9911796707
TMI Blog1953 (9) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and also a power of attorney dated 21-8-1947 constituting the defendant No. 1, one Mohanlal Odhabji Thacker and his wife Kamla, Bai as his attorney and authorising them to manage the affairs and the property including the business known as Devji Shivji & Sons. According, to the plaintiff's allegation, shortly before the institution of this suit he had come to know that the defendant No. 1 had opened an account in the name of Devji Shivji & Sons in the Bank of India Limited, Calcutta, and had deposited, with the bank some cheques which had been received from customers as the price of the coal business of the plaintiff which was carried on under the name and style of Devji Shivji & Sons and that after closing the said account he had opened another account with the Lloyds Bank Limited in the name of Devji Shivji & Sons and had deposited with them cheques received from the customers as the price of coal and had been operating the same account. A cheque for ₹ 42,637/10/- had been received; from the plaintiff's customer Messrs. Indian General Navigation and Railway Company Limited, Calcutta, for the value of coal supplied to them in April, 1948, and this cheque had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a power of attorney appointing not only the defendant No. 1 but also Mohanlal Odhabji Thacker, son of Odhabji Narsi Thacker and his wife Kamla Bai, as attorney to do for him and on his behalf and in his name and also in the name of Devji Shivji & Sons the acts and deeds specified in the document. The deed of assignment and the power of attorney were registered on one and the same date, that is, on 21-8-1947. Mr. R.S. Chatterji placed strong reliance on this power of attorney which, in his opinion, supports the plaintiff's allegation that the deed of assignment, which had been executed earlier, was a sham and a benami document. The points which really arise are, (1) whether the deed was intended to be farzi or benami; (2) whether it is operative in law; and (3) whether the plaintiff is entitled to a decree for the amount of ₹ 52,308/10/6p, which consists of the following two items; (i) ₹ 967l/0/6p and (ii) 42,637/107. The defendant had produced the draft of a document which purports to be a deed of gift and which, according to the defendant, the plaintiff wanted to execute in favour of his daughter Parbati Bai. The properties, which, according to the defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in his favour was intended to be an operative document and has been operative ever since the date of its execution, but that the lady has now prevailed upon her husband to institute this suit for setting aside the deed. It is curious to hear from the lady that her husband did not even know that she was deposing in this case. It is a bit difficult to accept her statement that the plaintiff was not aware of her deposition in this case, but it is very strange to have this statement from her that her husband would be mentally upset if he knows about her deposition in this case. There are certain other statements also in her deposition which deserve a serious notice, e.g., she says that the defendant No. 1 and his father came to her husband with stamp paper for writing a deed of transfer of the house property. She has further stated that the benami transfer of the goodwill-of the business took place before the talk about the transfer of the house property and that the stamp in respect of the transfer of the house-property might have been purchased a few days before or later than the date of the purchase of the stamp for the transfer of the goodwill. All these statements cumulative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the document was intended to be a benami document and that the plaintiff had no intention of making any provision for his daughter Parbati when the plaintiff has not come forward to depose as a witness in this case, and when the defendant has put forward certain circumstances which go strongly to support his allegation that out of love and affection for Parbati the plaintiff had at first thought of gifting his house properties to her and, later on, alter his wife objected to the gift of the house properties, conveyed to his son-in-law the goodwill and the assets of his fairly flourishing business, namely, the coal business. 7. The plaintiff has miserably failed to show the motive for a benami transaction of this nature. The plaint says that in August, 1947, the defendant No. 1 advised the plaintiff to execute a farzi and a benami deed of assignment in his name in respect of the business of Devji Shivji and Sons and represented to the plaintiff that the deed would enable him to manage the business in case of long and continuous absence of the plaintiff from Jharia on account of the illness of his son. This is the only reason given in the plaint for executing the deed of assignment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ues and look after the business. Devji Babu only signed the cheques. It is not a fact that Devji Babu signed the cheques as he continued to be the malik of the firm." Devji Shivji used to purchase coal from big firms like Jardine Henderson Ltd.; Andrew Yule Ltd.; Shaw Wallace and Company and Barari Coke Company Ltd. and it is really very doubtful that these firms would have shown the same regard for the defendant No. 1 which they had for Devji Shivji. After all, there was the relationship of father-in-law and son-in-law, and the plaintiff who is a fairly rich man had not been treating his children by his first wife with indifference. Even according to the statement in the plaint the defendant No. 1 had been looking after the business of the plaintiff, and it is for the conduct of the business that the deed of assignment was executed in his favour. I find it a bit difficult to accept the version of the plaintiff that the deed of assignment was executed because the defendant No. 1 represented to the plaintiff that this deed would be useful for the purpose of managing the business. A deed of assignment would not be of any use for the purpose of management, though a power of att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he was absent at Calcutta in April or May, 1948, the deed of assignment was removed from his suit case. The presumption which ordinarily attaches to the production of the original document by one who claims that it is a farzi and a benami document would vanish, if there is evidence to show that the document was originally in the custody of the intended beneficiary. As a matter of fact, if the case has to be decided on the evidence, certainly the statement of the defendant No. 1 as to the loss of the document should be accepted, and there is no reason for supposing in this case that the document had never come in the custody of the defendant No. 1. I am, therefore, of the opinion that the production of the original document by the plaintiff in this case does not at all advance his case of farzi. (His Lordship discussed other evidence and concluded :) 9. Thus, on a consideration of the entire circumstances, the conclusion seems to be irresistible that the deed of assignment was intended to be an operative document. 10. The next question is whether the deed is valid and operative according to law. Though the learned Subordinate Judge has observed that "when the idea of the deed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r present consideration. Explanation 1 of the section says that nothing in the section shall affect the validity; as between the donor and donee, of any gift actually made. And Explanation 2 runs as follows : "An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate; but the inadequacy of the consideration may be taken into account by the Court in determining the question whether the consent of the promisor was freely given." There are two illustrations given in the section which must be referred to in this connection. And they are Illustrations (f) and (g). "(f) A agrees to sell a horse worth ₹ 1,000 for ₹ 10. A's consent to the agreement was freely given. The agreement is a contract notwithstanding the inadequacy of the consideration. (g) A agrees to sell a horse worth ₹ 1,000 for ₹ 10. A denies that his consent to the agreement was freely given. The inadequacy of the consideration is a fact which the court should take into account in considering whether or not ' A's consent was freely given." The position in this case is that the agreement is made on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Bengal v. Juggeswar Roy', 3 Cal 192 (PC) (C) that a party seeking to set aside a transaction on the ground of inadequacy of consideration, must show such inadequacy as would involve the conclusion that he either did not understand what he was about, or was the victim of some imposition. Their Lordships quoted with approval the following observation of Lord Westbury in --'Tennents v. Tennents', 2 Scot AR 6 (D). "The transaction having been clearly a real one, It is impugned by the appellant on the ground that, he parted with valuable property for a most inadequate consideration. My Lords, it is true that there is an equity which may be founded upon gross inadequacy of consideration, but it can only be where the inadequacy is such as to involve the conclusion that the party either did not understand what he was about, or was the victim of some deposition." In 'Gravely v. Barnard', (1874) 18 Eq 518 (E) it was held that a legal consideration of any value is sufficient to support a contract in partial restraint of trade and that the Court will not enquire as to its adequacy. A small consideration may support an extensive promise, and mere undervalue ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
