Subhas chandra Das Mushib V Ganga Prasad Das Mushib AIR 1967 SC 878

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G.K. MITTER, J. – This is an appeal from a judgment and decree of the High Court of Calcutta on a certificate granted by it reversing a decision of the Subordinate Judge of Bankura dismissing the plaintiff’s suit for declaring that a deed of settlement (Nirupan Patra) executed by the plaintiff’s father and the plaintiff’s sister in favour of the plaintiff’s brother’s son registered on July 22, 1944 in respect of properties situated in village Lokepur was fraudulent, collusive and invalid and for cancellation of the said document. The Judges of the High Court proceeded on the basis that in the circumstances of the case and in view of the relationship of the parties the trial court should have made a presumption that the donee had influence over the donor and should have asked for proof from the respondents before the High Court that the gift was the spontaneous act of the donor acting under circumstances which enabled him to exercise an independent will and which would justify the court in holding that the gift was the result of a free exercise of the donor’s will. The High Court went on to presume from the great age of the donor that his intelligence or understanding must have deteriorated with advancing years and consequently it was for the court to presume that he was under the influence of his younger son at the date of the gift. It was contended before us by the learned Additional Solicitor-General appearing for the appellant that the judgment of the High Court had proceeded on an entirely erroneous basis and that there was no sufficient pleading of undue influence nor was there any evidence adduced at the trial to make out a case of undue influence and in the vital issue raised before the learned Subordinate Judge the expression “undue influence” was not even used.

(2) The main facts which have come out in the evidence are as follows. The plaintiff’s father, Prasanna Kumar, owned certain lands in two villages, namely, Parbatipur and Lokepur, holding an eight annas share in each. The exact valuation of the properties is not known, but it would not be wrong to assume that the Lokepur properties, the subject matter of the suit, were more valuable. Prasanna Kumar died in January or February, 1948 when he was about 90 years of age. He had two sons, namely, Ganga Prasad, the plaintiff, and Balaram, the second defendant in the suit, besides a daughter Swarnalata and an only grandson Subhash Chandra, who was the first defendant in the suit. Ganga Prasad had no son. He had served in the Medical School at Bankura from 1932 to 1934. Thereafter he worked as a contractor for one year. From November 1944 to 1948 he served in Searsole Raj Estate. The family consisted of Prasanna Kumar and his wife, their two sons and their wives, besides the grandson Subhas Chandra and Prasanna’s daughter Swarnalata who became a widow in her childhood and was residing with her parents. It appears that Balaram always lived with his father and was never employed elsewhere. According to the plaintiff’s own evidence he was looking after the property of his father so long as he was at Bankura. The Lokepur properties were put to auction in execution of a decree for arrears of rent and were purchased by Prasanna benami in the name of Swarnalata. The deed of gift shows that the transaction was entered into out of natural love and affection of the donor for the donee and for the respect and reverence which the grandson bore to the grandfather. There is no direct evidence as to whether the plaintiff was present in Bankura at the time when this deed was executed and registered. It is the plaintiff’s case that he was not. The suit was filed in 1952 more than eight years after the date of the transaction and more than four years after the death of Prasanna. There is a considerable body of evidence that in between 1944 and 1948 a number of settlements of different plots of land in village Lokepur had been effected by Balaram acting as the natural guardian of his son Subhas Chandra and in all of them the Nirupan Patra had been recited and in each case Prasanna had signed as an attesting witness. These settlements were made jointly with the other co-sharers of Prasanna. In 1947 the Municipal Commissioners of Bankura filed a suit against Prasanna for recovery of arrears of taxes. Prasanna filed his written statement in that suit stating that he had no interest in the property. After Prasanna’s death the Municipal Commissioners did not serve the plaintiff with a writ of summons in the suit but obtained a decree only against Balaram ex parte. The plaintiff attended the funeral ceremony of his father in 1948, but he alleges that he never came to know of any of the settlements of land in Lokepur after 1944. He admitted never having paid any rent to the superior landlords and stated that he came to know about the deed of settlement some two years before the institution of the suit from his cousins none of whom were called as witnesses.

(3) We may now proceed to consider what are the essential ingredients of undue influence and how a plaintiff who seeks relief on this ground should proceed to prove his case and when the defendant is called upon to show that the contract or gift was not induced by undue influence. The instant case is one of gift but it is well settled that the law as to undue influence is the same in the case of a gift inter vivos as in the case of a contract.

(4) Under S. 16(1) of the Indian Contract Act a contract is said to be induced by undue influence where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other. This shows that the court trying a case of undue influence must consider two things to start with, namely, (1) are the relations between the donor and the donee such that the donee is in a position to dominate the will of the donor, and (2) has the donee used that position to obtain an unfair advantage over the donor?

(5) Sub-section (2) of the section is illustrative as to when a person is to be considered to be in a position to dominate the will of another. These are inter alia (a) where the donee holds a real or apparent authority over the donor or where he stands in a fiduciary relation to the donor, or (b) where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress.

(6) Sub-section (3) of the section throws the burden of proving that a contract was not induced by undue influence on the person benefiting by it when two factors are found against him, namely that he is in a position to dominate the will of another and the transaction appears on the face of it or on the evidence induced to be unconscionable.

(7) The three stages for consideration of a case of undue influence were expounded in the case of Raghunath Prasad v. Sarju Prasad (AIR 1924 PC 60) in the following words:

“In the first place the relations between the parties to each other must be such that one is in a position to dominate the will of the other. Once that position is substantiated the second stage has been reached – namely, the issue whether the contract has been induced by undue influence. Upon the determination of this issue a third point emerges, which is that of the onus probandi. If the transaction appears to be unconscionable, then the burden of proving that the contract was not induced by undue influence is to lie upon the person who was in a position to dominate the will of the other. Error is almost sure to arise if the order of these propositions be changed. The unconscionableness of the bargain is not the first thing to be considered. The first thing to be considered is the relations of these parties. Were they such as to put one in a position to dominate the will of the other?”

(8) It must also be noted that merely because the parties were nearly related to each other no presumption of undue influence can arise. As was pointed out by the Judicial Committee of the Privy Council in Poosathurai v. Kappanna Chettiar (AIR 1920 PC 65, 66): “It is mistake (of which there are a good many traces in these proceedings) to treat undue influence as having been established by a proof of the relations of the parties having been such that the one naturally relied upon the other for advice, and the other was in a position to dominate the will of the first in giving it. Up to that point “influence” alone has been made out. Such influence may be used wisely, judiciously and helpfully. But whether by the law of India or the law of England more than mere influence must be proved so as to render influence, in the language of law, “undue.”

(9) The law in India as to undue influence as embodied in S. 16 of the Contract Act is based on the English Common Law as noted in the judgments of this Court in Ladli Prasad Jaiswal v. Karnal Distillery Co. Ltd. (AIR 1963 SC 1279, 1290). According to Halsbury’s Laws of England, Third Edition, Vol. 17, p. 673, Art. 1298, “where there is no relationship shown to exist from which undue influence is presumed, that influence must be proved.” Article 1299, p. 674 of the same volume shows that “there is no presumption of imposition or fraud merely because a donor is old or of weak character.” The nature of relations from the existence of which undue influence is presumed is considered at pages 678 to 681 of the same volume. The learned author notes at p. 679 that “there is no presumption of undue influence in the case of a gift to a son, grandson, or son-in-law, although made during the donor’s illness and a few days before his death.” Generally speaking the relation of solicitor and client, trustee and cestui que trust, spiritual adviser and devotee, medical attendant and patient, parent and child are those in which such a presumption arises. Section 16(2) of the Contract Act shows that such a situation can arise wherever the donee stands in a fiduciary relationship to the donor or holds a real or apparent authority over him.

(18) It will be noted that the High Court did not come to a finding that Balaram was in a position to dominate the will of his father (Subhas his son being only about 14 years of age at the date of the deed of gift). Nor did the High Court find that the transaction was an unconscionable one. The learned Judges made presumptions which were neither warranted by law nor supported by facts. Indeed, it appears to us that the learned Judges reached the third stage referred to in the case of AIR 1924 PC 60 completely overlooking the first two stages.

(25) There was practically no evidence about the domination of Balaram over Prasanna at the time of the execution of the deed of gift or even thereafter. Prasanna, according to the evidence, seems to have been a person who was taking an active interest in the management of the property even shortly before his death. The circumstances obtaining in the family in the year 1944 do not show that the impugned transaction was of such a nature as to shock one’s conscience. The plaintiff had no son. For a good many years before 1944 he had been making a living elsewhere. According to his own admission in cross-examination, he owned a jungle in his own right (the area being given by the defendant as 80 bighas) and was therefore possessed of separate property in which his brother or nephew had no interest. There were other joint properties in the village of Parbatipur which were not the subject-matter of the deed of gift. It may be that they were not as valuable as the Lokepur properties. The circumstance that a grandfather made a gift of a portion of his properties to his only grandson a few years before his death is not on the face of it an unconscionable transaction. Moreover, we cannot lose sight of the fact that if Balaram was exercising undue influence over his father he did not go to the length of having the deed of gift in his own name. In this he was certainly acting very unwisely because it was not out of the range of possibility that Subhas after attaining majority might have nothing to do with his father.

(26) Once we come to the conclusion that the presumptions made by the learned Judges of the High Court were not warranted by law and that they did not take a view of the evidence adduced at the trial different from that of the Subordinate Judge on the facts of this case we must hold that the whole approach of the learned Judges of the High Court was wrong and as such their decision cannot be upheld.

(27) The learned Additional Solicitor General also wanted to argue that the suit was defective because the plaintiff was out of possession and had not asked for a decree for possession in his plaint as he was bound to do if he was asking for a declaration of title to the property. It is to be noted that we did not think it necessary to go into this question and did not allow him to place the evidence on this point before us as we were of the view that the case of undue influence had not been sufficiently alleged either on the pleadings or substantiated on the evidence adduced.

(28) The result is that the appeal is allowed, the judgment and decree of the High Court set aside and that of the trial Court restored.