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Elamma Vs. Fr. Joseph Aranhani Olikkan - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKerala High Court
Decided On
Case NumberS.A. No. 724/99
Judge
Reported in2003(2)KLT536
ActsContract Act, 1872 - Sections 2 and 27
AppellantElamma
RespondentFr. Joseph Aranhani Olikkan
Appellant Advocate S. Sreekumar, Adv.
Respondent Advocate M.C. Nambiar and; M. Rajendran, Advs.
DispositionSecond appeal allowed
Cases ReferredChuni Lal v. Maula Bakhsh
Excerpt:
.....against defendant's son - abstinence from criminal proceedings not a valid consideration for contract - contract not supported by valid consideration is void - held, suit for enforcement of said contract not maintainable. - land acquisition act, 1894 [c.a. no. 1/1894 section 54; [v.k. bali, cj, kurian joseph & k. balakrishnan nair, jj] appeal court fee payable held, court fee is liable to be paid on an ad varolem basis on compensation amount claimed in appeal. - a-1 can it be enforced by them and is not the suit bad for misjoinder of parties? is the lower appellate court correct in law in stating that abstaining from launching criminal prosecution against the third defendant by joseph and others is a good consideration for the first defendant to execute ext. it is also..........disputed the finding of the lower appellate court that ext.a-1 is the result of a novation of the original agreement, it was also contended that ext.a-1 being an unregistered document was inadmissible in evidence and no decree should have been passed on the basis of ext.a-1.8. the first question therefore to be considered is whether ext.a-1 is vitiated by any of the reason stated by the defendants. the lower appellate court proceeded on the basis that the signature in ext.a-1 having been found to be that of the original defendant the burden is on the defendants to show that the same was executed in the circumstances as set up by the defendants. the lower appellate court relied on the decision of this court reported in ahamad v. gangadharan (1990 (1) klt 456). this decision was.....
Judgment:

R. Bhaskaran, J.

1. This second appeal is filed by the defendants 2, 3 and 5 to 11 in a suit for realisation of Rs. 11,057.27. Originally the suit was filed against the sole defendant, Rossa after whose death the other defendants were impleaded as her heirs.

2. The case of the plaintiffs is that the third defendant, son of Rossa owed the above said amount to plaintiffs 2 and 3, that there was a mediation talk and Rossa agreed to pay the amount to the first plaintiff before 30th May 1981. An agreement dated 16th November, 1980 was also executed by her to the above effect.

3. The contention of the original defendant was that no amount was due from her son George and she signed certain blank papers when she was told that her son would be taken to police station as an accused. There was no agreement signed by her knowing it to be an agreement to pay the amount to the first plaintiff or other plaintiffs. The supplemental defendants also contended in the same lines as contended by the original defendant.

4. The trial court found that Ext.A-1 was vitiated by coercion and undue influence and the suit was dismissed. In appeal the Appellate Court held that the signature of the first defendant having been admitted the burden shifts to the defendants to show that it was an invalid document. It is found that by executing Ext.A-1 agreement the first defendant has stood in the shoes of the third defendant from whom amounts were due to plaintiffs 2 and 3 and there is novation and therefore Ext.A-1 is enforceable. It is also found that consideration can be a promise not to pursue the criminal prosecution against the third defendant and the consideration need not necessarily be from the promisee himself. With regard to the admissibility of Ext.A-1 as a mortgage for want of registration the Appellate Court found that Ext.A-1 cannot be considered as a mortgage and no objection was taken at the time the document was admitted in evidence. Thus the lower appellate court allowed the appeal and decreed the suit with costs and future interest against defendants 2 to 11 and to the extent of the property of the deceased first defendant in their hands.

5. The substantial questions of law on which notice was ordered by this Court read as follows;

(a) When there is no privity of contract between 1st plaintiff and 1st defendant can Ext.A-1 creates any valid right?

(b) When the plaintiffs 2 and 3 are not parties to Ext.A-1 can it be enforced by them and is not the suit bad for misjoinder of parties?

(c) Haying admitted that there is no passing of consideration in execution of Ext.A-1 is not an void document?

(d) Whether the principle of novation be applied in the facts and circumstances of the present case?

(e) To constitute coercion in execution of Ext.A-1, is not sufficient to have a threat of criminal prosecution?

(f) When Ext.A-1 creates a charge upon immovable property and is a compulsorily registerable document, non objection of marking the same will make it valid?

6. After hearing the counsel on both sides for sometime, I framed the following additional question of law and the parties were heard on the said question of law also.

'Is the lower appellate court correct in law in stating that abstaining from launching criminal prosecution against the third defendant by Joseph and others is a good consideration for the first defendant to execute Ext.A-1 in favour of the first plaintiff?'

7. Learned counsel representing the appellants Sri Sreelal Warrier argued that Ext.A-1 is not enforceable in law as it was obtained by coercion. He further contended that even if it is found that Ext.A-1 was, as a matter of fact executed by the original defendant after knowing about its contents, it is unenforceable in law as there is no privity of contract between the first plaintiff and the first defendant. The further contention is that the plaintiffs 2 and 3 being not parties in Ext. A-1 they cannot enforce Ext.A-1 against the defendants. The finding of the lower appellate court that a promise not to launch prosecution against the third defendant is a valid consideration in the eye of law is incorrect. Learned counsel also disputed the finding of the lower appellate court that Ext.A-1 is the result of a novation of the original agreement, it was also contended that Ext.A-1 being an unregistered document was inadmissible in evidence and no decree should have been passed on the basis of Ext.A-1.

8. The first question therefore to be considered is whether Ext.A-1 is vitiated by any of the reason stated by the defendants. The lower appellate court proceeded on the basis that the signature in Ext.A-1 having been found to be that of the original defendant the burden is on the defendants to show that the same was executed in the circumstances as set up by the defendants. The lower appellate court relied on the decision of this Court reported in Ahamad v. Gangadharan (1990 (1) KLT 456). This decision was considered by a Division Bench of this Court in the decision reported in Velayudhan v. Velayudhan (2001 (1) KLT 392) and it is held that when a person denies execution of a document mere putting of signature does not amount to admission of the execution of the document. The person should have affixed the signature to the instrument in token of an intention to be bound by its conditions. The signature is put to show that the person who signed has agreed to the terms and conditions of that document. It is only when the signature is put after the document is written that it can be said that the execution of the document is admitted. It is also stated in that decision that the fact that the defendant's thumb impression appears on the paper is a strong piece of evidence in favour of the plaintiff and in the majority of cases very slight evidence would be necessary to prove that the thumb impression was given on the document after it had been written out and completed. Thus, evidence that has to be adduced by the plaintiff in such case will be less onerous than in cases where there is complete denial of signature and execution.

9. It is in the background of the decision of the Division Bench that the question whether the plaintiffs have succeeded in proving that the original defendant signed Ext. A-1 after it was written or whether she signed the blank paper and handed over the same to the first plaintiff is to be considered. To prove that Ext. A-1 was signed by the original defendant after knowing its contents the plaintiffs have examined P.W. 2 who is the scribe of the document. He has given evidence that the document was written in a room of Perubunna Church. It is stated that the signature and the thumb impression was put by the original defendant in his presence. She has signed the document on the stamp affixed in Ext.A-1. He has also stated that the witnesses in Ext.A-1 has signed in his presence. He also denied the suggestion that those persons signed in a blank paper. P.W.3 is a witness in Ext.A-1. Both P.W.2 and P.W.3 have given evidence with regard to the execution of the document and the signature by the deceased defendant. In the absence of anything to discredit their evidence it can be stated that the plaintiffs have succeeded in proving that Ext.A-1 was signed by the original defendant after it was written by P.W.2 and that the plaintiffs have succeeded in discharging the burden of proof as stated in the Division Bench decision referred to earlier.

10. The next question to be considered is whether the defendant has signed the document on the basis of coercion and undue influence exerted by the plaintiffs. According to learned counsel for the appellants Rossa was threatened with a criminal case against her son, the third defendant. To see that the son is not harassed from the police station she has executed the document. Ext.A-1 is executed in favour of the first Plaintiff. There is no case that the first plaintiff has made any coercion or compelled Rossa to execute the document. Moreover there is no case that any case would be registered against Rossa unless she executes the document.

11. Under Section 15 of the Indian Contract Act 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. Mere filing of a complaint cannot be said to be an act forbidden by Indian Penal Code. There is no case of any unlawful detaining of property.

12. To prove coercion the third defendant was examined. He has admitted that he was staying away from the mother for about 25 years and at the time of execution of the document the mother was staying with her brother. He has not been able to give any evidence with regard to the threat or coercion exerted by the first plaintiff or plaintiffs 2 and 3. His evidence is not sufficient to come to the conclusion that his mother executed the document out of coercion as he has admitted that he could not know anything about it. Therefore the story of coercion exerted on the mother has been rightly found against by the lower appellate court.

13. The next point to be considered in this case is whether there is any privity of contract between the first plaintiff and the original defendant and whether there is good consideration for Ext.A-1 agreement. According to the lower appellate court there is novation of earlier agreement,

14. It is stated in the Judgment of the lower appellate court that the principle of novation will apply to the facts of the case. In Ext A-1 it is stated that the third defendant owed certain amounts to plaintiffs 2 and 3 and the first defendant has undertaken to pay the amount to the first plaintiff. For the principle of novation to apply the parties to the original agreement must be parties to the subsequent agreement also. Section 62 of the Indian Contract Act only states that if the parties to a contract agree to substitute a new contract for it or to rescind or alter it, the original contract need not be performed. Illustration (a) to Section 62 of the Contract Act reads as follows:

'(a) A owes money to B under a contract. It is agreed between A, B and C that B shall thenceforth accept C as his debtor, instead of A. The old debt of A to B is at an end, and a new debt from C to B has been contracted.'

In this case the parties to the original transaction (even if it is to be assumed that there was an original agreement) are not parties to Ext.A-1. A Division Bench of this Court in the decision reported in State Bank of India v. Seethavarma (1994 (2) KLT 15) has also taken the view that one of the requisites of novation is the agreement of all the parties to the new agreement. In Ext.A-1 the first defendant has undertaken to discharge the debt allegedly due do the plaintiffs 2 and 3 from the 3rd defendant by payment to the first plaintiff. There is no case that the first plaintiff has obtained assignment of the right of plaintiffs 2 and 3. Therefore the case of novation as found by the lower appellate court cannot be accepted.

15. The further question is whether Ext.A-1 can be enforced between the first plaintiff and defendant and whether there is consideration for the same, Section 2(d) of the Indian Contract Act states as follows:

'When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.'

16. The lower appellate court has held that abstaining from launching criminal prosecution against the third defendant is the consideration for Ext. A-1. Ext. A-1 does not state that the consideration for the agreement was abstaining from prosecution by Joseph and others. It is stated by the lower appellate court that the admitted case of the parties is that the first defendant put the signature on their assurance of not launching criminal prosecution against the third defendant. In the written statement of the first defendant it is stated that some persons came to see her with Kalarikkal Joseph and threatened to send the third defendant to jail in a criminal case and if she wants it to be avoided she must undertake to pay the amount if it is not paid by the third defendant. She was thus forced to sign the papers brought by them. The question is whether it is a good consideration.

17. If the third defendant had committed an offence, then alone he could be subjected to prosecution. If he had not committed an offence, to get a document signed by the first defendant for not launching prosecution against the third defendant for a non-existing offence is by itself an illegal act. If as a matter of fact the third defendant had committed an offence not to register a case and punish him and to agree for such an arrangement also is an illegality. Illustration (h) to Section 23 of the Indian Contract Act reads as follows:

'A promises B to drop a prosecution which he has instituted against B for robbery, and B promises to restore the value of the things taken. The agreement is void, as its object is unlawful.'

Learned counsel for the appellants relied on the decision of Lahore High Court reported in Chuni Lal v. Maula Bakhsh (AIR 1936 Lahore 6). In that decision Lahore High Court held that the contract in suit must be regarded as void for want of consideration as the falsity was known to both parties and when the threat of bringing a false suit is really a form of blackmail and cannot be regarded as good consideration for the contract.

18. The lower appellate court is not correct in law in stating that abstaining from launching criminal prosecution against D-3 by Joseph and others is a good consideration for the first defendant to execute Ext.A-1 in favour of first plaintiff.

19. The learned counsel appearing for the respondents submitted that the original defendant had undertaken the liability of the third defendant by executing Ext.A-1 agreement and the same is enforceable by the plaintiff. For such a contract of guarantee also, there must be some consideration. Section 127 of the Contract Act deals with consideration for guarantee. Illustration (c) to Section 127 of the Act reads:

'(c) A sells and delivers goods to B, C afterwards, without consideration, agrees to pay for them in default of B. The agreement is void.'

In this case also, even accepting the contention of the learned counsel for the respondents, the agreement by the first defendant to pay the amount due from the third defendant is not made on any corresponding promise made by the first plaintiff or plaintiffs 2 and 3. In the light of the above, the substantial question of law (d) and the additional question are answered in favour of the appellants. The second appeal is allowed and the Judgment and Decree of the lower appellate court are set aside and those of the trial court are restored. Parties shall bear their cost throughout.


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