Gujarat High Court
Prakash Babulal Sheth vs Shashikalal Mayur Sheth on 9 December, 2022
Bench: Hemant M. Prachchhak
C/FA/1076/2019 JUDGMENT DATED: 09/12/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1076 of 2019
With
CIVIL APPLICATION (FOR BREACH OF ORDER) NO. 1 of 2021
In R/FIRST APPEAL NO. 1076 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE SONIA GOKANI
and
HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK
==========================================================
1 Whether Reporters of Local Papers may be allowed YES
to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
==========================================================
PRAKASH BABULAL SHETH
Versus
SHASHIKALAL MAYUR SHETH
==========================================================
Appearance:
MR JIGAR RAVAL ASSISTED BY VASIM MANSURI(8824) for the
Appellant(s) No. 1,2,3
for the Defendant(s) No. 2
DS AFF.NOT FILED (R) for the Defendant(s) No. 2.1,2.3
LD.SR.ADV.MR.MIHIR JOSHI ASSISTED BY MR SALIL M THAKORE(5821)
for the Defendant(s) No. 1
VAIBHAV V GOSWAMY(9019) for the Defendant(s) No. 2.2,2.4
==========================================================
CORAM:HONOURABLE MS. JUSTICE SONIA GOKANI
and
HONOURABLE MR. JUSTICE HEMANT M.
PRACHCHHAK
Date : 09/12/2022
ORAL JUDGMENT
(PER : HONOURABLE MS. JUSTICE SONIA GOKANI)
C/FA/1076/2019 JUDGMENT DATED: 09/12/2022
1.This appeal arises from the judgment and
decree passed by the trial Court in Regular
Civil Suit No.2245 of 1998, which resulted
in form of the original plaintiff and
original defendant.
Factual Matrix:
2. Brief facts in capsulized form are as
follow:
2.1 The appellants Nos.1 to 3 are the
original defendants and the respondent No.1
is the original plaintiff. Respondent
Nos.2/1 and 2/4 are the heirs of the
deceased defendant No.4 and they are joined
after the demise of the original defendant
No.4, who is the father of the appellant.
Appellants and respondents shall be
referred to as the defendant and plaintiff
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respectively for the sake of convenience
hereinafter.
2.3 It is the case of the plaintiff that
the suit property was purchased in the year
1990 in her name through power of attorney-
the defendant No.1. Because of the good
family relations, the plaintiff with the
consultation of her husband Mr.Mayur Sheth
(since deceased) permitted all the
defendants including her father-in-law to
reside in the said house as defendants did
not have personal property to reside. As
and when the plaintiffs visited India, they
also resided in the same house.
2.4 In the year 1996, when they visited
India on 02.12.1996 to attend the marriage
of Manushi, the daughter of defendant No.1
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which was held on 05.12.1996, some news
were received by them regarding the alleged
transaction that might be entered by the
defendant No.1 regarding the suit property
on the basis of the power of attorney which
was given to the defendant No.1. Therefore,
on 08.12.1996 a letter was issued to the
defendant No.1 and sent through the simple
post cancellilng the power of attoreney.
The plaintiff with her husband had left
India on 11.12.1996. On 12.12.1996 and
23.12.1996 they had issued the Registered
A.D. Notice to the defendant No.1 through
learned advocate and along with that also,
the very letter issued on 08.12.1996
regarding cancellation of power of attorney
was sent.
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2.5 Thereafter, on 09.12.1996, the
defendant No.1 is alleged to have
fraudulently executed two registered sale
deeds of suit property in favour of
defendant Nos.2 and 3, his wife and son. It
is also alleged that the plaintiff had not
received any consideration shown in the
sale deed. It is alleged that both the sale
deeds are fraudulently made, without the
consent of the plaintiff and therefore, two
suits for cancellation of sale deed and to
get back the possession from the defendant
No.1 were preferred.
2.6 In the written statement, the
defendant No.1 had taken a clear stand that
as per the family settlement between
defendant No.4 as the father and karta of
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the family with both his sons i.e.
defendant No.1 and husband of the
plaintiff, transaction regarding the sale
deed in favour of defendant Nos.2 and 3 had
taken place. The defendants also narrated
the entire background of the family in
detail and pointed out that there were many
family businesses in which the husband of
the plaintiff was actively involved.
Because of the financial crunch and the
litigation regarding the family business,
the family decided to send the husband of
the plaintiff Mr.Mayur Sheth to United
States of America so that one member can
earn handsomely and thereafter can help the
family. Even the adoption of Mr.Mayur Sheth
by his paternal uncle Mr.Jayantibhai was
also a part of the family settlement and it
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is clear that the plaintiff and her husband
resided in a joint family property
throughout.
Issues:
3. The trial Court on the strength of
pleadings framed the issues and evidence
came to be recorded. The following issues
were framed and the trial Court answered
them as follow:
(1) whether the plaintiff proves that he is owner of the suit
property?
(2) whether the plaintiff proves that the sale made by the
defendant No.1 in favor of defendant No.2 and 3 dated 9-12-
96 is illegal and without any authority?
(3) Whether the plaintiff is entitled for possession of the suit
premises from defendant No.2 and 3?
(4) Whether the plaintiff proves that in alternative, he is
entitled to recover Rs.60 Lacs from the defendant No.1 along
with 20% interest from the date of suit?
(5) Whether the defendant proves that the power of attorney
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in favour of defendant NO.1 was irrevocable and defendant
was authorized to sell the property?
(6) whether the plaintiff is entitled for the relief's claimed?
(7) What order and decree?
8. My findings to the above issues is as follows:
Issue No.1: Affirmative
Issue No.2: Affirmative
Issue No.3: Affirmative
Issue No.4: Negative
Issue No.5: Negative
Issue No.6: Affirmative
Issue No.7: As per the final order."
Evidence: Oral and Documentary:
4. The oral and documentary evidences of
the plaintiff and defendants are required
to be noted as follow:
Plaintiff's Oral Evidences:
Sr.No. Particulars Exhibit Nos.
Mayur Jayantilal Sheth
S.Rangwala
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Plaintiff's Documentary Evidences:-
Sr. No. Particulars Exhibit Nos.
Inward Remittance issued by
Andra Bank
Foreign Exchange Regulation Act
issued by Reserve Bank
property
No.4474 given by Sub-registrar,
Ahmedabad
No.4474 given by Sub-registrar,
Ahmedabad
Advocate of the defendant
Defendant's Oral Evidences:
Sr.No. Particular Exhibit Nos.
passport
3 Income Tax returned jointly filed 115 to 118
by the plaintiff and her husband
in USA
Prathhas
for 1 lakh Pounds
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Defendant's Documentary Evidences:-
Sr.No. Particular Exhibit Nos.
Property
Municipal Corporation
Municipal Corporation
Municipal Corporation
Municipal Corporation
Municipal Corporation
Municipal Corporation
Municipal Corporation
Municipal Corporation
Municipal Corporation
Municipal Corporation
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Municipal Corporation
Municipal Corporation
Municipal Corporation
Corporation
Office
5. The Court after noticing that all
issues are interconnected, to avoid
repetition of the reason has discussed all
of them together and eventually answered
each one of them and allowed the suit of
the plaintiff and decreed the same. It was
declared that the defendant No.1 had no
authority under the power of attorney dated
19.01.1983 to sell the suit property to
defendant Nos.2 and 3 as has been done by
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him with a further declaration that the
plaintiff being the true and lawful owner
of the suit property, continued to be the
owner despite of the sale deed executed by
the defendant No.1 in favour of defendant
Nos.2 and 3. It is further declared that
the sale effected by the defendant No.1 in
favour of the defendant No.2 for half of
the portion of suit property by registered
conveyance deed dated 09.12.1996 is
illegal, unauthorized and without any
have been directed to handover the vacant
and peaceful possession of the suit
property to the plaintiff within a period
of three months. The further transfer of
the property in any mode of manner has been
also particularly prohibited. This has
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aggrieved the defendants, who are before
this Court by way of this present first
appeal.
6. We have heard the learned advocates,
Mr.Jigar Raval with Mr.Vasim Mansuri for
the appellant and learned senior advocate,
Mr.Mihir Joshi with learned advocate,
Mr.Salil Thakore for the defendant No.1 and
learned advocate, Mr.Vaibhav Goswami
represented the defendant Nos.2.2 to 2.4.
They have also given their written
submissions and substantiated their version
with case laws decided by the Court. There
may not be requirement of reproduction of
the submissions, it would suffice to note
down the authorities submitted by both the
sides.
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6.1 On behalf of the defendants, reliance
is placed on the following decisions:
(1) State of Rajasthan and others vs.
Basant Nahata, reported in (2005) 12 SCC
(2) Krishna Mohan Kul alias Nani Charankul
and another vs. Pratima Maity and others,
reported in (2004) 9 SCC 468
(3) Sri U.Vijaya Kumar and another vs.
Smt.Malini V. Rao, reported in ILR 2016
KAR 2670
(4) Mathra Das-Jagan Nath vs. Jiwan Mal-
Gian Chand, reported in ILR 1927 Lahore 7
(5) Nabi Khan (since deceased) through Lrs
and others vs. Roojdar and others, reported
in (2010) SCC Online Raj 604
(6) Central Board of Secondary Education
and another vs. Aditya Bandopadhyay and
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others, reported in (2011) 8 SCC 497
(7) Iswar Bhai C. Patel alias Bachubhai
Patel vs. Harihar Behera and another,
reported in (1999) 3 SCC 457
(8)Iqbal Basith and others vs.
N.Subbalakshmi and others, reported in
(2021) 2 SCC 718
(9) Ashwinkumar K. Patel vs. Upendra J.
Patel and others, reported in AIR (1999)
SC 1125
(10) Municipal Corporation, Hyderabad vs.
Sunder Singh, reported in (2008) 8 SCC 485
(11) The Commissioner of Wealth Tax,
Mysore vs. Her Highness Vijayaba, Dowger
Maharani Saheb of Bhavnagar Palce,
Bhavnagar and others, reported in (1979) 2
SCC 213.
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7. On the strength of the submissions as
well as the evidence oral as well as
documentary which have come on the record,
the issues which had been framed by the
Court will need to be regarded.
Issue No.1: Ownership.
7.1 Issue No.1 is as to whether the
plaintiff is the owner of the suit property
is concerned, which is answered in
affirmation by the trial Court.
7.2 The property is situated at Sub-plot
No.2-A of Final Plot No.795 of Ellisbridge,
sq.yard i.e. 481 square meters of area on
which the bungalow is constructed which
shall be referred to as the suit property.
7.3 It appears that the defendant No.1 is a
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son of defendant No.4 Babulal Laxmichand
Sheth and defendant No.2 is the son of
defendant No.1 and defendant No.3 is the
wife of defendant No.1. Plaintiff is the
wife of the brother of the defendant No.1.
Mr.Mayur Sheth and thus, husband of the
plaintiff and defendant No.1 are the real
brothers and Mr.Babulal Laxmichand Sheth is
the father-in-law of plaintiff. The
plaintiff and her husband are residing
abroad. It is the say of the family that
they went abroad so that they can earn for
the family and the family can prosper.
According to the plaintiff, as she and her
husband are residing abroad, there was a
need for giving power of attorney to
defendant No.1 for managing the bungalow as
he is the sibling of her husband and the
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same was given on 19.01.1983 to manage the
property. The power of attorney had been
executed on 05.01.1983 before the notary
public Mr.B.F.Ujjaini where powers were
given by the husband of the plaintiff to
the defendant No.1. It is a matter of
record and not being disputed that the suit
property was purchased by the plaintiff
from Mrs.Saralaben Hasmukhbhai Shah,
Mr.Sunil Hasmukhbhai Shah, Miss Sonia
Hasmukhbhai Shah and Miss Bela Hasmukhbhai
Shah by a deed of conveyance on 08.02.1990
for a total consideration of
Rs.16,50,000/-.
7.4 Defendant No.1 as the constituted
attorney of the plaintiff had also got the
names of the plaintiff and her husband
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mutated in the Government Record. It
appears that another original supplementary
agreement of sale Exhibit 194 which was
executed by those very owners in favour of
the plaintiff on 14.12.1989 with regard to
the suit property and the period of
agreement dated 13.09.1989 had been
extended upto 31.01.1990 as the vendors
were not in a position to handover the suit
property to the purchaser. The plaintiff
had produced the registration fees receipt
No.557015 and thus, it is clear that the
property had been purchased by the
plaintiff in the year 1989.
7.5 From the Tax Receipt, Municipal
Corporation Tax Bills and various other
documentary evidences from the Government
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and Municipal Corporation would reveal that
suit property was purchased by the
plaintiff and her husband and defendant
Nos.1, 2 and 3, who are residing in the
suit property and plaintiff and her husband
since were residing in USA, whenever they
visited India, they would also reside with
the family as the relationships were very
cordial.
7.6 The Court on the strength of the
registration receipt issued by the Sub-
Registrar vide Exhibit 211 and all other
documents including the Index Copy of
Registration issued by the Sub-Registrar
vide Exhibit 212 has rightly and
unequivocally held that the suit property
is owned by the plaintiff and her husband.
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7.7 The plaintiff has brought on the
record the income tax return of various
years jointly filed by the plaintiff and
her husband in USA vide Exhibit 115 to 118.
It appears that these returns are
indicative of their income in USA which
they are handsomely earned in USA. The
certified copy of the letter issued by
Charles J.Prathhas Principal Hellam Version
and Company has reflected the income
through loan of plaintiff and her husband.
Certified copy of the letter issued by
Mr.Shailesh Shah stated that he had wired
1,00,000 Pounds on 30.01.1990 to the
plaintiff and her husband at Commerce Bank
of Washington in USA vide Exhibit 103.
7.8 The plaintiff has brought on the
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record the certificate of foreign inward
remittance issued by the Andra Bank
(Exhibit 107). The remittance of the
foreign currency in US $6000/- through DD
No.11019 on 29.08.1989 from the Bank of
India to San Francisco USA is also on
record. The permission issued by the
Reserve Bank of India under Section 31(1)
of the Foreign Exchange Regulation Act,
1973 ('the FERA' Act hereinafter) to
acquire immovable property in India dated
28.12.1989 also is indicative of the fact
that the purchase of the suit property is
made in December 1989 through the Foreign
Currency. The valuation report in respect
of the suit property as approved by the
Government Registered valuer is also on
record vide Exhibit 131. Mr.Paras Rangwala
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also has deposed vide Exhibit 124 that the
suit property was constructed in the year
1983-1984 and in the year 1996, the total
value of the suit property was around
Rs.60,26,000/-. It is in a posh locality of
Ahmedabad and the value of the same was
Rs.60,26,000/- in the year 1996.
7.9 As a US citizen, the plaintiff needed
to seek permission of Reserve Bank of India
under Section 31 of the FERA Act which has
come on record. Even the permission for
selling the property under Section 31(1) of
the FERA Act was necessary as the person
who is not the Indian citizen, even for
transfer of such property the Reserve Bank
permission is necessary. However, that
aspect would be dilated while coming other
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issues.
7.10 It is thus more than clear and got
established that the plaintiff Shasikala
Mayur Sheth is the owner of the suit
property and hence, there is no requirement
for any interference so far as the issue
No.1 is concerned.
8. This brings this Court to the Issue
No.2, 3 and 4 with regard to the sale made
by the defendant No.1 of the property in
question in his capacity as power of
attorney to defendant Nos.2 and 3 his own
wife and son on 09.12.1986 and whether the
same is without the authority!! And whether
the defendant is entitled to the possession
of the property because of the family
understanding of the parties!!
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8.1 The major & principal grievance on the
part of the plaintiff is in respect of this
sale, which had been made by the defendant
No.1 in favour of defendant Nos.2 and 3. It
appears that in December 1996, when the
plaintiff and her husband visited India in
a normal course, they had stayed at the
property owned by them and which was
otherwise used by defendant No.1 and his
family. The plaintiff got suspicious about
the activity of the defendant No.1 and
therefore, communication was sent to the
defendant No.1 to cancel the power of
attorney dated 08.12.1996 through
M/s.C.C.Gandhi and Company and thus, the
original power of attorney was cancelled by
the plaintiff as per his say.
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8.2 After the receipt of the letter, the
defendant No.1 on 09.12.1996 executed two
sale deeds in favour of defendant Nos.2 and
3 his son and the wife for their own
benefit. It appears that the plaintiff and
her husband were in India from 02.12.1996
to 11.12.1996. The passports of plaintiff
and her husband Exhibit 113 and 114 are on
record. Visa stamp by the US Government and
the Indian Government are indicative of the
fact that they were in India from
02.12.1996 to 11.12.1996.
8.3 The Court must also take a note of the
fact that in the written statement itself
the defendant had taken a stand of oral
understanding where the plaintiff's husband
had agreed to provide for a house, purchase
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price of the same was Rs.16.50 Lakh and
additional money of Rs.50 Lakh to defendant
No.1.
8.4 A heavy reliance is placed on the
written statement and the letter of
defendant No.4 Mr.Babulal Sheth the father
of defendant No.1 and plaintiff's father-
in-law. Defendant No.4' written statement
is similar to the written statement of
defendant No.1. So far as the letter dated
02.03.1998 of defendant No.4 is concerned,
is not an exhibited document. Moreover, the
letter is not referred to in defendant
No.4's written statement nor was it
produced by the defendant No.4 in the suit.
However, in a list dated 07.01.2010/
11.02.2010 after about 11 years of filing
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of the suit, the same had been produced.
The defendant No.4 has not stepped into the
witness box.
8.5 From the year 2005 onwards, as per the
cross examination of defendant No.1, he was
living separately in a flat at Paldi. He
lived with defendant No.4 from 1999 to 2005
then he lived in a flat opposite Dharnidhar
Derasar. He passed away in the year 2019
and thus he lived separately from defendant
No.1 for the last about 15 years.
8.6 Worthwhile also would be to consider
the contention of the defendant No.1 that
cancelled power of attorney letter dated
08.12.1996 is not exhibited and therefore,
cannot be looked into by the Court, this
includes the plaintiff's letter dated
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23.12.1996 (Exhibit 144). It is not in
dispute that the plaintiff's letter which
canceles the power of attorney is already
exhibited and the cancelled power of
attorney can be looked into in plaintiff's
cross examination, the same is put to the
plaintiff by defendant No.1 and thus, the
same has been referred to during the cross
examination and therefore also there will
be a need to look into the same.
8.7 It is thus not about the Court having
relied upon the letter dated 08.12.1996 in
respect of the legality of sell, however,
while discussing all the issues
simultaneously it has taken note of basic
principle of agency and fiduciary
relationship which necessiates that the
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power of attorney given in a trust requires
to be used for benefit of the principal and
not for the benefit of oneself or the
relative. The cencellation of power of
attorney is one of the grounds noted by the
Court. However, it has also simultaneously
taken note of the dubious nature of the
transaction in favour of the wife and son
of defendant No.1 without the consent of
the principal as also the absence of any
consideration not to talk about the
valuation as per the report of the
Government Approved Valuer.
8.8 Noticing the fact that the operation
of Bank Account by the power of attorney
himself and the transactions shrouded with
suspicion and ambiguities. Let the Court to
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refer to the fact that the plaintiff was in
India when the sale deed was executed in
favour of close relative of defendant No.1
his wife and his son.
8.9 In the opinion of this Court, the sale
deed has been set aside on various grounds
and not only on the ground of cancellation
of power of attorney. Even otherwise, Order
XLI Rule 27 of the Code of Civil Procedure
permits the Court to confirm the decree on
the grounds other than those on which the
Civil Court has passed the decree. The
Appellate Court has in various decisions
emphasised that the remand should be the
last resort as that has a tendency of
causing undesirable delay and prejudice to
the party.
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8.10 So far as the cancellation of power
of attorney is concerned, it is the defence
of the defendant that the learned judge has
set aside the sale deeds only on the ground
of cancellation of power of attorney by a
letter dated 08.12.1996 and it is
undisputedly made clear that only the
grounds appealed is the letter dated
08.12.1996 regarding the cancellation of
power of attorney by the plaintiff before
execution of the sale deed on 09.12.1996.
8.11 It is also the defence put-forth
that the communication dated 08.12.1996 is
not exhibited and not proved. According to
the defendants, at the time of filing the
written statement, 15 documents had been
produced vide Exhibit 41. Four documents in
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original form were produced along with
examination in chief (Exhibit 142) with
postal receipts (Exhibit 141). The request
is made to the trial Court to exhibit those
documents. This contained the communication
by the original defendant No.2 to the
plaintiff and her husband on 11.01.1997, a
letter dated 18.02.1997 and the third
letter by the father-defendant No.4 to the
plaintiff and her husband on 02.03.1998
(list Exhibit 41/1,41/3 and 41/13). They
are original communications which were
identified by the defendant in the
examination in chief, which ought to have
been executed by the trial Court and taken
into consideration. However, when the same
has not been done,there is a need for
considering this request afresh and
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therefore, the remand of the matter shall
be necessary.
8.12 It is also the case of the
defendant No.1 that the father of the
plaintiff-husband defendant No.4 always
felt that it was his responsibility to
settle all the children in different
vocations and certain understanding and
settlement had been arrived at. It was
decided that the husband of the plaintiff
and his family were well settled in USA.
They should be separated from defendant
No.1 and defendant No.4 would stay with the
family of the defendant No.1 along with
their mother.
8.13 Thus, family settlement was made
orally as per the deposition vide Exhibit
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142 in order to work out the settlement,
house was required to be provided to the
defendant No.1 for his children and parents
and the amount of Rs.50 Lakh or equivalent
was to be paid by Mr.Mayur Sheth and for
that very purpose the power of attorney was
executed on 19.01.1983 and the purchase of
the property was as per the understanding
of the parties in the name of the plaintiff
as some tax benefit was to be derived from
USA and on account of some litigations
pending against the defendant No.4,
Mr.Mayur Sheth the brother of the defendant
No.1 and the husband of the plaintiff had
sent $ 1,00,000/- and the purchase of the
property was made in the name of the
plaintiff. This understanding was verbal
and hence, the same is not on record.
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9. According to the plaintiff, this is all
a story made out after once the defendant
No.1 has misused the power of attorney
given to him. The property was not
purchased in the name of the plaintiff's
husband Mr.Mayur Sheth, but instead it is
purchased in the name of the plaintiff.
There is no document indicating any pending
litigation against the defendant No.4. It
is also their say that the property was
purchased in the year 1989 for the
consideration of Rs.16.50 Lakh whereas the
remittance from the husband of the
plaintiff was of Rs.50 Lakh ($ 1,00,000/-),
the detail of remaining amount has not
forthcoming.
10. It appears from the deposition of
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Mr.Paras Rangwala, who has given the
valuation of suit property being a
Registered Government Valuer that he
visited the property on 25.03.2009 and
value he has assessed in the year 2009 is
Rs.60 Lakh.
11. It is necessary to make a mention here
that the defendant No.4 Mr.Babulal
Laxmichand Sheth, the father of Mr.Mayur
Sheth and defendant No.1 was quite annoyed
with the conduct of his son Mayur and his
wife Shasikala Mayur Shah the plaintiff. He
therefore, filed an application to be
impleaded as a party respondent, which was
allowed by the Court and the same was
challenged in the Revision before the
Gujarat High Court which had failed.
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11.1 He then filed his written statement
at Exhibit 36 stating therein that Mr.Mayur
Sheth was a partner in all the firms run by
joint family and hence, he visited India
for more than 18 times. In the year 1996,
mother of Mr.Mayur Sheth and Mr.Prakash
Sheth, the wife of the defendant No.4
passed away. Mr.Mayur Sheth had suggested
the the bungalow to be sold of without
disturbing the occupancy of the defendant
Nos.1 and 4 and the purchase price thereof
may be invested in a manner as would fetch
the return equivalent to the expenses as
there were overheads which were not
possible to be met with.
11.2 In September 1996, defendant No.3
suggested that he and his family members
should not be allowed to feel that they are
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a burden as the bungalow with the occupancy
had not been sold. The defendant No.4
continued his occupancy as of right, and
therefore, it was decided that the bungalow
should be purchased by one or more of the
family members for the suitable price.
After Mr.Mayur Sheth left for USA, the
issue was discussed many a times and phone
calls also were made and it was agreed that
Mr.Mayur Sheth and his wife Mrs.Shashikala
Sheth that the family members may purchase
the property at such price as may be quoted
or agreed by the defendant No.4 as a head
of the family and his decision would be
binding upon one and all. The defendant
No.1 since had a general power of attorney,
the transaction has been completed even
without the presence of the plaintiff and
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Mr.Mayur Sheth and when they were scheduled
to visit India in December 1996 to attend
the marriage of Manushi, the daughter of
defendant No.1, they attended the same on
05.12.1996, when everything was discussed
on telephone was refreshed and after the
marriage the papers were completed and in
favour of defendant Nos.2 and 3, this
registration had been done.
11.3 The plaintiff and Mr.Mayur Sheth
were in a hurry to leave India therefore,
they requested the defendant No.1 to
complete the transaction as was decided
under the guidance of defendant No.4. He
also left it to the discretion of the
defendant No.4 to decide the price and
hence, the conveyance was executed. Both
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defendant Nos.2 and 3 had paid Rs.10 Lakh
as a price of consideration. In the overall
interest of the family and as per the wish
of the defendant No.4, this amount was
decided to be the amount of consideration.
They also had expressed the wish to send
more amount from USA for the betterment of
the family. Thus, it was the say of the
defendant No.1 in his deposition that the
reason for use of the power of attorney and
the sale of property in question in favour
of his wife and son was in this background.
The copy of the sale deed Exhibits 225 and
226 have been produced on record.
11.4. The version puts forth creates a
serious doubt as held by the Court
concerned rightly this wise that if there
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was an oral understanding amongst the
family members, there was no requirement
for the sale deed to be executed by way of
a family settlement or a gift deed, the
transfer could have been easily made
possible. The Court cannot be oblivious of
the fact that the plaintiff had already
issued a notice to the defendant No.1 for
cancellation of power of attorney on
08.12.1996 declaring the power of attorney
as cancelled. He being an agent by virtue
of such power of attorney could not have
executed sale deed in favour of his own
wife and son by Registration Nos.4474 and
4475 dated 09.12.1996.
11.5 Again, the plaintiff and her
husband were in India and they resided with
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the defendant and therefore, there was no
earthly reason for them not to be the part
of this transaction. Again, the amount of
Rs.20 Lakh, which has been paid by way of
sale consideration by various cheques each
of Rs.2 Lakh also has a history for which
the Bank employee was needed to be
examined.
12. The defendant No.3 paid Rs.10 Lakh by
cheque No.206636, 206637, 206638, 206639
and 206640 on 09.12.1996, each of Rs.2
Lakh. The amount had been deposited in the
Bank on 10.12.1996 and on the very day the
same had been withdrawn. The defendants did
not produce the Bank Statement of theirs on
their own.
12.1 Apt would be to refer here to the
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deposition of the Bank employee and the
statement of account of Andhra Bank from
10.12.1996 to 05.08.2002 produced by the
plaintiff of the account No.S.B.NRO/1/1.
The account holder is plaintiff
Mrs.Shashikala Mayur Sheth and account is
operated by Mr.Prakash Babulal Sheth
defendant No.1 as a power of attorney
holder. Two times Rs.10 Lakh had been
credited in the account on 10.12.1996 by
way of transfer and the same was withdrawn
on the very day on 10.12.1996 by self. The
defendant No.1 argued that the plaintiff
withdrew this amount by self. Contrary to
this submission, it is all along on record
that the power of attorney holder defendant
No.1 was operating the account. A copy of
ledger and account of statement issued by
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the Andhra Bank have also come on the
record.
13. The Bank Account of plaintiff in the
Bank Statement specifies at the top
"General Power of Attorney Holder;
Mr.Prakash B. Sheth". Withdrawal of money
by the plaintiff is not even contended in
the written statement. As rightly pointed
out by the learned counsel for the
plaintiff that the defendant No.1 had
claimed that Mr.Mayur Sheth while leaving
India has expressed the desire to send
further amount for the comfort of
Mr.Babulal Sheth. If that was his desire,
as expressed by the defendant No.1, it
would demolish his case that the plaintiff
had withdrawn the money from her Bank
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account on 10.12.1996 as on one hand
Mr.Mayur Sheth would be withdrawing this
amount of consideration and on the other
hand expressed his desire to send the
further amount. Assuming that two could not
be correlated, it is also the say of the
defendant No.1 that Mr.Mayur Sheth needed
to pay Rs.50 Lakh more as per the oral
family arrangement. Had that been the case
and if the plaintiff and her husband has no
objection to such a transfer, there could
not have been the withdrawal of Rs.20 Lakh
as averred by defendant No.1.
13.1 Again, as mentioned above so far as
sale deed No.4474 is concerned, the amount
of consideration is Rs.10 Lakh by way of
five cheques each of Rs.2 Lakh written on
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09.12.1996. However, the sale deed No.4475
indicates that the amount of Rs.10 Lakh was
received by five cheques of Rs.2 Lakh each
dated 09.12.1996. In the Bank Statement
instead of 10 cheques of Rs.2 Lakh each,
only two credit entries of Rs.20 Lakh each
and no 10 entries of Rs.2 Lakh each is
reflected. This also is arising serious
doubt about the genuineness of the
transaction. This withdrawal behind the
back of the plaintiff and her husband who
were very much in India speaks a volume
about the conduct of the parties.
13.2 Again, as per the report of
Government Registered and Approved Valuer,
Mr.Paras Rangwala the value was at least of
Rs.60 Lakh of the property whereas what has
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been found here is that the sale deeds have
been executed without consideration and if
at all the sale consideration has been
paid, it is much below what the market
value of the property was.
13.3 Again, the plaintiff being the
citizen of USA as discussed above is
obligated to seek prior permission of
Reserve Bank before the sale is made by
her. No such permission was taken prior to
the sale in the year 1996, which again is
in violation of Section 31 of the FERA Act.
Any such transaction without the permission
of Reserve Bank would be violative of
Section 31 of the FERA Act.
14. In these circumstances, the Court needs
to regard the principle of agency which is
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well established and pressed into service
for and on behalf of the respondent-
original plaintiff. Agent is not required
to use the power of attorney for his own
benefit and if he so does it, the burden of
proving that this transaction was made in a
good way and is fair and reasonable would
always be on a person who claims the same
to be a genuine transaction. Otherwise
also, it is for the agent to establish that
the action was with the consent of the
principal and the price paid was of a full
value of the property so purchased.
15. The Apex Court in case of State of
Rajasthan and others vs. Basant Nahata,
reported in (2005) 12 SCC 77 has made it
clear that the power of attorney holder
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acts in a fiduciary capacity and he cannot
use the power for his own benefit.
15.1 The Apex Court has held and
observed thus:
"52.Execution of a power of attorney in terms of the
provisions of the Contract Act as also the Powers-of-
Attorney Act is valid. A power of attorney, we have
noticed hereinbefore, is executed by the donor so as to
enable the donee to act on his behalf. Except in cases
where power of attorney is coupled with interest, it is
revocable. The donee in exercise of his power under such
power of attorney only acts in place of the donor subject
of course to the powers granted to him by reason
thereof. He cannot use the power of attorney for his own
benefit. He acts in a fiduciary capacity. Any act of
infidelity or breach of trust is a matter between the
donor and the donee.
15.2 The Apex Court in case of Krishna
Mohan Kul alias Nani Charan Kul and
another vs. Pratima Maity and other,
reported in (2004) 9 SCC 468 also has held
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that when a person in a fiduciary
relationship with another is in a position
of active confidence, it will be his onus
to prove that there is a absence of fraud,
misrepresentation and undue influence and
that the transaction was fair and real and
genuine as well. The burden of proving the
good faith of the transaction is thrown
upon the dominant party, the party who is
in a position of active confidence.
"12. As has been pointed out by the High Court, the first
Appellate Court totally ignored the relevant materials and
recorded a completely erroneous finding that there was no
material regarding age of the executant when the document
in question itself indicated the age. The Court was dealing
with a case where an old, ailing illiterate person was stated
to be the executant and no witness was examined to prove
the execution of the deed or putting of the thumb
impression. It has been rightly noticed by the High Court
that the courts below have wrongly placed onus to prove
execution of the deed by Dasu Charan Kul on the plaintiffs.
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There was challenge by the plaintiffs to validity of the deed.
The onus to prove the validity of the deed of settlement
was on defendant No. 1. When fraud, mis-representation or
undue influence is alleged by a party in a suit, normally,
the burden is on him to prove such fraud, undue influence
or misrepresentation. But, when a person is in a fiduciary
relationship with another and the latter is in a position of
active confidence the burden of proving the absence of
fraud, misrepresentation or undue influence is upon the
person in the dominating position, he has to prove that
there was fair play in the transaction and that the apparent
is the real, in other words, that the transaction is genuine
and bona fide. In such a case the burden of proving the
good faith of the transaction is thrown upon the dominant
party, that is to say, the party who is in a position of
active confidence. A person standing in a fiduciary relation
to another has a duty to protect the interest given to his
care and the Court watches with zealously all transactions
between such persons so that the protector may not use his
influence or the confidence to his advantage. When the
party complaining shows such relation, the law presumes
everything against the transaction and the onus is cast upon
the person holding the position of confidence or trust to
show that the transaction is perfectly fair and reasonable,
that no advantage has been taken of his position. This
principle has been engrained in Section 111 of the Indian
Evidence Act, 1872 (in short the 'Evidence Act'). The rule
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here laid down is in accordance with a principle long
acknowledged and administered in Courts of Equity in
England and America. This principle is that he who bargains
in a matter of advantage with a person who places a
confidence in him is bound to show that a proper and
reasonable use has been made of that confidence. The
transaction is not necessarily void ipso facto, nor is it
necessary for those who inpeach it to establish that there
has been fraud or imposition, but the burden of establishing
its perfect fairness, adequacy and equity is cast upon the
person in whom the confidence has been reposed. The rule
applies equally to all persons standing in confidential
relations with each other. Agents, trustees, executors,
administrators, auctioneers, and others have been held to
fall within the rule. The Section requires that the party on
whom the burden of proof is laid should have been in a
position of active confidence. Where fraud is alleged, the
rule has been clearly established in England that in the case
of a stranger equity will not set aside a voluntary deed or
donation, however, improvident it may be, if it be free
from the imputation of fraud, surprise, undue influence and
spontaneously executed or made by the donor with his eyes
open. Where an active, confidential, or fiduciary relation
exists between the parties, there the burden of proof is on
the donee or those claiming through him. It has further
been laid down that where a person gains a great advantage
over another by a voluntary instrument, the burden of proof
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is thrown upon the person receiving the benefit and he is
under the necessity of showing that the transaction is fair
and honest."
15.3 In case of Sri U. Vijaya Kumar and
another vs. Smt.Malini V.Rao, reported in
ILR 2016 KAR 2670 a deed was executed by
the attorney in favour of his own wife. The
Court after examining the provisions of
Indian Contract Act particularly Section
215 of the Indian Contract Act has held
that it is clear that the sale deed was
executed without the plaintiff's knowledge
and consent and the same is disadvantageous
to the plaintiff. The defendants had
concealed the same from her and hence, the
plaintiff has repudiated the transaction.
The Court held that the agent is bound not
only not to injure the interest of his
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principal, but also to further it. He is
not to place himself in a position where
his interest might be adverse to that of
the principal.
"29. In the instant case, there is no dispute that the
plaintiff was the owner of 'A' schedule property and the
sale deeds stand in her name. The possession of the
property is with the 1st defendant; he is also the Power of
Attorney Holder of the plaintiff. The plaintiff is a resident
of USA and the 1st defendant by virtue of the Power of
Attorney, is managing the schedule 'A' property. Now,
under the same Power of Attorney the 1st defendant has
executed a sale deed in his wife's favour in respect of the
'B' schedule property for a consideration of Rs.5,00,000/-
without the knowledge and consent of the plaintiff. The
1st defendant being the agent is now claiming adverse
interest of his own in the property. By such transaction, a
cloud is cast upon the title of the plaintiff over the 'B'
schedule property.
30. From the evidence on record it is clear that the sale
deed was executed without the plaintiff's knowledge and
consent and it is disadvantageous to her. The defendants
concealed the same from her and therefore the plaintiff
has repudiated the transaction. The defendants are since
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asserting title over 'B' schedule property by denying the
plaintiff's title, it has become necessary for the plaintiff to
seek a declaration that the said sale deed is null and void
and does not bind her. Section 34 of the Specific Relief
Act confers on the plaintiff a right to seek such
declaration.
***
37. An agent is bound not only not to injure the interest
of his principal, but also to further it. This means that the
agent should not place himself in a position where his
interest might be adverse to that of the principal. No
agent will be permitted to put himself in a position where
his interest conflicts with his duty and therefore, he must
not enter into any transaction which is likely to produce
such results. If an agent desires to do so, he must confide
in the principal and must obtain his prior consent. An
agent cannot, without the knowledge or consent of his
principal, be allowed to make any profit out of the
subject matter of his agency beyond the proper
remuneration as an agent. An agent therefore, may not
use his position as an agent or his principal's property, or
confidential information arising from the agency for
making a profit for himself.
38. Where an agent employed to sell, becomes the
purchaser himself, then he must show beyond reasonable
doubt, that this was with the knowledge and consent of
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the Principal and that the price paid was the full value of
the property so purchased. Thus, in order to set-aside a
transaction by an agent dealing on his own account, the
agent should have concealed material fact dishonestly or
that the dealing should have been to the disadvantage of
the principal.
39. A principal who seeks to set-aside a transaction on the
ground that the provisions of Section 215 of Indian
Contract Act have been violated must take proceedings for
that purpose within a reasonable time after becoming
aware of the circumstances relied on. The burden of proof
lies on the agent to prove full disclosure or that the
transaction is not disadvantageous to the principal.
40. What is disadvantageous to the principal and
what is not depends upon the facts of each case. Anyone
standing in the position of an agent cannot be allowed to
put his duty in conflict with the principal's interest. If the
principal proves that his consent had not been obtained
for such an act and that the agent had not acquainted
him with all material circumstances, it is not further
necessary for him to establish any dishonest concealment
by the agent or that the transaction was to his
disadvantage. Any transaction creating conflict between
the agent's duty and the interest of the principal, must be
presumed to be disadvantageous to the principal who is
not informed of the fact. When there is no disclosure, the
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fairness of the transaction is immaterial and such
transaction should be voidable at the principal's option.
41. In the instant case, admittedly the plaintiff who is
the owner of 'A' schedule property executed a General
Power of Attorney in favour of her brother, the first
defendant on 15.07.1995. The evidence on record shows
that a portion of the 'A' schedule property measuring
about 12,070 square feet as described in the 'B' schedule
is sold by the first defendant in favour of his own wife,
the second defendant for a sum of Rs.5,00,000/- while the
market price of the property as per Government guidelines
was Rs.96,56,000/-. This would demonstrate that the
transaction between the defendants is a nominal one and
in fact, the 1st defendant has purchased the property for
himself and his wife is only a name lender.
42. The material on record discloses that Ex.P3, the
MOU between the plaintiff and the 1st defendant is silent
about the plaintiff agreeing for such sale. In Ex.P18, e-
mail dated 08.01.2009 the 1st defendant requests the
plaintiff to sacrifice 30% of the sale value of 'A' schedule
property to him and his family and to decide the sale
price. He has also advised the plaintiff not to go for
distress sale of the said property owing to bad condition
of real estate market. He had even advised her to wait for
two years and to permit him to run the industry for two
years. In this background if one were to consider the
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defense put forth by the 1st defendant, it would be
patently fallacious and unacceptable.
43. It is also seen from the evidence on record that an
attempt was made by the defendants to conceal the
sale transaction in question, after depositing Rs.5,00,000/-
into her account, by erasing her name in the statement of
accounts and inserting the 2nd defendant's name in that
place. So that she would not come to know about such
deposit and take any action against the defendants
immediately. Not only this, the 1st defendant has sold a
property worth Rs.96,00,000/- just for Rs.5,00,000/- and
this could by no stretch of imagination be said to be
advantageous to the plaintiff. The plaintiff thus has every
right to repudiate the transaction and such a statutory
right is conferred upon the principal under Section 215 of
the Indian Contract Act. The trial court, after appreciating
the legal evidence on record, has come to the right
conclusion and we do not find any reasons to interfere
with the same."
15.4 In case of Mathra Das-Jagan Nath
vs. Jiwan Mal-Gian Chand, reported in ILR
1927 Lahore 7 the Court was examining the
power of attorney, his conduct of entering
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into the transaction where his personal
interest conflicted his duty towards the
principal, to hold that except with the
consent of the latter, he would not be
permitted to enter into any such
transaction.
15.5 The Court also referred to the
decision of Lagunas Nitrate Coy. vs.
Lagunas Syndicate where the Court has held
that it is an equitable rule, which has
always been guarded and enforced with
utmost jealousy, that no fiduciary agent
shall intentionally place himself in a
position in which his interest may conflict
with his duty.
15.6 In case of Nabi Khan (since
deceased) through Lrs and ors. vs. Roojdar
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and ors, reported in (2010) SCC OnLine Raj
604 the transaction by a person in his own
favour had been set aside by the Court.
"13. I have given my thoughtful consideration to the
rival submissions and I have perused the record. In the
present case it is not in dispute that as per the plaintiff
Nabi Khan, an agreement for sale was entered into by
Khurshid, the power of attorney holder of the defendant
Chand Mal for the sale of the land in dispute. Khurshid is
the son of the plaintiff and on the basis of the power of
attorney executed by the defendant Chand Mal in favour
of Khurshid, the agreement to sell of the land in dispute
has been executed by the Khurshid on behalf of the
defendant Chand Mal. Even if the other evidence and the
fact as to whether the deceased defendant Chand Mal only
executed the power of attorney for the purpose of effecting
the partition of the land in dispute and for representing
the deceased defendant in various courts and offices for
the said purpose in favour of Khurshid as the deceased
defendant Chand Mal was residing in the State of Haryana
at the relevant time is ignored for the time being and only
the validity of the agreement and whether specific
performance of the same can be asked for in the facts of
the case read with Section 215 of the Contract Act, 1872,
I am inclined to agree with the submissions of the learned
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counsel for the defendant-respondents that the provisions
of Section 215 of the Indian Contract Act, 1872 are
attracted in the present case. Section 215 of the Indian
Contract Act, 1872 reads as follows:-
"215. Right of principal when agent deals, on his
own account, in business of agency without
principal's consent. If an agent deals on his own
account in the business of the agency, without first
obtaining the consent of his principal and acquainting
him with all material circumstances which have come
to his own knowledge on the subject, the principal
may repudiate the transaction, if the case shows,
either that any material fact has been dishonestly
concealed from him by the agent, or that the dealings
of the agent have been disadvantageous to him."
14. A look at the above provision together with the
Illustration (a) below the Section 215 of the Indian
Contract Act, 1872 which his as follows:-
"(a) A directions B to sell A's estate. B buys the
estate for himself in the name of C. A, 'on
discovering that B has bought the estate for himself,
may repudiate the sale, if he can show that B has
dishonestly concealed any material fact, or that the
sale has been disadvantageous to him."
15. It is clear that the said provision is attracted to
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the facts of the present case.
16. It is not the case of the plaintiff nor so stated by the
power of attorney PW-2 Khurshid that he had apprised
Chand Mal about the transaction with Nabi, the plaintiff,
and obtained his consent because the power of attorney
holder PW-2 Khurshid was none other than the son of the
plaintiff Nabi Khan. In the transaction the interest of
Khurshid, the agent of the defendant, was inherent at the
land was agreed to be sold to his father.
17. Applying the facts of the present case, it is clear from
the evidence of the plaintiff himself that at the relevant
time of the execution of the alleged agreement for sale on
17.02.1986 the price of land was much higher than
Rs.6,000/- per bigha which was agreed to by the power of
attorney holder Khurshid, the son of the plaintiff while
entering into the agreement for sale with the plaintiff.
Thus, the agreement having been made at a price much
below what was the price of land at the relevant time, as
admitted by the plaintiff of Rs.50,000/- in 1992 the price
could safely have been Rs.20,000/- as determined by the
learned trial court in 1986. The said agreement was
definitely disadvantageous to the principal in the facts and
circumstances of the case. On account of the above, the
principal (deceased defendant Chand Mal) was entitled to
repudiate the contract.
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18. Looking at it from another angle, the son Khurshid,
the power of attorney holder had entered into an
agreement with the plaintiff Nabi Khan who is none other
than the father of the power of attorney holder Khurshid
it can safely be inferred that the agreement had been
entered into by the agent creating an interest in his own
favour. There is no evidence in the present case to suggest
that Khurshid while doing so had taken the consent of the
deceased defendant Chand Mal. Thus, both the conditions
which are there under Section 215 of the Indian Contract
Act, 1872 are attracted to the facts and circumstances of
the present case. In that view of the matter, the plaintiff
is not entitled to have the specific performance of the
agreement (Exhibit-2)"
15.7 In case of Central Board of
Secondary Education and another vs. Aditya
Bandopadhyay and others, reported in
(2011) 8 SCC 497 the idea of fiduciary
relationship has been explained in detailed
by the Apex Court.
"38.The term 'fiduciary' and 'fiduciary relationship' refer
to different capacities and relationship, involving a
common duty or obligation.
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38.1 Black's Law Dictionary defines 'fiduciary
relationship' thus:
"A relationship in which one person is under a duty
to act for the benefit of the other on matters within
the scope of the relationship. Fiduciary relationships -
such as trustee-beneficiary, guardian-ward, agent-
principal, and attorney-client - require the highest
duty of care. Fiduciary relationships usually arise in
one of four situations : (1) when one person places
trust in the faithful integrity of another, who as a
result gains superiority or influence over the first, (2)
when one person assumes control and responsibility
over another, (3) when one person has a duty to act
for or give advice to another on matters falling within
the scope of the relationship, or (4) when there is a
specific relationship that has traditionally been
recognized as involving fiduciary duties, as with a
lawyer and a client or a stockbroker and a customer."
38.2 American Restatements (Trusts and Agency) define
'fiduciary' as one whose intention is to act for the benefit
of another as to matters relevant to the relation between
them. The Corpus Juris Secundum attempts to define
fiduciary thus :
"A general definition of the word which is
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sufficiently comprehensive to embrace all cases cannot
well be given. The term is derived from the civil, or
Roman, law. It connotes the idea of trust or
confidence, contemplates good faith, rather than legal
obligation, as the basis of the transaction, refers to
the integrity, the fidelity, of the party trusted, rather
than his credit or ability, and has been held to apply
to all persons who occupy a position of peculiar
confidence toward others, and to include those
informal relations which exist whenever one party
trusts and relies on another, as well as technical
fiduciary relations.
The word 'fiduciary,' as a noun, means one who
holds a thing in trust for another, a trustee, a person
holding the character of a trustee, or a character
analogous to that of a trustee, with respect to the
trust and confidence involved in it and the scrupulous
good faith and candor which it requires; a person
having the duty, created by his undertaking, to act
primarily for another's benefit in matters connected
with such undertaking. Also more specifically, in a
statute, a guardian, trustee, executor, administrator,
receiver, conservator, or any person acting in any
fiduciary capacity for any person, trust, or estate.
Some examples of what, in particular connections, the
term has been held to include and not to include are
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set out in the note."
38.3 Words and Phrases, Permanent Edition defines
'fiducial relation' thus :
"There is a technical distinction between a 'fiducial
relation' which is more correctly applicable to legal
relationships between parties, such as guardian and
ward, administrator and heirs, and other similar
relationships, and 'confidential relation' which
includes the legal relationships, and also every other
relationship wherein confidence is rightly reposed and
is exercised.
Generally, the term 'fiduciary' applies to any person
who occupies a position of peculiar confidence
towards another. It refers to integrity and fidelity. It
contemplates fair dealing and good faith, rather than
legal obligation, as the basis of the transaction. The
term includes those informal relations which exist
whenever one party trusts and relies upon another, as
well as technical fiduciary relations."
38.4 In Bristol and West Building Society vs. Mothew
the term fiduciary was defined thus :
"A fiduciary is someone who has undertaken to act
for and on behalf of another in a particular matter in
circumstances which give rise to a relationship of
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trust and confidence. The distinguishing obligation of
a fiduciary is the obligation of loyalty..... A fiduciary
must act in good faith; he must not make a profit out
of his trust; he must not place himself in a position
where his duty and his interest may conflict; he may
not act for his own benefit or the benefit of a third
person without the informed consent of his principal."
38.5 In Wolf vs. Superior Court the California Court of
Appeals defined fiduciary relationship as under :
"any relationship existing between the parties to the
transaction where one of the parties is duty bound to
act with utmost good faith for the benefit of the
other party. Such a relationship ordinarily arises
where confidence is reposed by one person in the
integrity of another, and in such a relation the party
in whom the confidence is reposed, if he voluntarily
accepts or assumes to accept the confidence, can take
no advantage from his acts relating to the interests of
the other party without the latter's knowledge and
consent."
39. The term 'fiduciary' refers to a person having a duty to
act for the benefit of another, showing good faith and
condour, where such other person reposes trust and special
confidence in the person owing or discharging the duty.
The term 'fiduciary relationship' is used to describe a
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situation or transaction where one person (beneficiary)
places complete confidence in another person (fiduciary) in
regard to his affairs, business or transaction/s. The term
also refers to a person who holds a thing in trust for
another (beneficiary). The fiduciary is expected to act in
confidence and for the benefit and advantage of the
beneficiary, and use good faith and fairness in dealing with
the beneficiary or the things belonging to the beneficiary. If
the beneficiary has entrusted anything to the fiduciary, to
hold the thing in trust or to execute certain acts in regard
to or with reference to the entrusted thing, the fiduciary
has to act in confidence and expected not to disclose the
thing or information to any third party."
15.8 The Apex Court in case of Ashwinkumar
K. Patel vs. Upendra J. Patel and others,
reported in AIR (1999) SC 1125 held thus:
"5. The High Court, while dealing with this appeal
preferred by defendants 15 to 19, observed that the trial
Court had mainly relied upon a compromise decree dated
14.8.1992 between the owners(defendants 1 to 14) and
defendants 20 to 25 in an earlier suit, bearing Suit
No.1384/88 filed by defendants 20 to 25 against the
owners on the basis of an agreement dated 14.10.1980,
allegedly executed by the same owners. According to the
High Court, while it was true that the said defendants 20
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to 25 accepted the possession of the owners defendants 1
to 14, the said admission related to the date of
compromise dated 26.4.1990 and not to 14.8.1992 when
the compromise was recorded and hence the trial Court
was wrong in thinking that the present defendants 15 to
19 could not have come into possession on 16.7.1991 from
the owners. According to the High Court, the Trial Court
was wrong in thinking that there was an admission by
defendants 20 to 25 of the possession of the owners,
defendants 1 to 14 as on 14.8.92, the date when the
compromise was recorded and also in thinking that
defendants 15 to 19 could not have come into possession
on 16.7.1991. The admission, if any, related to 26.4.90
the date of compromise and there was, according to the
High Court, no inconsistency with the case of defendants
15 to 19 of possession being given to them under the
agreement dated 16.7.1991. Further, the finding of the
trial Court that the property was new tenure was
challenged even by the plaintiff by filing A.O. 476 of
1997. The High Court said that `this also makes the
factual foundation of the trial Court's order erroneous'. For
the above reasons, the High Court set aside the order of
the trial Court and remitted the matter for fresh decision.
It is against the above order that the plaintiff has
preferred this appeal.
6.The point for consideration is whether the order of the
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High Court in remitting the matter to the trial Court was
necessary? Question also is whether this court should
remand the case to the High Court in the event of this
Court holding that the remand by the High Court was not
called for? If not, whether the order of the trial Court is
to be sustained?
7. In our view, the High Court should not ordinarily
remand a case under Order 41 Rule 23 CPC to the lower
Court merely because it considered that the reasoning of
the lower Court in some respects was wrong. Such remand
orders lead to unnecessary delays and cause prejudice to
the parties to the case. When the material was available
before the High Court, it should have itself decided the
appeal one way or other. It could have considered the
various aspects of the case mentioned in the order of the
trial Court and considered whether the order of the trial
Court ought to be confirmed or reversed or modified. It
could have easily considered the documents and affidavits
and decided about the prima-facie case on the material
available. In matters involving agreements of 1980 (and
1996) on the one hand and an agreement of 1991 on the
other, as in this case, such remand orders would lead to
further delay and uncertainty. We are, therefore, of the
view that the remand by the High Court was not
necessary."
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15.9 In case of Municipal Corporation,
Hyderabad vs. Sunder Singh, reported in
(2008) 8 SCC 485 the Apex Court has held
and observed as follow:
"18.It is now well settled that before invoking the said
provision, the conditions precedent laid down therein must
be satisfied. It is further well settled that the court should
loathe to exercise its power in terms of Order XLI Rule 23
of the Code of Civil Procedure and an order of remand
should not be passed routinely. It is not to be exercised
by the appellate court only because it finds it difficult to
deal with the entire matter. If it does not agree with the
decision of the trial court, it has to come with a proper
finding of its own. The appellate court cannot shirk its
duties.
***
33.Order XLI rule 23A of the Code of Civil Procedure is
also not attracted. The High Court had not arrived at a
finding that a re-trial was necessary. The High Court
again has not arrived at a finding that the decree is liable
to be reversed. No case has been made out for invoking
the jurisdiction of the Court under Order XLI Rule 23 of
the Code.
34. An order of remand cannot be passed on ipse
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dixit of the court. The provisions of Order II Rule 2 of the
Code of Civil Procedure as also Section 11 thereof could
be invoked, provided of course the conditions precedent
therefor were satisfied. We may not have to deal with the
legal position obtaining in this behalf as the question has
recently been dealt with by this Court in Dadu Dayalu
Mahasabha, Jaipur (Trust) v. Mahant Ram Niwas & anr."
16.The defendants having failed to prove
that the transactions was made in good
faith, bona-fide for fair consideration in
the interest of the principal, and with the
plaintiff's knowledge he being the agent,
this transaction of sale to his own wife
and son surely can not be sustained to be a
genuine sale.
17. Reference would be apt at this stage to
the application moved by the plaintiff vide
Exhibit 132 for issuing the witness summons
to the Assistant General Manager, Andhra
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Bank, Parimal Society, C.G.Road, Ahmedabad.
She had stated that the certified copies of
the statements of two of her accounts, NRO
account No.1/1 and NRE No.1/5 had been
obtained. She would require the presence of
Assistant General Manager, Andhra Bank to
produce the statement of the account of
both NRO and NRE accounts by an authorized
representative as per the Banking Books of
Evidence Act and to give deposition. The
Court had accordingly issued the summons.
18. Vide Exhibit 134, the plaintiff's
witness Mr.Vadali Gangadhar Narayan
Shashtri serving as a Senior Manager of
Andhra Bank had deposed that original Books
of Accounts are in the custody of the Bank,
he verified the copy. All the three
documents, the account of SBNRO 1/1,
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account No.NRE/1/5 and the ledger of NRE
account No.1/5 have been produced by him.
He had verified them and these documents
have been exhibited at Exhibit 136, 137 and
138. His attention was drawn to the
document at Exhibit 137 which according to
him is operated by the power of attorney,
it does not speak about the power of
attorney and his attention was drawn to the
document at Exhibit 138 that also is the
account operated by the power of attorney.
In his cross examination, this witness had
agreed that in particular column 'self' is
shown at Exhibit 137. In ledger it is not
clear that on 10.12.1996 whether it was a
transfer or by self transaction. There
could be a possibility that it may be a
transfer entry, the original ledger,
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according to him, is in the Branch.
According to him, all the three documents
are the original true copies of the
original account ledger.
19. Exhibit 136 when is seen, it is
reflecting the entry of Rs.20 Lakh on
10.12.1996, which had been withdrawn by
self. These are certified to be the true
copies of the account/ledger/books
maintained in ordinary course of the
business of the Bank. These are all
accounts held by Mrs.Shashikala Mayur Sheth
and the General Power of Attorney
Mr.Prakash B.Sheht defendant No.1. This, of
course, is reflective of the fact that the
defendant No.1 Mr.Prakash Sheth is a
General Power of Attorney and this
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withdrawal of the amount of Rs.20 Lakh is
through the self. This will assume
importance in as much as the transfer has
been effected on 09.12.1996 and the
cancellation of the power of attorney was
by a letter dated 08.12.1996. The stay of
the plaintiff and her husband in India
because of her niece's wedding was from
02.12.1996 to 11.12.1996.
20. As mentioned above, it is not the case
in the written statement also of the
defendant No.1 that the amount of
consideration of Rs.20 Lakh had been
withdrawn by the plaintiff, on the
contrary, heavy reliance is placed on the
communication of defendant No.4 father of
defendant No.1 and father-in-law of the
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plaintiff Shashikalaben, who had insisted
that the entire transaction of transfer of
property had taken place pursuant to the
oral agreement and the family arrangement
that had been made. In fact, from the
beginning it is emphasised that the family
interest had resulted into transfer of the
property.
21. It is necessary to make a mention of
the cross examination of the defendant
No.1, who had been questioned seriously and
vociferously that Laxmichand Godhardas
Sheth had no HUF business at any point of
time. The business was started according to
the defendant No.1, around 1945 and he was
not born also. The cotton-waste business of
HUF had also resulted into its paying
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income tax which these persons did not
have. This business was closed 35 years
back and he was 28 years of age. Defendant
No.1 and the husband of the plaintiff
Mr.Mayurbhai Sheth both had gone to USA for
their study and once again, Mr.Mayurbhai
went to USA in January 1972.
21.1 The defendant No.4 had two other
brothers Mr.Jayantilal and Mr.Rameshbhai.
On 26.06.1974, Mr.Mayurbhai Sheth was given
in adoption by defendant No.4 to his own
brother Mr.Jayantibhai and from 26.06.1974
Mr.Mayurbhai Sheth shifted to
Mr.Jayantibhai's residence at 16,
Subhasnagar, Shahibaug area. He with his
wife had continued to reside there till
1980 and the plaintiff gave birth to two
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children in the meantime. He was also cross
examined on the business of Security
Equipment Private Limited and other
businesses started at GIDC, Plot NO.47/A.
According to him, he had joined the
business in the year 1971.
21.2 There were other family members who
were the share holders, which included his
grandmother, Mr.Mayurbhai Sheth and his
wife defendant No.2. He had no written
details or any document to show that
Mr.Mayurbhai was the share holder there. He
agreed that Shri Jayantibhai Laxmichand
Sheth had cotton-waste business as a
proprietor. The business of Security
Equipment Private Limited had run into
rough weather because of the liver problems
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and was closed down in the year 1979. It
was for the treatment of the son of
Mr.Mayurbhai who had meningitis that
plaintiff and Mr.Mayurbhai, her husband had
shifted to America in February 1980 where
the son was operated and Mr.Mayurbhai
decided to settle in USA only. According to
the defendant No.1, he and Mr.Mayurbhai
Sheth both were the HUF member of Babulbhai
Laxmichand HUF and till his brother was
given into adoption, he continued to be the
member of HUF.
22. There appears to be an emotional
appeal by defendant No.4-the father to his
son Mr.Mayur Sheth and to the plaintiff,
who is respondent herein, where he speaks
of the general and broad understanding as
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well of the family arrangement. That
according to him, which had resulted into
the buying of the suit property as well as
the transfer of the same in the name of the
defendant Nos.2 and 3. He also speaks of
this arrangement being the result of
understanding of family that the defendant
No.1 and his family needed the place to
reside and his having agreed to that.
Again, over and above that, the amount of
Rs.50 Lakh he had agreed to contribute
towards the need of the family.
23. However, the facts remains that this is
all oral family arrangement which is being
talked about, there is nothing in the
writing nor any valid document is put-forth
to substantiate their version. Even if, it
is presumed that it was understood by
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everyone that the defendant No.1 as the
brother and son of defendant No.4 would
continue to reside with his family members
at the suit property and the power of
attorney was given to him for that purpose,
there is bound to be cogent and acceptable
evidence to that effect. It is not unusual
in a joint family in Indian society to
continue to have internal arrangement along
the things however, till everything gets
worked out smoothly, it is however, once
there is a challenge before the Court, it
shall need to regard essentially the
documentary as well as oral evidences on
the basis of the exhibited documents. Oral
evidence which has come on the record and
the chronology of events which have taken
place, if cumulatively, are examined, this
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appears unfailingly to be an action on the
part of an agent in breach of the settled
principle of law where the agent is
expected to act as per the expressed
consent and nod of the principal. He cannot
in a fiduciary relationship divert the
property for his own benefit. An attempt
was made on the part of the trial Court and
this Court also to ensure that the parties
amicably resolve the disputes, considering
closeness of relationship however, that has
surely not happened and therefore, the law
shall need to take its own course.
23. The Trial Court has committed no error
in setting aside the sale and directing the
defendant to handover the possession of the
suit property in the stipulated time
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period. All the issues are answered correctly
and in accordance with law.
24. We notice that this Court was requested
by the appellant to direct maintenance of the
status quo in relation to the title,
possession and the nature of the suit
property at the time of admission. This Court
(Coram:Dr.Justice Vineet Kothari and Justice
B.N.Karia) in its order dated 02.08.2021 with
certain directions for amicable settlement
had granted the status quo order dated
15.07.2021 to be confirmed till the disposal
of the appeal.
25. We inquired from the learned counsels on
both the sides to note that the disputes
between the family has not ended amicably as
otherwise was proposed. Any of the parties,
if has deposited any sum pursuant to the
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direction of this Court, let the amount be
returned to the concerned party with accrued
interest.
26. With the aforesaid discussion, Appeal
fails and stands dismissed.
27. Civil Application is also stands disposed
of in wake of disposal of the appeal.
(SONIA GOKANI, J)
(HEMANT M. PRACHCHHAK,J)
After the pronouncement of the judgment,
appellant has sought the time of eight (8)
weeks to stay the judgment and order to
enable the appellant to challenge this
appeal, which is not necessary.
(SONIA GOKANI, J)
(HEMANT M. PRACHCHHAK,J)
M.M.MIRZA
