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1984 Supreme(Mad) 486
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K. SHANMUKHAM & THE HONOURABLE MR. JUSTICE RAMASWAMI
Andalammal - Appellant
Versus
Rajeswari Vedachalam (Deceased By Lr) and Others - Respondent
Case No : L.P.A. Nos. 77 and 78 of 1978
Decided On : 27 November 1984
Headnote:
The court set aside the lower court's judgment and restored the trial court's decree in favor of the appellant, holding that the sale deed (Ex. B2) was voidable due to undue influence, coercion, and fraud practiced by the first respondent (appellant before it) and her manager (D.W. 4) on the appellant.
Fact of the Case:
The appellant, P.W. 1, filed a suit seeking to set aside the sale deed (Ex. B2) executed by her in favor of the first respondent, D.W. 5, on the ground that it was procured through undue influence, coercion, and fraud. The first respondent claimed that the sale was made to compensate for the appellant's husband's (P.W. 4) misappropriation of funds from her business. The second respondent, D.W. 6, purchased the property from the first respondent and claimed to be a bona fide purchaser for value without notice of any defect in title.
Finding of the Court:
The court found that the appellant had adduced sufficient evidence to establish that the first respondent and her manager had exercised undue influence and coercion on her to execute Ex. B2. It noted that the appellant was an illiterate woman who could only sign her name, that she was not aware of the contents of Ex. B2 when she signed it, and that she was threatened with arrest if she refused to sign. The court also found that the sale price of Rs. 8000 was grossly inadequate, considering that the property was worth Rs. 15,000 at the time of the sale.
Issues: 1. Whether the sale deed (Ex. B2) was procured through undue influence, coercion, and fraud. 2. Whether the second respondent was a bona fide purchaser for value without notice of any defect in title.
Ratio Decidendi: The court applied the principles of undue influence and coercion as set out in Section 16 of the Indian Contract Act, 1872. It held that the first respondent and her manager were in a position to dominate the appellant's will and that they had used that position to obtain an unfair advantage over her by taking Ex. B2. The court also found that the transaction was unconscionable, as the appellant was forced to give up her property and execute a promissory note for the balance due, while her husband's lorry was also sold. The court further held that the second respondent was not a bona fide purchaser for value without notice, as he had failed to make proper inquiries about the title to the property.
Final Decision: The court set aside the lower court's judgment and restored the trial court's decree in favor of the appellant, holding that Ex. B2 was voidable due to undue influence, coercion, and fraud. It also directed the legal representatives of the first respondent to pay the court-fee due to the government in the appeals.
SHANMUKHAM
These appeals are directed against the judgment of Ismail J. as he then was, in A. S. Nos. 843 and 844 of 1971. The learned Judge set aside the common judgment and decrees of the learned Subordinate Judge of Cuddalore in O. S. Nos. 23 of 1967 and 144 of 1968 respectively.
2. O. S. 23 of 1967 is by the present appellant for setting aside the sale deed dated 17-7-1965 relating to the suit property marked as Ex. B 2, for recovery of possession of the said property and also for recovery of mesne profits, both past and future. Respondents 1 and 2 in L. P. A. 77 of 1978 are defendants 1 and 2 in that suit. The second respondent is an alienee of the suit property from the first respondent.
3. The case of the appellant is that Ex. B 2 sale for Rs. 8000 was brought about by undue influence, coercion and fraud. According to the appellant, the first respondent, her Manager Venkatarama Naidu and her husband (appellant's husband) were in a position to dominate her will having regard to the relative positions they occupied as against her. It is her further case that Ex. B 2 transaction is a most unconscionable one under which the first respondent had obtained an unfair advantage. She further alleged that she is an illiterate and at the time of execution and registration of Ex. B 2, she was not apprised of the nature and particulars of the transaction. Her further complaint is that D. W. 4, the first respondent's manager threatened that if Ex. B 2 sale deed was not executed, both her husband and herself would be sent to jail. It is her further case that the second respondent's guardian was quite aware of the fact that Ex. B. 2 sale is void and unenforceable and, therefore, the second respondent is not a bona fide purchaser for value. She also stated that she is the real owner of the suit property and the stand taken by the first respondent that she is benamidar for her husband is wholly baseless.
4. The first respondent's defence is that the appellant's husband is the real owner of the suit property, that he has been enjoying the property paying taxes etc., and that as he was in need of money he raised a loan with the Bank and executed the mortgage deed in favour of the bank in respect of the suit property along with his wife as the property stood in her name. As the appellant's husband was found guilty of criminal misappropriation to the extent of Rs. 25,000, the appellant voluntarily offered to execute Ex. B. 2 in order to save her husband from being proceeded against for criminal misappropriation by the first respondent. It is common ground that the appellant's husband was employed in a petrol bunk owned by the first respondent. According to the first respondent, a large sum of nearly Rs. 25,000 was found due and payable by the appellant's husband to her and in partial discharge of the said liability, the appellant joined her husband and executed Ex. B 2 sale deed out of her own accord. The charge of misrepresentation, coercion and fraud are false and are denied by the first respondent. It is further pointed out that nearly a year after Ex. B 2, sale and the execution of the promissory note marked as Ex. B 1, dated 20-7-1965 for the recovery of which the first respondent had instituted the other suit O. S. 144 of 1968 against the appellant and her husband, did the appellant give notice to him to which he gave suitable reply. Both the suit notice and the suit are at the instigation of the appellant's husband. It is immediately relevant to notice that the first respondent was the real owner but failed to put forward a defence on the assumption that the suit property belonged to the appellant contending that nevertheless the appellant's case of misappropriation, coercion and fraud are baseless. The second respondent, alienee from the first respondent, while adopting the written statement of the first respondent, resisted the suit on the ground that the appellant is a mere benamidar for her husband as she had no funds of he
