1953 (9) TMI 27 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the deed of assignment was intended to be farzi or benami.
2. Whether the deed is operative according to law.
3. Whether the plaintiff is entitled to a decree for the amount of Rs. 52,308/10/6p.

Issue-wise Detailed Analysis:

1. Whether the deed of assignment was intended to be farzi or benami:

The plaintiff alleged that the registered deed of assignment dated 7-8-1948, executed in favor of defendant No. 1, was a mere benami document. The plaintiff claimed that the defendant No. 1, who managed his business, advised him to execute the deed and a power of attorney to facilitate business management. The plaintiff's second wife, Kamla Bai, testified that the plaintiff was mentally disturbed and influenced by her instructions, which led to the litigation. The court found that the plaintiff's failure to testify weakened his case, especially given the defendant's consistent and plausible explanations. The court concluded that the deed was intended to be an operative document, supported by the defendant's testimony and the circumstances surrounding the execution of the deed.

2. Whether the deed is operative according to law:

The court examined whether the deed, described as a transfer for consideration of Rs. 1000/-, was valid and operative. The deed was executed out of natural love and affection between the plaintiff and his son-in-law (defendant No. 1). The court noted that the inadequacy of consideration does not invalidate a contract if consent is freely given, as per Section 25 of the Contract Act. The court rejected the plaintiff's contention that the deed was farzi, emphasizing that the plaintiff did not prove any undue influence or fraud. The court found that the deed was a valid transfer of the business's goodwill and assets, supported by the defendant's payment of consideration and the registration of the document.

3. Whether the plaintiff is entitled to a decree for the amount of Rs. 52,308/10/6p:

The plaintiff sought a decree for the amount standing to the credit of Devji Shivji & Sons in Lloyds Bank, claiming it belonged to him. The court found that the plaintiff failed to prove his entitlement to the amount, as the deed of assignment was valid and operative. The defendant No. 1 had opened and operated the bank account in the name of Devji Shivji & Sons after the transfer. The court dismissed the plaintiff's claim, concluding that the amount in the bank account belonged to the defendant No. 1 as per the valid deed of assignment.

Conclusion:
The court dismissed the appeal, upholding the validity and operability of the deed of assignment. The plaintiff's failure to testify and the consistent evidence provided by the defendant led to the conclusion that the deed was not farzi or benami but a genuine transfer for consideration. The plaintiff was not entitled to the amount in the bank account, and the appeal was dismissed with costs.