Prabha Kaul (Deceased) Through Lr vs Chandra Kaul Muthoo & Ors
2013 Latest Caselaw 3461 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                         Date of Decision: 6th August, 2013.

+             RFA 164/2010 & CM No.4991/2010 (u/O 41 R-27 CPC)

       PRABHA KAUL (DECEASED) THROUGH LR     ..... Appellant
                   Through: Mr. Ravi Mohan Kaul LR/son of
                            appellant.

                                Versus

    CHANDRA KAUL MUTHOO & ORS                ..... Respondents
                  Through: Mr. Ateev K. Mathur, Mr. B. Bansal
                           and Ms. Richa Oberoi, Advs. for R-3.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J.

1. The appeal impugns the judgment and decree dated 30th November,

2009 of the Court of the Additional District Judge (ADJ), Delhi of dismissal

of Suit No.68/08/97 filed by the appellant since deceased and now

represented though her legal representative.

2. Though the appeal came up first before this Court on 18th March,

2010 but notice thereof was issued only on 26th April, 2010. The appeal

was not accompanied with any application for interim relief but CM

No.8956/2010 for interim relief was filed thereafter and which came up

before the Court on 14th May, 2010 when notice thereof was also issued.

Vide subsequent order dated 6th July, 2010, the respondents No.1 & 2 were

restrained from appropriating the sum of Rs.30.68 lakhs which stood

released to them by the respondent No.3 Standard Chartered Bank Ltd. The

said interim order was made absolute on 6 th February, 2012 and the appeal

admitted for hearing. Thereafter, application for substitution of the legal

heirs of the appellant was filed and which was allowed on 10th May, 2013.

3. None has been appearing for the respondents No.1 & 2 since 19 th

October, 2010. Mr. Ravi Mohan Kaul, one of the legal representatives of

the deceased appellant appearing in person and the counsel for the

respondent No.3 Bank have been heard.

4. The suit from which this appeal arises was filed pleading, (i) that Sh.

Prithvi Nath Kaul (P.N. Kaul), husband of the deceased appellant was the

holder of certain bank accounts and fixed deposit receipts (FDRs) with the

respondent No.3 Bank; (ii) that the deceased appellant and her husband had

three children namely two sons Mr. Heera Kaul and Mr. Ravi Mohan Kaul

and one daughter i.e. respondent No.1 herein; (iii) that the respondent No.2

Dr. Jawahar Lal Kaul Muthoo is the husband of the respondent No.1; (iv)

that the relations of the deceased appellant and her husband with the

daughter and son-in-law i.e. respondents No.1 & 2 were strained and even

police complaints had been filed by the husband of the deceased appellant

against the daughter and son-in-law; (v) that when the husband of the

deceased appellant was ill and was in delirious state, the respondents No.1

& 2 illegally and fraudulently took him to the respondent No.3 Bank and the

respondent No.3 Bank in collusion with the respondents No.1 & 2 inspite of

such state of health of the husband of the deceased appellant converted as

many as 35 FDRs earlier in the sole name of the husband of the deceased

appellant to in the joint name of the husband of the deceased appellant and

the respondent No.1. The suit was thus filed, (a) for declaration that all the

said FDRs with the respondent No.3 Bank in the joint names of the husband

of the deceased appellant and the respondent No.1 were individual deposits

of the husband of the deceased appellant and the name of the respondent

No.1 as joint holder thereof had been added fraudulently; and (b) for

permanent injunction to restrain the respondents No.1 & 2 from

withdrawing monies subject matter of the said FDRs and to restrain the

respondent No.3 Bank from permitting such withdrawal.

5. Though Mr. Ravi Mohan Kaul appearing in person and the counsel

for the respondent No.3 Bank state that there was no interim order in the suit

but a perusal of the suit records shows that on 3rd October, 1997 while

issuing summons of the suit, the respondent No.3 Bank was restrained from

encashing any FDR taken by late Sh. P.N. Kaul out of his Savings Bank

Account No.12927. The record further reveals that the said interim order

was continued from time to time; though there is no order disposing of the

application for interim relief but it can safely be assumed that the said

interim order continued during the pendency of the suit.

6. Written statements were filed by the respondents No.1 & 2 as well as

by the respondent No.3 Bank contesting the suit. Need is however not felt

to discuss the contents thereof and suffice it to state that there is no plea of

the respondents No.1 & 2 in their written statement, of the monies of the

said FDRs belonging to respondent No.1; she has rather admitted that the

said monies belonged to her father Sh. P.N. Kaul and has pleaded that the

father had willingly and of his own volition made her the joint name holder

in the said FDRs.

7. The deceased appellant appeared as the sole witness in support of her

suit. The respondents No.1 & 2 also examined themselves as witnesses in

support of their defence. It is informed that a witness was examined by the

respondent No.3 Bank also.

8. On the pleadings of the parties, the following issues were framed in

the suit:

"(i) Whether the defendant Nos.1 and 2 under coercion and duress got all the fixed deposit accounts of late Sh. P.N. Kaul converted into joint accounts with defendant no.1? OPP.

(ii) Whether the said conversion of fixed deposit accounts of late Sh. P.N. Kaul, as aforesaid, is null and void? OPP

(iii) Whether the plaintiff is entitled to the declaration and injunction sought? OPP

(iv) Relief."

9. The learned ADJ has vide the impugned judgment dismissed the suit

of the deceased appellant finding/observing/holding:

(i) that though the deceased appellant had set up a case of strained

relationship with the respondent No.1 but in her cross-examination

admitted to sharing a close mother-daughter relationship with the

respondent No.1 and further admitted to writing letters to the

respondent No.1 almost every week;

(ii) that several letters of the deceased appellant proved as Ex. D-1

to D-16 did not show any stained relationship; rather the deceased

appellant had therein sent her blessings and love for the family of the

respondents No.1 & 2 and had also extended all help to the family of

the respondents No.1 & 2;

(iii) that the said letters disproved the claim set up in the suit of

strained relations and the said claim appeared to be an afterthought;

(iv) that though the deceased appellant had set up a case of the

respondents No.1 & 2 having sent their daughter to the residence of

the appellant and her husband by exerting emotional pressure but in

her cross-examination admitted that the daughter of the respondents

No.1 & 2 was staying with them with their consent;

(v) that of the two sons of the deceased appellant and her husband

Sh. P.N. Kaul, the elder one Mr. Heera Kaul had settled in America

since 1973 and the younger son Mr. Ravi Mohan Kaul has been

residing separately in Alaknanda since 1984;

(vi) that since the deceased appellant and her husband were living

alone, that appeared to be the reason that they wanted to have the

daughter of the respondents No.1 & 2 stay with them;

(vii) that the deceased appellant in her cross-examination admitted

that her husband Sh. P.N. Kaul was in a sound state of mind;

(viii) that the witness of the respondent No.3 Bank had produced

documents to prove that the FDRs were converted from the single

name of Sh. P.N. Kaul to the joint names of Sh. P.N. Kaul and the

respondent No.1 as per the mandate and will of Sh. P.N. Kaul by P.N.

Kaul writing a letter dated 30th May, 1997 in his own handwriting to

the Manager of the respondent No.3 Bank in this regard;

(ix) that the case of the deceased appellant that her deceased

husband Sh. P.N. Kaul was taken to the respondent No.3 Bank under

intoxication could not be believed as Sh. P.N. Kaul was claimed to

have been so taken to three other banks also and no action had been

taken with respect to the bank accounts in those banks;

(x) that the allegation of collusion between the respondents No.1 &

2 on the one hand and the respondent No.3 on the other hand had not

been established;

(xi) that Sh. P.N. Kaul had retired as a Government official of a

high rank and was well to do and it could not be believed that he had

been duped as was being alleged;

(xii) that the fact that the husband of the deceased appellant i.e. Sh.

P.N. Kaul had given a flat at Rajouri Garden, New Delhi to the

respondents No.1 & 2 also showed the affection he had for them;

(xiii) that the action of Sh. P.N. Kaul who was aging, of securing his

accounts by making them joint with his daughter i.e. respondent No.1,

was understandable and in normal course of human conduct.

The learned ADJ accordingly held that Sh. P.N. Kaul had not

converted the FDRs from his sole name to joint name with the

respondent No.1 under any coercion or duress and accordingly all the

issues were decided against the deceased appellant and the suit

dismissed.

10. Mr. Ravi Mohan Kaul arguing in person has contended that the

respondent No.3 Bank made payment of the FDR amounts to the respondent

No.1 on 29th April, 2010 i.e. after the notice of the appeal was issued on 26th

April, 2010. He also invites attention to CM No.4989/2010 for stay filed

with the appeal to contend that it is not as if the deceased appellant had not

applied for stay along with the appeal.

11. The fact however remains that only the notice of the said application

for stay was issued while issuing notice of the appeal on 26 th April, 2010

and no interim stay was granted by this Court. The only stay in operation as

aforesaid is vide the order dated 6th July, 2010 restraining the respondents

No.1 & 2 from appropriating the sum of Rs.30.68 lakhs released to them by

the respondent No.3 Bank.

12. Mr. Ravi Mohan Kaul has further informed that his father Sh. P.N.

Kaul has also left a registered Will bequeathing his entire estate to the

deceased appellant and to his two sons namely Mr. Heera Kaul and Mr.

Ravi Mohan Kaul; he further informs that the bequeath to the deceased

appellant was of a life estate only. On enquiry, whether the deceased

appellant has also left any Will, he states that he is not aware of the same

though has heard that there is a Will.

13. Mr. Ravi Mohan Kaul further informs that probate of the Will of Sh.

P.N. Kaul has been applied for and is pending in the District Courts at

Dwarka, Delhi. On enquiry, whether the respondent No.1 has filed any

objections in the said probate proceedings, he states that though the

respondent No.1 had filed objections in the probate proceedings but has not

been appearing in that proceeding also now. The probate proceedings are

stated to be however still pending.

14. The position which thus emerges is that, (A) there is no dispute that

the money which the respondent No.1 has withdrawn from the respondent

No.3 Bank belonged to the deceased Sh. P.N. Kaul; and, (B) the respondents

No.1 & 2 did not lay any claim to the said money as their own.

15. The suit was filed and pursued and thereafter this appeal has been

filed and pursued, without addressing the question of the entitlement to

monies in such joint accounts / joint deposits--whether the said monies,

upon the demise of the person to whom they belong devolve upon the joint

name holder or upon the heirs of the deceased to whom they belonged. That,

according to me was the real question for adjudication and to which neither

the appellant / plaintiff nor the respondents / defendants invited the attention

of the Court and which has thus remained un-adjudicated.

16. I find, the Supreme Court in Indranarayan Vs. Roop Narayan 1971

(2) SCC 438 faced with such a situation to have held, that from the conduct

of the sole account / deposit holder, of joining the name of another in the

said account, there can be no presumption of advancement i.e. of the sole

account / deposit holder intending to gift the monies in his account / deposit

to the person whose name is so joined and that it is for the person whose

name is so joined in the account / deposit to establish by satisfactory

evidence that the sole holder of the account / deposit by adding / joining his

name to the same intended that the amounts in question, after his death

should go to him exclusively; that only if it is so proved can the joint name

holder claim the said monies as his own and else there is a resulting trust for

disbursement of the said amount to the heirs in accordance with law of the

owner of the said monies or who was earlier the sole account / deposit

holder.

17. A detailed discussion in this regard is also to be found in the

judgment of the Bombay High Court in Krushanadas Nagindas Bhate Vs.

Bhagwandas Ranchhoddas AIR 1976 Bombay 153; though the earlier

judgment of the Supreme Court in Indranarayan supra was not noticed but

the law was held to be well settled that in respect of a joint account opened

in the bank, on the death of one there is a resulting trust in favour of his

heirs and legal representatives, unless there are special facts and

circumstances to show a contrary intention. Reliance in this regard was

placed on the judgments of the Privy Council in Guran Ditta Vs. Ram Ditta

AIR 1928 Privy Council 172 and Shambhu Nath Vs. Pushkar Nath AIR

1945 Privy Council 10 holding that even where money is kept in a bank

account in joint name on the terms that it was payable to either or survivor,

the same does not amount to a gift and there is no presumption of an

intended advancement. The said rule was held to be not confined to assets

in the joint names of a man and his wife but to be of universal application,

whatever the property and whatever the relationship; only if the joint

account holder establishes a contrary intention, does he keep the assets

standing in the joint names of the deceased and himself and if not, the assets

must be included in the partible property. The Bombay High Court further

held that it will ordinarily depend upon the facts and circumstances of the

case relating to the opening of the account showing the intention of the

parties and if from the facts and circumstances, it can be held that the

intention was to make the survivor the owner of the amount lying in the

account then he and not the heirs would be entitled to recover the amount; if

the facts and circumstances do not establish any such intention, although the

holder of the joint account may be authorized to withdraw the amount, he

would be bound to restore that amount to the heirs / legal representatives of

the deceased joint holder. It was yet further held that though the bank may

be discharged by payment to the survivor but the survivor would be

accountable to the heirs of the joint account holder.

18. Justice P. Sathasivam speaking for the Madras High Court in

Khushaldas Vs. Mohanarangam MANU/TN/0100/1996, relying on

Indranarayan supra and in the absence of satisfactory proof with regard to

the intention on the part of the deceased to give the amount of the fixed

deposits exclusively to the joint account holder, held the joint account

holder to be not entitled thereto.

19. The High Court of Himachal Pradesh also in Amar Kaur Vs. Shri

Ram Singh MANU/HP/0506/2009 held that deposit made by a person of

his money in the joint name of himself or any other person on the terms that

it is payable to either or survivor does not on his death constitute a gift by

him to the other person; in such a case, without any declaration of trust,

there is a resulting trust in favour of the depositor in the absence of any

contrary intention or unless it can be proved that an actual gift of the amount

was intended. It was again held that the burden of proving a contrary

intention or gift is on the person who seeks to rebut the resulting trust in

favour of the person who makes the deposit and this burden can be

discharged either by proving that there was a specific gift or that the owner

of the money had a general intention to benefit the claimant and that it was

in pursuance to that intention that he made the deposit in the claimants name

or transferred the deposit to the joint names of himself and the claimant; in

the absence of such proof, the amount under the deposit on his death will

form part of the owners estate and will be partible amongst his heirs.

20. To the same effect is the judgment of the Division Bench of the

Orissa High Court in Kinkar Santananda Sanyasi Vs. State Bank of India

AIR 2002 Orissa 114 laying down that merely because the deposit was

made in the joint name with the monies thereunder being payable to either

or survivor did not raise any presumption that the amount would be released

in favour of the depositor only and the natural heirs cannot be deprived of

benefits accrued from the deposit.

21. Paget's Law of Banking (12th Edition) also in Chapter-II titled 'Types

of Account' and under 'Joint Accounts' has cited the judgment of the High

Court of Australia in Russell & Scott (1936) 55 CLR 440 holding to the

same effect.

22. Notice at this stage may however be taken of State of Maharashtra

Vs. Pollonji Darabshaw Daruwalla 1987 Supp (1) SCC 379, a case under

the Prevention of Corruption Act, 1947, holding the assessment made by the

High Court in that case that in all joint deposits, the depositor first named

alone is the beneficial owner and the depositor named second has no such

beneficial interest, to be erroneous. It was held that the matter is principally

guided by the terms of the agreement inter se between joint depositors. It

was however further held that if the terms of acceptance of the deposit

stipulate that the name of the beneficial owner alone shall be entered first,

then the presumptive beneficial interest in favour of the first depositor might

be assumed. The same is the view of this Court in Jastinder Singh Vs. State

MANU/DE/0244/2000, also under the Prevention of Corruption Act, 1988.

23. I find the CIT(A), in judgment of the ITAT, Kolkata titled Arijit

Ghosh Vs. Assistant Commissioner of Income Tax reported as

MANU/IK/0281/2011 to have held that as per the banking norms, the first

holder is the real owner of the account for all practical purposes with all

correspondences, monthly statements etc. being sent at the address of the

first holder and the position to be the same under the Income Tax also in the

absence of proof otherwise, and the ITAT to have not disturbed the said

finding. I have been unable to find any view, neither in any judgment nor in

Tannan's Banking Law and Practice in India, 21st Edition or in Paget's Law

of Banking, 12th Edition to the contrary. The position thus appears to be

that in the absence of any instruction to contrary, as far as the Banks are

concerned, the first name holder is treated as beneficial owner of monies

deposited in joint names.

24. In the present case as aforesaid, it is the admitted position that the

monies in the FDRs belonged to the deceased Sh. P.N. Kaul and the

respondent No.1 whose name was added in the said FDRs had not taken any

plea of advancement or gift of the said monies in her favour. The monies

subject matter of the FDRs thus have to be held to be belonging to the estate

of the deceased Sh. P.N. Kaul with the appellant Ravi Mohan Kaul and

respondent No.4 Heera Kaul being entitled thereto if prove the Will of Sh.

P.N. Kaul in their favour and with the respondent No.1 Mrs. Chandra Kaul

Muthoo also having share therein, if the said Will is not proved.

25. Mr. Ravi Mohan Kaul states that after the Will of Sh. P.N. Kaul is

probated, he will file a suit for recovery of the monies from the respondents

No.1 & 2.

26. I am also of the view that till the appellants Mr. Ravi Mohan Kaul

and his brother Mr. Heera Kaul are held entitled to the estate of Sh. P.N.

Kaul to the exclusion of respondent No.1, they have no right to recover the

said monies from respondent No.1 they can only seek partition thereof on

the premise of Sh. P.N. Kaul having died intestate.

27. In view of the aforesaid, no error is found in the action of the

respondent No.3 Bank of releasing the monies in favour of respondent No.1

who was admittedly the joint name holder.

28. In the aforesaid circumstances, it is felt that no purpose would be

served in the appellant proceeding with this appeal from the judgment and

decree in the suit the only relief claimed wherein was of declaration and

injunction. The relief, insofar as of injunction is concerned, has become

infructuous. Though Mr. Ravi Mohan Kaul contends that the respondent

No.3 Bank notwithstanding the notice of the pendency of the appeal,

released the monies to the respondents No.1 & 2, but the fact remains that

till 29th April, 2010 when the monies were so released by the respondent

No.3 Bank to the respondent No.1, the respondent No.3 Bank had neither

been served with the notice of the appeal nor was there any stay against it.

The decision on the question, whether the name of the respondent No.1 as

the joint name holder in the said FDRs was added with the volition of Sh.

P.N. Kaul or owing to the fraudulent actions of the respondents thus loses

any significance.

29. As far as the interim order in force in this appeal, restraining

respondents No.1 & 2 from appropriating the monies withdrawn from

respondent No.3 Bank is concerned, I may notice that Section 302 of the

Indian Succession Act, 1925 authorises the Probate Court to also issue

interim directions. The appropriate remedy for the appellants, till the

probate petition is not decided, is to move the Probate Court under the said

section and which if so moved, shall decide the said application in

accordance with its own merits. All that can be done is to extend the

interim order in this appeal restraining the respondents No.1 & 2 from

appropriating the sum of Rs.30.68 lakhs withdrawn by them for a period of

three months from today, to enable the appellants to in the meanwhile

approach the Probate Court for extension of the said order.

30. The appeal is disposed of with the aforesaid observations. The

interim order in force in this appeal is extended for three months from today

whereafter, unless extended by the Probate Court on application by the

appellants, the same shall lapse. No order as to costs.

Decree sheet be drawn up.

RAJIV SAHAI ENDLAW, J.

AUGUST 06, 2013 bs/gsr..