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2015 Supreme(Cal) 105
High Court of Judicature at Calcutta
DEBANGSU BASAK, J.
Kumkum Mittal & Others – Appellant
Versus
Robin Paul & Others – Respondent
E.O.S. No. 1 of 1985 & C.S. No. 240 of 1990 (Original Side)
Decided On : 23-02-2015
Anirban Ray, S. Mukherjee, S. Kundu, Advocates For the Plaintiffs
Aniruddha Mitra, D2, Moloy Ghose, Sr. Adv., D. Sen, M.K. Seal, Advocates For the Defendants
Headnote:
CONTRACT - UNDUE INFLUENCE - SUIT FOR DECLARATION AND PERPETUAL INJUNCTION - SHARE TRANSFER - EVIDENCE ACT, 1872, SECTION 32 - INDIAN CONTRACT ACT, 1872, SECTIONS 16, 17 - LIMITATION ACT, 1963, ARTICLES 56, 59 - Held, the defendant Nos.1, 2 and 3 were acting in concert with each other. The evidence of the plaintiff No.2 could be relied upon to arrive at finding on the issues framed in the instant suit. The defendant Nos.1, 2 and 3 were in a position to exert undue influence. Exhibit 'K' is unconscionable by reason of the consideration for the share transfer and the fact that a consultant engaged for the purpose of taking out the defendant Nos.6 and 7 from its financial difficulties gets to become over of the defendant Nos.6 and 7 for a sum of Rs.1 Lakh.
Fact of the Case:
The plaintiffs claim that the original plaintiff No.1 was in absolute control and management of two companies, namely, the New Red Bank Tea Estate Company Private Limited and Surendranagar Tea Estate Private Limited. The plaintiffs claim that the first defendant took over the control and management of the two companies wrongfully and illegally from the original plaintiff No.1. The suit is for declaration and perpetual injunction.
Finding of the Court:
The defendant Nos.1, 2 and 3 were acting in concert with each other. The evidence of the plaintiff No.2 could be relied upon to arrive at finding on the issues framed in the instant suit. The defendant Nos.1, 2 and 3 were in a position to exert undue influence. Exhibit 'K' is unconscionable by reason of the consideration for the share transfer and the fact that a consultant engaged for the purpose of taking out the defendant Nos.6 and 7 from its financial difficulties gets to become over of the defendant Nos.6 and 7 for a sum of Rs.1 Lakh.
Issues: 1. Did the defendant Nos.6 and 7 suffer set back between 1975 to 1981 not only because of the set back in the Tea industry but also due to the mismanagement and/or insufficient management of the plaintiffs and also misappropriation of the funds of the defendant Nos.6 and 7 by the plaintiff as alleged in paragraph 13 of the written statement? 2. Did the defendant No.1 make any representation, promise or give any assurance to or induce or pressurize the original plaintiffs as alleged in the plaint? 3. Did the defendant No.1 do anything to induce the original plaintiffs as alleged in paragraphs 23 and 26 of the plaint? 4. Was the defendant No.11 introduced to the original plaintiff No.1 by the defendant No.1 as alleged in paragraph 45(i) of the plaint? 5. Has the defendant failed or neglected or refused to perform any part of its obligations under the agreement dated 14th May, 1981 as alleged in paragraph 47 of the plaint? 6. Were the transactions mentioned in paragraph 45 of the plaint brought about by the defendant No.1 to 5 in collusion and conspiracy with each other and by perpetrating on the original plaintiffs with intent to deceive the plaintiffs as alleged in paragraph 54 of the plaint? 7. Are the agreements dated 14th May, 1981 and 31st May, 1981 and the transaction mentioned in paragraph 45 of the plaint vitiated by fraud or are void or voidable or not binding on the plaintiff as alleged in paragraphs 54, 55 and 60 of the plaint? 8. Is the defendant No.1 not entitled to exercise any right title or interest in respect of the shares in the defendant Nos.6 and 7 and in respect of the Dharanipur Tea Estate as alleged in paragraph 61 of the plaint? 9. Are the plaintiffs entitled to or can claim restoration of possession of Red Bank Tea Estate, Surenddranagar Tea Estate and Dharanipur Tea Estate as alleged in paragraph 61 of the plaint?
Ratio Decidendi: The defendant Nos.1, 2 and 3 were acting in concert with each other. The evidence of the plaintiff No.2 could be relied upon to arrive at finding on the issues framed in the instant suit. The defendant Nos.1, 2 and 3 were in a position to exert undue influence. Exhibit 'K' is unconscionable by reason of the consideration for the share transfer and the fact that a consultant engaged for the purpose of taking out the defendant Nos.6 and 7 from its financial difficulties gets to become over of the defendant Nos.6 and 7 for a sum of Rs.1 Lakh.
Final Decision: There will be a decree in terms of prayers (a), (b) and (d). The plaintiffs will also be entitled to decree for delivery upon cancellation of Exhibit ‘K’. Documents described in paragraph 60(c), (d) and any other documents in relation to or in connection with or in consequences of Exhibit ‘K’. The plaintiffs will also be entitled to decree in terms of prayer (f) of the plaint with regard to Red Bank Tea Estate and Surendranagar Tea Estate. The plaintiffs will also be entitled to decree in terms of prayers (h) and (i).
Debangsu Basak, J.
The suit is for declaration and perpetual injunction.
The plaintiffs claim that the original plaintiff No.1 was in absolute control and management of two companies, namely, the New Red Bank Tea Estate Company Private Limited and Surendranagar Tea Estate Private Limited. The plaintiffs claim that the first defendant took over the control and management of the two companies wrongfully and illegally from the original plaintiff No.1.
The defendant Nos.6 and 7 had enjoyed credit facilities from the defendant No.2. The original plaintiff No.1 and the plaintiff No.2 were the guarantors of such credit facilities. Title deeds of the tea estates of the defendant Nos.6 and 7 and Dharanipur Tea Estate were kept as mortgage with the defendant No.2. With the passage of time and the tea industry coming into an economic slump, the credit facilities enjoyed by the defendant Nos.6 and 7 from the defendant No.2 became bad. The original plaintiff No.1 had explored various ways of repaying the defendant No.2. According to the plaintiffs, the defendant No.3 was a high official of the defendant No.2. The defendant Nos.1, 2 and 3 had engineered and took over of the shares held by the original plaintiff No.1 and the other plaintiffs in the defendant Nos.6 and 7 by the defendant No.1. The plaintiffs complain that the defendant Nos.1, 2 and 3 coerced and exercised undue influence over the original plaintiff No.1 and the plaintiff No.2 to make them enter into two agreements on May 14, 1981 and May 31, 1981. By exercising undue influence and coercion the defendant Nos.1, 2 and 3 had made the original plaintiff No.1 and the plaintiff No.2 part with the shares held by them in the defendant Nos.6 and 7. By this mechanism the management of the defendant Nos.6 and 7 changed from the plaintiffs to the defendant No.1, without any correspondent benefit or the premises made being fulfilled. All these had happened through a series of transactions on and from May 14, 1981. According to the plaintiffs, these transactions were brought about by the defendant Nos.1, 2 and 3 by exercising undue influence and coercion on the original plaintiff No.1 and the other plaintiffs.
The plaintiffs seek a declaration that all transactions made by the original plaintiff No.1 and the other plaintiffs on and from May 14, 1981 in respect of the defendant Nos.6 and 7 are null and void and not binding upon the plaintiffs. They seek consequential reliefs with regard thereto.
The defendant No.1 and the defendant No.2 are contesting the instant suit.
The defendant No.1 has denied exercising any undue influence or coercion on the original plaintiff No.1 or any of the plaintiffs in relation to any of the transactions. The transactions alleged by the plaintiffs in respect of the defendant Nos.6 and 7 are admitted. The defendant No.1 claims that no undue influence was exerted in arriving at the transactions on May 14, 1981 or subsequent thereto.
It is contended that the transactions in question is not one single transaction but a series of transaction entered into between diverse persons. The defendant Nos.6 and 7 had approved of such transactions in their Board meetings.
Nine issues were settled by the Order dated March 30, 2000. Such issues are as follows:-
1. Did the defendant Nos.6 and 7 suffer set back between 1975 to 1981 not only because of the set back in the Tea industry but also due to the mismanagement and/or insufficient management of the plaintiffs and also misappropriation of the funds of the defendant Nos.6 and 7 by the plaintiff as alleged in paragraph 13 of the written statement?
2. Did the defendant No.1 make any representation, promise or give any assurance to or induce or pressurize the original plaintiffs as alleged in the plaint?
3. Did the defendant No.1 do anything to induce the original plaintiffs as alleged in paragraphs 23 and 26 of the plaint?
4. Was the defendant No.11 introduced to the original plaintiff No.1 by the defendant No.1 as alleged in p
