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Ponnayya Moopanar Vs. Suppammal and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Arbitration
CourtChennai
Decided On
Reported in(1946)1MLJ303
AppellantPonnayya Moopanar
RespondentSuppammal and ors.
Cases ReferredRamji Ram v. Saligram
Excerpt:
.....length because it seems to us perfectly clear that the trail court is right in coming to the conclusion that there was nothing in the way offraud, mirepresentation, undue influence or coercion such as to justify the setting aside of this deed. nor is doubt thrown on the validity of this settlement deed by the fact that he bestowed some of his best properties upon his daughters and their offspring without making any immediate provision for his second wife, who, though young a woman, was childless. quite clearly this muchilika ex. this contention must also fail......to certain charity properties which vested in the plaintiff and three days later there was a sale deed executed in favour of an alleged creditor. all the three documents were taken to the registry office on the same day; but there was some seven days delay in the registration of the settlement deed. about a fortnight later the plaintiff executed ex. d-6 dated 11th october, 1939, whereunder he settled on his second wife certain travancore properties not covered by ex. p-1. on the 18th october 1939, the plaintiff-appellant executed a cancellation deed which was duly registered and thereafter, on the 25th october, he sent a notice to the defendants, ex. p-5, in which he sets forth at considerable length his present case that he was wrongly influenced, tricked and defrauded when in a state.....
Judgment:

Wadsworth, J.

1. The appellant sued for a declaration of his title to the properties in schedule A to the plaint on the cancellation of the settlement deed dated 15th September, 1939, executed by him in favour of defendants 1 to 4 and alleged to have been so executed by reason of fraud, misrepresentation, undue influence and coercion. The trial Court on the facts found that there were no materials to justify a conclusion that there was any fraud, undue influence, misrepresentation or coercion invalidating the settlement deed. It also found that the award made by the arbitrator, P.W. 9, on a reference by both parties regarding the dispute arising out of the settlement deed was invalid, not by reason of any misconduct of the arbitrator but because of the invalidity of the reference which, according to the learned Judge is not a complete reference, but only an agreement to make a reference at some future date. The plaintiff appeals.

2. The plaintiff was at the time of the suit aged about 50. His first wife died in 1935 and in 1936 he married a second wife. By the first wife he had three daughters and one son. The eldest daughter is the mother of the fourth defendant and the wife of one Chockalingam who figures prominently in the case. The second daughter is the first defendant who is the mother of the second defendant. The first defendant married a brother of this Chockalingam. The third daughter is the third defendant who herself married Chockalingam after her eldest sister's death. The son died on the 29th April, 1939 and it is his death which, it is alleged, upset the mind. of the plaintiff to such an extent as to make him amenable to improper influence.

3. At the time of the marriage of the plaintiff to his second wife there was a settle-ment in her favour of some property. The settlement now attacked was executed on the 15th September, 1939, that is to say, nearly five months after the death of the settlor's son. It is evidenced by Ex. P-1. On the following day the settlor executed a power of attorney in favour of his son-in-law Chockalingam with reference to certain charity properties which vested in the plaintiff and three days later there was a sale deed executed in favour of an alleged creditor. All the three documents were taken to the registry office on the same day; but there was some seven days delay in the registration of the settlement deed. About a fortnight later the plaintiff executed Ex. D-6 dated 11th October, 1939, whereunder he settled on his second wife certain Travancore properties not covered by Ex. P-1. On the 18th October 1939, the plaintiff-appellant executed a cancellation deed which was duly registered and thereafter, on the 25th October, he sent a notice to the defendants, Ex. P-5, in which he sets forth at considerable length his present case that he was wrongly influenced, tricked and defrauded when in a state of depression owing to his loss and improperly induced to execute a settlement deed. As the result of this notice there was contest over the patta transfer proceedings and we are informed that there was also pro-ceedings before the Magistrate under Section 144 of the Code of Criminal Procedure. On 18th January, 1940, Ex. P-6 was executed. This purports to be a muchilika in favour of the arbitrator, P.W. 9, executed by the settlor (plaintiff) and by the first and third defendants, his surviving daughters, by Chockalinga as father and guardian of the minor fourth defendant and by Arumuga Nainar as father and guardian of the minor second defendant. This document recites:

There have been some disputes between individual No. 1 and individuals Nos. 2 to 5 in respect of the settlement deed which has been executed by individual No.1 of us in favour of individuals Nos. 2 to 5 in respect of the former's moveable and immoveable properties and which has been registered on 27th September, 1939 ... and in view of the unnecessary expenses and losses and trouble which may befall the family on account of the said disputes, we have wholeheartedly executed this muchilika in your favour, agreeing that we would file the necessary written records as well as written statements before you, with regard to the aforesaid disputes that you may examine us personally and also the said documents and statements, etc., that you may make an award according to your conscientious opinion and that we would abide by your decision and act accordingly. If any one of us should act in defiance of the award to be given by you in pursuance of the said muchilika we agree hereby that the one-sided award to be passed by you shall be final. We shall produce the said documents and the statements to be given by us, within one week from this day. In case any one of us should fail to produce before you the statement or records, or if we should fail to appear on the dates to be fixed by you or if we should fail to adduce proof through witnesses we shall be bound by and act according to the decisions to be given by you; and we have executed this muchilika agreeing hereby to the above terms....

4. The arbitrator, P.W. 9, is apparently a man of great wealth and considerable standing and he appears to have been somewhat leisurely in taking the enquiry. According to his evidence, which the learned trial Judge believes, he was eventually pressed by the plaintiff and his son-in-law Chockalingam to take up the arbitration at once and as a consequence of this pressure he fixed 18th October, as the date of the enquiry and in order that everything should be on record, he also issued registered notice vide Ex. P-7, dated 13th October, 1940, requiring the parties to attend with their witnesses and to file written statements of their contentions. It is common, ground that these notices were received. On the 17th October, Chockalingam despatched a notice to the arbitrator by registered post. This recites the fact of the reference to arbitration and states that the date of the hearing being fixed for 18th October and notice having been given, the sender went to Tinnevelly and made enquiries ' in order to prepare the statement and get it ready ' and then he was told that it was improper to refer a matter to arbitration on behalf of minors and that this might lead to litigation after the minors attained majority. Therefore he was giving notice that, inasmuch as the muchilika is beyond the authority of the writer he is not willing to have the hearing completed. This notice, being sent by registered post, took two days in transit. It appears to have been delivered on the 19th October, in the village, but the addressee being absent it was taken back and eventually delivered to him on the 22nd. Meanwhile the arbitrator, P.W. 9, took up the enquiry on the morning of the 18th October. He was then informed by the husband of the first defendant, D.W. 2, That Chockalingam would arrive at 5 P.M. with witnesses and ask for time and accordingly an adjournment was given until that time. At 5p.m. nobody was there on behalf of the defendants. The arbitrator therefore proceeded to examine a number of witnesses produced by the plaintiff and late at night, on the conclusion of the enquiry, he announced his decision that in the circumstances the settlement deed should be set aside. This decision was embodied in a fairly elaborate written order which was completed the following day and signed by the arbitrator.

5. A great deal of the judgemtn of the trial Court is taken up with a consideration of the circumstances on which the plaintiff relies as indicating that the settlement deed Ex. P-1 was brought about in such circumstances that it never was a valid document. We do not propose to go into this evidence at length because it seems to us perfectly clear that the trail Court is right in coming to the conclusion that there was nothing in the way offraud, mirepresentation, undue influence or coercion such as to justify the setting aside of this deed. No doubt the deed was executed when the plaintiff was staying where he was to some extent subject to the influence of the beneficiaries and it may be likely that he was persuaded by them to make the gifts that were embodied in the deed. It is equally clear that after he completed this transaction he went elsewhere and came under the influence of his second wife's relatives and he was then persuaded to make a substantial settlement in favour of the second wife. The fact that the plaintiff is amenable to persuasion os by no means a sufficient grounf for setting aside transactions which he has executed when in full possession of his faculties. The theory that he was so beside himself with grief as not to know what hw was doing is on the face of it absurd, for these transactions took place nearly five months after the death which is alleged to have upset his equanimity. The plaintiff is not a young boy; nor is he an old man in his dotage. He is a man in the prime of life and his evidence in the box shows that he is not a person of a low grade of intelligence. Nor is doubt thrown on the validity of this settlement deed by the fact that he bestowed some of his best properties upon his daughters and their offspring without making any immediate provision for his second wife, who, though young a woman, was childless. After all he had already made a settlement on the second wife and as the events show, hw was prepared to make a further settlement which would be a fair provision for her and any child that she might have. The plaintiff in his anxiety to make up a case of undue influence falsely stated that the properties covered by Ex. P-1 were worth Rs. 30,000 and for that false statement he has had to make out that the settlement in favour of the defendants was a settlement of substantiallly all his property, which was certainly not the case. The learned Judge of the trial Court finds that the properties covered by Ex. P-1 would be worth not very much more than the amount of Rs. 4,000 at which they were valued in the deed itself and that the amount bestowed upon the second wife by the later deed Ex. D-6 is not totally disproportionate. There are, therefore, in the circumstances of the execution of this deed and the conduct of the plaintiff himself no materials sufficient to justify a conclusion that it was ab initio a void or voidable document.

6. There is, However, the decisive fact that the dispute between the parities regarding the validity of Ex. P-1 was referred to and arbitrator who, after what appears to have been a regular enquiry, has found that the settlement should be set aside. If this placed before the arbitrator, the plaintiff is entitled to treat the settlement as void. Now the learned Subordinate Judge has come to a conclusion which we find it rather difficult to understand. He points out that the muchilika Ex. P-6 requires the parties to produce statements befor the arbitrator at some later date and he observes:

The whole of this muchilika proceeds on the footing that the matters in dispute between the parties had to be later mentioned to the arbitrator by them and that this muchilika is only an agreement to refer their disputes and not and not an actual refrernce

and he comes to the rather surprising conclusion that because one set of parties did not appear and make a statement regarding their claims, there was no actual reference at all which the arbitrator was competent to decide. Quite clearly this muchilika Ex. P-6, is not and does not purport to be, a mere agreement to make a reference at some future date. It is no doubt an agreement and so must necessarily be any reference to arbitration outside the Court. But if it purports of itself to be an instrument which clothes the arbitrator with jurisdiction to make an enquiry and give an award, the fact that the enquiry is to take the usual form of getting written statements from both parties and examining witnesses before the award is given, is certainly not a ground for holding that the agreement is not a reference.

7. At attempt has been made in the course of argument to put the objection in rather a different way. It has been suggested that although the parties did intend Ex. P-6 to be a reference to arbitration, the subject-matter of the dispute is described so vaguely that the contract embodied in the reference must be deemed to be void for uncertainty. This contention must also fail. There is, in our opinion, no uncertainty whatever about this reference. The document refers to the dispute between the parties in respect of the particular settlement deed of which full details are given. The attitude of the plaintiff in attacking this settlement deed has already been set forth at some length in the notice Ex. P-5 given to the defendants and the disputes had been to a considerable extent crystallised in the patta transfer proceedings and the criminal proceedings. Everybody knew what the dispute was about and what was the attitude of both the parties. There is no such uncertainty regarding the matter referred as could not be cleared up in a very brief enquiry by the arbitrator. It is, moreover, not the rule that an agreement to submit a dispute to arbitration should set forth in full detail every matter which is in dispute. A common form in use in England is ' All disputes arising out of the contract ' and in Russell on ' Arbitration ' the suggested form for submission to arbitrators of disputes arising out of a contract for purchase runs as follows:. Whereas by an agreement dated. . and whereas disputes and differences exist between the said (vendor) and the said (purchaser) respecting the said agreement and otherwise relating the promises. Now these presents witness that it is hereby agreed as follows, that is to say : (1) All disputes and differences which exist between the said parties and also all other disputes and differences that may, at any time or times before the last ten days immediately preceding the day which shall be appointed by the arbitrator hereinafter named for his first sitting in the arbitration to be made in pursuance of these presents exist between the said parties, or any matters and things relating thereto, or arising out of the said agreement, shall be referred to the arbitration of...

When such a wide form is prescribed in the standard work for arbitration, it seems to us absurd to contend that the much more precise indication of the subject-matter of the dispute referred to the arbitrator in this case is, of such uncertainty as to make the agreement void. We have no doubt that the reference to arbitration in Ex. P-6 is complete and sufficient.

8. An attempt has been made to suggest that the award is bad by reason of some not very clearly defined misconduct on the part of the arbitrator. The arbitrator is alleged to have rushed the enquiry and not given time to the defendants to resile from the arrangement. The arbitrator himself has said that he was being pressed by both parties to finish the work and that he gave an adjournment of the extent asked for by D.W. 2 on the day fixed for the arbitration. His evidence is accepted by the learned trial Judge and we see no reason to take a different view. Nor can we accept as proved some vague suggestions that there may have been misconduct in avoiding the receipt of cancellation notice until after the result of the arbitration had been reduced to writing. The arbitrator is evidently a man of local position and there is no apparent reason for him to favour either side.

9. A further point taken by the respondents relate to the position of the minors with reference to this award. No doubt the reason given by Chockalingam for resiling from the arbitration agreement was a doubt raised regarding the legality of arbitration on matters in which minors were concerned. But there is no specific plea in the defendants' written statement that the award is not binding on the minors as such or that it is invalid because it is the result of a reference which was not for the benefit of the minors or was the result of misconduct on the part of the minors' guardian. It cannot, we think, be contended that the natural and legal guardian of a minor is incompetent to make a reference to arbitration on a matter with regard to which a reference is for the benefit of the minors. The cases on the point are summarised in Ramji Ram v. Saligram (1911) 14 C.L.J. 188. The question whether the minors when they attain majority can attack this arbitration or claim anything under the settlement deed as unaffected by the award of the arbitrator, is one which we cannot now decide and we leave it open to be decided if and when it is raised before a competent Court by the minor executants, second and fourth defendants on attaining majority. For the present it is sufficient to state our opinion, that the plaintiff is entitled to claim that by reason of the award of the arbitrator, the settlement deed has been cancelled and that he has a right to recover the properties granted thereunder.

10. The position of one item of these properties is peculiar. The plaint seeks relief only in respect of the properties in schedule A. Item 2 of schedule B was sold by defendants 1 to 4 under Ex. D-4 on 20th December, 1939, to the fifth defendant. This sale was after the plaintiff purported to cancel Ex. P-1 but before there was any reference to arbitration. The curious feature of the present case is that the plaintiff also asserts that he has sold this item to a third party and he does not claim any relief with reference thereto. Yet he impleaded the fifth defendant in the suit and he has impleaded him in the appeal, asserting that he is a necessary party. It seems to us that in view of the fact that the plaintiff is not claiming any right in this property now and in view of the fact that the fifth defendant obtained title at a time when there was subsisting an apparently valid settlement deed in favour of his vendors, the suit had necessarily to be dismissed so far as he was concerned with costs and he is also entitled to the dismissal of the appeal as against him with costs.

11. In other respects the appeal is allowed and the plaintiff will have a decree declaring his right to the properties in schedule A, the settlement deed being cancelled in so far as it relates thereto, subject, however, to any right which the minor defendants may have on attaining majority to attack the award which is the basis of this decision. The plaintiff will also be entitled to recover possession of the property in schedule A and mesne profits from the date of the plaint.

12. As regards the costs payable by defendants 1 to 4 it seems to us that the amount of costs has been unduly inflated by the untrue assertion of the plaintiff that the properties were worth Rs. 30,000 when they are in fact worth approximately Rs. 4,000. The plaintiff will therefore be entitled to recover costs in the suit and in the appeal from defendants 1 to 4 at the rate at which they would have been payable had the suit and appeal been valued at Rs. 4,000.


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