IMPORTANT POINT
When fraud, misrepresentation or due influence is alleged by a party in a suit, normally, the burden is on him to prove such fraud etc. but when a person is in fiduciary relationship with another and the latter is in a position of active confidence the burden of proving the absence of fraud, misrepresentation on undue influence is upon the person in the dominating position.

Headnote:Civil Procedure Code, 1908-Section 100-Evidence Act, 1872-Section 111-Deed of settlement-Challenged as void and invalid document-Fight between relatives of executant-Suit for declaration and permanent injunction-Suit property originally belonged to one DK who died in year 1972-His son CK died in year 1979-Suit filed by daughter of CK coming to know from office of Block Land Reforms Officer that defendant 1 had filed a registered deed of settlement-Suit dismissed by trial Court and also by first Appellate Court-Second appeal-In deed of settlement donor indicated his age to be 106 years-High Court held that approach of both lower Courts was erroneous-Courts below wrongly placed onus on plaintiffs to prove validity of deed of settlement-Whether High Court was justified to interfere with concurrent findings recorded by trial Court and first Appellate Court while dealing with second appeal u/s 100 of the Code-(Yes).
       Held : Though as rightly contended by learned counsel for the appellants the scope for interference with concurrent findings of fact while exercising jurisdiction under Section 100 CPC is very limited, where the trial Court and/or the first Appellate Court misdirected themselves in appreciating the question of law and placed the onus on the wrong party certainly there is a scope for interference under Section 100 CPC after formulating a substantial question of law. (Paras 9)
        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. 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 jealousy 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 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 impeach 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 is thrown upon the person receiving the benefit and he is under the necessity of showing that the transaction is fair and honest. (Para 12)

Judgement Key Points

What is the burden of proof regarding fraud, misrepresentation, or undue influence in a fiduciary/confidential relationship?

What is the scope for interference under Section 100 CPC when concurrent findings of fact exist but may be misdirected on question of law?

What are the principles governing the execution validity of a deed of settlement where the executant is old/illiterate and in a fiduciary relationship?

JUDGMENT

Arijit Pasayat, J.-Leave granted.

2. By the impugned judgment, learned Single Judge of the Calcutta High Court held that the deed of settlement purported to have been executed by Dasu Charan Kul (hereinafter referred to as the executant ) was a void and invalid document. The fight between relatives of the executant centers round a registered deed of settlement purported to have been executed on 11.7.1970 by the executant. A suit for declaration and permanent injunction was filed by Pratima Maity, daughter of Phani Charan Kul, son of Dasarathi Kul. The suit property originally belonged to Dasarathi Kul who died in the year 1972. His Son Phani Charan Kul died in the year 1979. Averments in the plaint were to the effect that on coming to know from the office of the Block Land Reforms Officer that defendant No. 1- Krishna Mohan Kul (appellant No.1 in the present appeal) had filed a registered deed of settlement dated 11.7.1970 it was necessary to get the deed declared to be void and invalid as the same was a forged document. There was no existence of the witnesses whose names appeared in the said deed which was created to grab the property of the plaintiffs. It was in this background alleged that the deed of settlement was created by Krishna Mohan Kul (defendant No.1) with oblique motive. The contesting defendants took the stand by filing written statements that the deed was perfectly in order and no illegality was attached thereto.

3. Before the trial Court several witnesses were examined to contend that the executant was more than 100 years of age at the time of alleged execution of the deed in question. He was paralytic and his mental and physical condition were not in order. He was practically bed ridden with paralysis and though his left thumb impression was stated to be affixed on the document, there was no witness who could substantiate that in fact he had put his thumb impression. That being the position, the deed was to be declared as void and invalid. The contesting defendants took a stand that it was not as if executant was not in a fit condition physically or mentally at the time of execution of the deed. The trial Court disbelieved the plea of plaintiffs and dismissed the suit.

4. Similar was the fate before the first Appellate Court. On being approached by the plaintiffs the following questions were framed by the High Court in the Second Appeal:

"Whether the deed of settlement executed by the predecessor-in-interest of the parties is valid in law". In fact, such substantial question of law should also embrace the question as to whether the judgments of the courts below are perverse in appreciating the said deed of settlement."

5. High Court took the view that the approach of both the trial Court and the first Appellate Court was erroneous. The following factual aspects were considered relevant. Plaintiffs produced certified copy of the deed, while defendants produced the original one. It was a deed of settlement where Dasu Charan Kul was described as the donor, and curiously the donar and two others namely Nani Charan Kul and his minor son Jagdish Kul. The L.T.I. was identified by one Hridav Krishna Das. The deed was typed by one N.R. Dutta and in the column meant for the names of witnesses, names of scribe Hridav Krishna Das along with two others namely Nantu Bihari Ray and P.K. Maity appeared. In the deed of settlement donor indicated his age to be 106 years. It was also indicated that he was becoming lackluster due to old age and various ailments and for other mental shocks. According to High Court, courts below wrongly placed the onus on the plaintiffs to prove the validity of the deed of settlement. It was observed that the first Appellate Court dealt with the matter in a very slip shod manner even coming to a conclusion that age of the executant was not proved. It was pointed out that the deed in question indicates that the executant was 106 years old at the time of execution. None of the witnesses of the d

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2003 Supreme(SC) 867

What is the burden of proof regarding fraud, misrepresentation, or undue influence in a fiduciary/confidential relationship?

What is the scope for interference under Section 100 CPC when concurrent findings of fact exist but may be misdirected on question of law?

What are the principles governing the execution validity of a deed of settlement where the executant is old/illiterate and in a fiduciary relationship?

Cases Referred (4)