1973 (3) TMI 143 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the two bonds in suit were duly executed for consideration and by a person competent to do so.
2. Whether the said bonds were obtained by practising fraud and misrepresentation on the defendant No. 1 and were void and unenforceable.
3. Whether the alleged assignment of the said bonds in favour of the plaintiff was bona fide and for consideration and whether the plaintiff is entitled to maintain the suit.

Issue-wise Detailed Analysis:

1. Whether the two bonds in suit were duly executed for consideration and by a person competent to do so:
The bonds in question were executed on behalf of defendant No. 1 by Sri N.L. Bidani, who was admitted to be the General Manager of the company. The court found that the principal object of the defendant No. 1 company was to purchase the Sindwani farm, and the bonds were executed in fulfillment of that objective. The acts of N.L. Bidani were ratified by defendant No. 1 through resolutions passed in meetings, including a resolution dated 29th August 1952, which authorized a payment of Rs. 10,000/- to defendants Nos. 2 and 3. The court concluded that the bonds were executed by a competent person and for consideration, noting that the defendant No. 1 would not have ratified the execution of the bonds if they were obtained by fraud or misrepresentation.

2. Whether the said bonds were obtained by practising fraud and misrepresentation on the defendant No. 1 and were void and unenforceable:
The court found no convincing evidence to establish that the bonds were obtained by fraud or misrepresentation. It was argued that the defendants Nos. 2 and 3 did not disclose defects in their title or the non-existence of the standing crop purportedly sold. However, the court noted that no objections were raised at the time of taking possession of the land, and there was no cogent evidence of fraud or misrepresentation. Consequently, the court upheld the finding that the bonds were for consideration and executed by a competent person without fraud or misrepresentation.

3. Whether the alleged assignment of the said bonds in favour of the plaintiff was bona fide and for consideration and whether the plaintiff is entitled to maintain the suit:
The plaintiff alleged that the bonds were assigned to him by defendants Nos. 2 and 3 through deeds of assignment. The court examined the evidence, including the execution of the assignment deeds and the cheques issued as consideration, and found no plausible reason for collusion or fraud. The court noted that the assignment of an actionable claim under Section 130 of the Transfer of Property Act can be with or without consideration and becomes complete upon execution. The assignors did not challenge the assignment, and the plaintiff provided notice of the assignment to defendant No. 1. The court affirmed that the plaintiff was a bona fide assignee of the bonds for consideration and entitled to maintain the suit, even if the assignments were without consideration.

Conclusion:
The court dismissed the appeal, upholding the trial court's judgment that the bonds were duly executed for consideration by a competent person, were not obtained by fraud or misrepresentation, and that the plaintiff was a bona fide assignee entitled to maintain the suit and recover the debts due under the bonds. The appeal was dismissed with costs.