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Jagadamba Prosad Lala Vs. Badri Prosad Jhunjhunwala and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtKolkata
Decided On
Reported inAIR1937Cal203
AppellantJagadamba Prosad Lala
RespondentBadri Prosad Jhunjhunwala and ors.
Cases ReferredMina Kumari Bibi v. Bijoy Singh Dudhuria
Excerpt:
- .....to suspicion, of which full benefit has been given to the contesting defendant, defendant 1 in the suit. the decree passed in the suit for partition based on the award of the arbitrator to which reference has been made above, was never before challenged in any proceeding by any of the parties concerned. the decree based on the arbitrator's award and the award itself had been completely given a go-by for the reasons which do not commend, themselves to us. the decree was to be treated as one conclusively determining the rights of the parties to the same, unless set aside or proved by definite evidence to be fraudulent or collusive. it was open to the parties concerned to have the decree based on the award of the arbitrator set aside on the ground of fraud or any other ground known to law......
Judgment:

1. The plaintiff in the suit in which this appeal has arisen prayed for a declaration of his right to the half-share of the Patni Lot Bamantore described in Clause 2, Sch. 1 to the plaint, and for confirmation of possession, or if the Court found that the plaintiff was out of possession of the whole or any portion of the property in suit, for recovery of possession thereof. The case of the plaintiff may be briefly stated: The Patni Lot Bamantore belonged to one Ram Bandhu Chatterji; Ram Bandhu mortgaged the same to defendant 2 and one other person; the half of the amount of the consideration money for the mortgage was paid by defendant 2 from out of the fund owned by the joint family consisting of defendant 2, his brother defendant 3, and his three step-brothers; there was a sale in pursuance of a decree for enforcement of the mortgage, passed in 1914, and the property was purchased by defendant 2 with his own money; defendant 2 then obtained possession of the property as purchaser at a mortgage sale in the year 1920; there was a suit for partition; brought by the step-brothers of defendant 2 against him and defendant 3 in the year 1917; the suit was disposed of in terms of an award given by the Raja of Panchkote who was appointed an arbitrator in the proceeding. As a result of the decree in the partition suit, passed on 9th February 1923, the money due from the mortgagor Ram Bandhu Chatterji on the mortgage mentioned above, was allotted to the share of defendant 2 alone to the exclusion of the other brothers, defendant 3 and the step-brothers. According to the plaintiff, defendant 3 had not, therefore, any claim, right, title or interest in the property now in dispute. The property, along with some other items of property, was mortgaged by defendant 2 to the plaintiff on 10th September 1927; and on 24th May 1930 the plaintiff obtained possession of the property under the terms of a decree for foreclosure, passed in his favour on 29th March 1930. The plaintiff asserted that he was a bona fide purchaser from the ostensible owner for valuable consideration.

2. The claim in the suit was resisted by defendant, 2. The plaintiff's suit was characterised by the contesting defendant as mala fide and false. The gist of the defence was that the plaintiff knowing and having reasons to believe that the brothers, defendants 2 and 3, were jointly in possession of the disputed property and that they were both owners of the same, entered into a collusive and unreal dealing with them, and having acted with the knowledge of the actual rights and possession of the brothers, could not be allowed to invoke the aid of any legal or equitable doctrine in support of any transaction against defendant 1, the creditor and purchaser of defendant 3's interest. It was asserted that, even assuming, but not admitting, that the plaintiff did advance any money on the basis of a real mortgage as alleged in the plaint, he had no right to claim any share of defendant 3. The reference to the arbitrator in the partition suit of 1917 was, according to defendant 1, collusive and fraudulent, and the award of the arbitrator, the Raja of Panchkote, was collusive and fraudulent, and the decision of the Court in the partition suit of 1917 based on the award was never acted upon; the award was merely a contrivance to keep the property in the name of defendant; 2 for the benefit of defendant 3. Defendants 2 and 3 were in joint possession ever since their purchase at the mortgage sale, and defendants 2 and 3 having been involved in debts, they both possessed the property in the benami of defendant 3's son. With reference to the mortgage executed by defendant 2 in favour of the plaintiff on 20th September 1927, and the decree passed in the suit for foreclosure on the footing of that mortgage, it was said that the mortgage and the decree on the basis of which the plaintiff claimed his title to the property in suit, were neither real nor bona fide, but were only collusive paper transactions resorted to with the ulterior purpose of defrauding the creditors of defendants 2 and 3, and that the plaintiff had acquired no title thereunder.

3. Defendant 2 filed a written statement. In his written statement, that defendant supported the case of the plaintiff as stated in the plaint. He admitted the statements made by the plaintiff in his plaint to be true. It was asserted by defendant 2 in his written statement that the Patni Lat Bamantore, belonged exclusively to him, and that defendant 3 had no right, title or interest in the same. With reference to the mortgage executed by defendant 2 in favour of the plaintiff on 20th September 1927, definite statements were made by defendant 2 in his written statement that he had to raise money by the said mortgage, and stated facts and circumstances going to indicate the reasons why money had to be raised on mortgage executed by him on 20th September 1927. The substantive case of the contesting defendant 1 was that he had purchased half share of the property in suit at a sale in execution of a money decree passed in favour of one Pran Krishna Chatterji, against defendant 3 and his wife on 28th July 1926, by the Subordinate Judge at Asansole; after the sale, certificate was granted to him on 14th July 1930 and he obtained delivery of possession on 21st July 1930, defendants 2 and 3 filed two claim cases in the names of the sons of defendant 3, which came to be dismissed. A suit brought after the dismissal of the claim cases was dismissed on 14th December 1931. There was also an application for setting aside the sale in execution, at which defendant 1 was the purchaser, made by defendant 3, which was rejected on 30th June 1930. Defendant 1 asserted that at the last resort defendants 2 and 3 had instituted a suit in the name of the plaintiff who was a benamidar and who had never any possession.

4. On the pleadings of the parties concerned, material issues framed in the suit were Issues (5), (6), (7), (8) and (9): (5) Were the plaintiff's alleged mortgage and the decree obtained thereupon fraudulent and collusive? Did any consideration pass for that mortgage? (6) Was the said mortgage validly executed, attested and registered? (7) Was the property in suit the joint property of defendants 2 and 3 or was defendant 2 alone the sole owner of the same? (8) Was defendant 2, karta of any joint family consisting of himself and defendant 3, his brother? (9) Has the plaintiff got his alleged right, title and interest in the disputed properties described in the schedule annexed to the plaint? The learned Subordinate Judge, who tried the suit, has stated in his judgment, that the primary question, and in fact the sole question, for consideration in the suit was whether the property described in Clause 2, Sch. 1, to the plaint belonged to defendants 2 and 3 jointly and in equal shares, or whether the same belonged exclusively to defendant 2, Jugal, alone. According to the Judge in the Court below, that question was the pivot upon which the entire wheel of the subsequent events totally turned. The decision of the Judge in the Court below was that the plaintiff was merely a benamidar for defendants 2 and 3, that he had never any possession of the property; that his mortgage was a fraudulent and collusive document, and no consideration passed for it and that it was merely a shield for protecting the properties of defendants 2 and 3 from the attacks of their numerous creditors among whom defendant 1's predecessor, Pran Krishna Chatterjee, was admittedly one. The award according to the Judge in the Court below, was vitiated with the same vice; and the same perfidious conduct was visible throughout, and the plaintiff was an old and probably also a trusted friend of defendants 2 and 3, and so, of all persons, he was selected as the benamidar for saving this property. The plaintiff's suit was dismissed on the ground that he had acquired no title on the alleged mortgage executed in his favour by defendant 2 on l0th September 1927. The plaintiff appealed to this Court. There can be no question that the contesting defendant sought to defeat the claim of the plaintiff on the footing that the transactions referred to in the plaint, on which the claim for relief made by the plaintiff was based, were benami in their nature, and that there was want of consideration, so far as the mortgage of 20th September 1927 was concerned. The Court below has based its decision on the conclusion arrived at by it, which was of the following description:

It was but natural that devices should have been adopted for protecting his properties by keeping them in the solitary name of his brother Jugal. That they were really devising such means is evident, as admittedly some properties were made benami in the name of Promatha's son Dharanidhar. The whole affairs are brought out in their true colour if we further enquire into the manner in which the mortgage in favour of the plaintiff was executed in Calcutta, and also look into certain letters and other documents which take us to the very root of the entire conspiracy between the plaintiff, Jugal and Promatha.

5. The materials on the record have received our careful consideration; and on those materials we are constrained to say that the decision of the Judge in the Court below rests on suspicion and not upon legal grounds established by legal testimony. The evidence on the record such as it is, leads to the conclusion that the legal proof was on the plaintiff's side. There might have been some indirect signs, gathered from oral evidence, leading to suspicion, of which full benefit has been given to the contesting defendant, defendant 1 in the suit. The decree passed in the suit for partition based on the award of the arbitrator to which reference has been made above, was never before challenged in any proceeding by any of the parties concerned. The decree based on the arbitrator's award and the award itself had been completely given a go-by for the reasons which do not commend, themselves to us. The decree was to be treated as one conclusively determining the rights of the parties to the same, unless set aside or proved by definite evidence to be fraudulent or collusive. It was open to the parties concerned to have the decree based on the award of the arbitrator set aside on the ground of fraud or any other ground known to law. That was not however done at any stage. The mortgage executed by defendant 2 in favour of the plaintiff and the decree following upon it, were challenged by defendant 1 for want of consideration for the mortgage, and the transaction of mortgage was characterised as collusive and fraudulent. It would appear that the transaction of mortgage was treated by the parties to it as bona fide; and the mortgagor, defendant 2, has even in the present litigation affirmed the transaction, as evidenced by his written statement filed in Court, to which reference has been made. It is somewhat difficult to appreciate the position how a person in the position of defendant 1 could dispute the payment or non-payment of consideration, its adequacy or inadequacy, unless it was established by clear and cogent evidence that the mortgage was never intended or designed to operate as a real transaction or to affect a transfer of title: see in this connexion Lal Achal Ram v. Raja Kazim Hussain Khan (1905) 27 All 271 and Kamini Kumar Deb v. Durga Charan Nag AIR 1923 Cal 521.

6. It appears further that all proceedings before the Court to which reference was made in detail in the plaint and some of which were referred to in the written statement filed by defendant 1 in the suit, the decree in the partition suit of 1917, the decree passed on mortgage executed by defendant 2 in favour of the plaintiff passed on 29th March 1930, the claim cases by the sons of defendant 3, the application for setting aside the sale in execution of the decree at which defendant 1 was the purchaser, the suit instituted after the claim cases had been disallowed, have all been characterised by the trial Court as mere devices for saving defendant 3's property, parts of concerted action for shielding a transaction which was entirely benami in its nature. It may be taken to be well established that though in oases of alleged benami transactions, there may be grounds for suspicion, the Court's decision however must rest not upon suspicion: see Mina Kumari Bibi v. Bijoy Singh Dudhuria AIR 1916 P C 238. The Courts are required to be astute in the detection of fraud; they were not however justified in finding it on grounds which did not show more than its possible existence. 'When acts of parties admit of a reasonable interpretation in favour of honesty and fair dealing, they should receive it; tangible facts must be proved from which a legimate inference of fraudulent intent could be drawn. In the case before us, in addition to the oral evidence of one of the witnesses for defendant 1, Rakhal Das Chakravarti, and some letters like Exs. A-8 and A-10, there was no evidence on which a suspicion even could be based, if the evidence afforded by the deposition of the witness referred to above and the letters mentioned above could be believed.

7. In our judgment, a decree in favour of the plaintiff in the suit cannot be sustained on the present state of the record; and we have come to the conclusion that there should be a remand of the case for enabling the parties concerned to bring before the Court evidence in support of their respective cases, relating to the following points: (1) Whether the reference to arbitration, followed by a decree of the Court on the award of the arbitrator passed on 9th February 1923, could be considered to be a part of a device for protecting the properties of defendant 3, by having recourse to colourable and benami transactions and proceedings, as alleged by the plaintiff. (2) Whether defendant 1 could be allowed to challenge the mortgage of 10th September 1927, executed by defendant 2 in favour of the plaintiff and the decree following upon the same, regard being had to the subsequent conduct of the parties to the same. (3) The nature and effect of the possession, if any, of the son or sons of defendant 3 and the effect of the same on the question of benami as raised by defendant 1 in the suit.

8. With a view to arrive at a proper decision on evidence, it would be open to the Court below to take further evidence in the case, both oral and documentary, and special attention should be given to the case set out in the written statement filed in the suit by defendant 2. In the result, the decision and decree of the trial Court, dismissing the suit of the plaintiff-appellant, are set aside, and the case is remitted to that Court for a fresh decision, keeping in view the position indicated in this judgment. The costs in the litigation, including the costs in this appeal, are to abide the result after remand.


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