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1969 Supreme(Mad) 369

Madras High Court
GOKULAKRISHNAN
S.Rathnam Naidu - Appellant
Versus
Kanni Ammal - Respondent
Decided On : 10/03/1969

Advocates:
N. R. Raghawachariar, for Appellants; P. C. Parthasarathi Iyengar, for Respondents.

In cases involving confidential relationships, the burden of proof lies on the donee to demonstrate that a gift was made out of the donor's free will and volition, without undue influence.

Headnote:

UNDUE INFLUENCE - SETTLEMENT DEED - BURDEN OF PROOF - PRESUMPTION - INDEPENDENT ADVICE - VOIDABLE TRANSACTION - SECTION 68 OF THE EVIDENCE ACT - FACTUAL MATRIX.

Fact of the Case:

Ammayee Ammal, the widow of Kishtappa Naidu, executed a settlement deed in favor of the first defendant, transferring ownership of various properties. After Ammayee Ammal's death, the first defendant sold the properties to the second defendant. The plaintiffs, being the children of Ammayee Ammal's husband's sisters, filed a suit seeking cancellation of the settlement deed and possession of the properties, alleging fraud and undue influence by the first defendant.

Finding of the Court:

The lower appellate court held that the first defendant failed to discharge the burden of proving that the settlement deed was executed by Ammayee Ammal out of her free will and volition. The court found that the settlement deed was void due to undue influence exercised by the first defendant. The court also held that the second defendant was not a bona fide purchaser for value.

Issues: 1. Whether the settlement deed was brought about by fraud and undue influence, rendering it void. 2. Whether the second defendant is a bona fide purchaser for value. 3. Whether the plaintiffs and defendants 3 to 6 are the reversioners to the estate of Ammayee Ammal and entitled to possession.

Ratio Decidendi: 1. The court applied the principle that where a confidential relationship exists between the donor and donee, the burden lies on the donee to show that the gift was the result of the free exercise of the donor's independent will. 2. The court relied on case law establishing that a person standing in a fiduciary relation to another cannot retain a gift made to them by that other unless they can prove that the donor had independent advice or that the fiduciary relation had ceased. 3. The court found that the first defendant failed to prove that the settlement deed was executed by Ammayee Ammal out of her free will and volition, and that the circumstances surrounding the execution of the deed raised a presumption of undue influence.

Final Decision: The second appeal was dismissed, upholding the lower appellate court's judgment and decree. The settlement deed was declared void, and the plaintiffs and defendants 3 to 6 were held entitled to possession of the suit properties.

Judgement

JUDGMENT:- Defendants 1 and 2 are the appellants in this court. Plaintiffs 1, 2, 3, 5, 6, 7, 8 and defendants 3, 4, 5. 6 and 7 are the respondents herein. The plaintiffs and defendants 3 to 6 are the children of the sisters of Kishtappa Naidu. The said Kishtappa is the husband of Ammayee Ammal. After the death of Kishtappa, Ammayee Ammal has executed a settlement deed in favour of the first defendant in the suit Ammayee Ammal died on 12-1-1959. The second defendant in the suit is the transferee for valuable consideration of the properties settled upon the first defendant by late Ammayee Ammal.

2. The plaintiffs filed the suit for cancellation of the settlement deed dated 12-11-1958 executed by Ammayee Ammal in favour of the first defendant and for possession of the suit properties on the ground of fraud and undue influence by the first defendant.

3. The case of the plaintiffs is that the plaint schedule properties consisting of nine items of nanja and punia lands and item 10, house and site, in Arunparuthy village are originally said to belong to one Kishtappa Naidu. After his death, his only son, Perumal Naidu, also passed away, leaving one Ammayye Ammal his widowed mother, who was absolutely entitled to the properties. Plaintiff's 1 to 8 and defendants 3 to 6 are Ammayee Ammal's husband's sister's children. The seventh defendant is the cousin brother of Ammayee Ammal's husband, with whom and with whose help Ammayee Ammal was living. The first defendant in the absence of the seventh defendant from the village, managed to take away Ammayee Ammal to Madras, where he immediately took a settlement deed, Ex.B-1, fraudulently using his undue influence, and taking advantage of her illness and old age. There was no delivery of possession in accordance with the settlement deed.

4. The first defendant resisted the suit on the ground that Ammayee Ammal and the seventh defendant were not on talking terms, that he was assisting her in the management of the properties that he was looking after her, that at her instance he came to the village and took her to Madras, where she executed the settlement deed Ex.B-1 in his favour, out of free will and volition, that he had sold the properties to the second defendant for good and valuable consideration under Ex.B-8, that he is an unnecessary party to this suit, that he had performed the funeral of Ammayee Ammal, and that there was no fraud or undue influence in the execution of the settlement deed. The second defendant pleads that he is a bona fide purchaser for value from the first defendant and adopted the allegations of the first defendant in other particulars.

5. The defendants 3 to 6 in their separate written statements contended that they came to know of the averments later and that they are not liable for costs. They prayed that a decree should be passed in their favour also.

6. The seventh defendant though appeared in person, did not file any written statement and allowed the suit to be proceeded ex parte against him.

7. The learned District Munsif upholding the contentions of the defendants, dismissed the plaintiffs' suit with costs. On appeal, the learned Subordinate Judge, Vellore, took up for consideration as to (1) whether the settlement deed was brought about by fraud and undue influence and as such whether the settlement deed is liable to be set aside; (2) whether the second defendant is a bona fide purchaser for value and (3) as to whether the plaintiff's and defendants 3 to 6 are the reversioners to the estate of Ammayee Ammal and as such, whether they are entitled to possession.

8. After elaborately discussing both documentary and oral evidence on record, the learned Subordinate Judge came to the conclusion that the first defendant has not discharged his burden in proving that the settlement deed executed by Ammayee Ammal was out of her free will and volition and as such the settlement deed Ex.B-1dated 12-11-1958 is void inasmuch as it has to be construed that the same has bee



















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