent advice and no opportunity to acquaint himself as to his rights. Courts of equity have protected such young persons of tender age who have entered into transactiolns at the instance of those who are in a position to dominate their will. Can the plaintiff be said to be a free agent in the circumstances which are proved? The general principle applicable in such cases is very well summed up in the case of Hall v. Hall (1868) L.R. 1 P. & D. 481. There the case of undue influence was considered with reference to a testator making a will, and the decision in that case applies with greater force to the case of undue influence exercised upon a boy who has just emerged out of minority. The observations in that case are (p. 482) :-

Persuasion, appeals to the affections or ties of kindred, to a sentiment of gratitude for past services, or pity for future destitution, or the like,-these are all legitimate, and may be fairly pressed on a testator. On the other hand, pressure of whatever character, whether acting on the fears or the hopes, if so exerted as to overpower the volition without convincing the judgment, is a species of restraint under which no valid will can be made. Importunity or threats, such as the testator has not the courage to resist, moral command asserted and yielded to for the sake of peace and quiet, or of escaping from distress of mind or social discomfort, these, if carried to a degree in which the free play of the testator's judgment, discretion or wishes, is overborne, will constitute undue influence, though no force is either used or threatened. In a word, a testator may be led but not driven; and his will must be the offspring of his own volition, and not the record of some one else's.

8. Applying that test here, it seems to me that the present case does come within the definition of undue influence embodied in Section 16 of the Indian Contract Act. There are Indian cases also to show that in similar circumstances Courts have granted relief on similar grounds : see Lakshmi Doss v. Roop Laul; I.L.R. (1906) Mad. 169 the judgment of Sankaran Nair J. in Roop Laul v. Lakshmi Doss I.L.R. (1906) Mad. 1 and Rama Patter v. Lingappa Gounder I.L.R. (1936) Mad. 454. The same is the effect of a recent English case, viz. Lancashire Loans Ltd. v. Black [1934] 1 K.B. 380.

9. No doubt, the righteousness of a transaction is one of the factors to be considered, but it is not the only one. All the circumstances connected with it are to be taken as a whole, and taking them as such, I think the deeds are vitiated by threats and undue influence and as such not binding on the plaintiff.

10. It is contended on behalf of the respondents that there has been delay and' laches on the part of the plaintiff in seeking relief as he filed the present: suits nearly three years after the execution of the deeds, and that, therefore, the equitable relief of avoidance of the deeds cannot be granted to him. It is urged that the plaintiff has, really speaking, been put up to file the suits by his father-in-law, who is a lawyer and- under; whose influence the plaintiff' came after his marriage in 1931, and that but for his father-in-law's advice the suits would not have been filed. I will take it on the evidence that it was his father-in-law who advised the plaintiff to launch this litigation. But. even so I do not think that the suits are barred by laches and delay. In the first place, the plea of laches and delay does not apply to the case of a gift as opposed to a contract, as held in Allcard v. Skinner (1887) 36 Ch. D. 145, 173 But even assuming it does, the delay must be taken to begin from the time when the plaintiff discovered the true nature of the deeds. Under Article 91, which is applicable to suits of this kind, the three years' period of limitation, as held in a recent decision of the Privy Council in Someshwar Dutt v. Tirbhawan Dutt (1934) L.R. 61 IndAp 224 : 36 Bom. L.R. 652 runs from the date when the plaintiff discovered the true nature of the deeds. That being the starting point of limitation, the delay or laches must also, be reckoned from that time and not before, and there is nothing to show on' the evidence that the plaintiff discovered the true nature of the deeds and his.-legal rights before he was advised by his father-in-law as to the real nature of the transaction at the end of 1932.

11. I, therefore, answer the point which is referred to me in the affirmative.

12. In First Appeal No. 287 of 1935 there is a further plea that the land given-to the donee was mortgaged by Bhimrao and that he had paid off that mortgage, and that being so, the plaintiff must redeem him and cannot get anything more than a declaration. The parties were not fully heard on this point by the Division Bench, and therefore, sitting alone I cannot decide that point. It will have to be decided by a bench before final orders are passed in this appeal.


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