TMI Blog1991 (9) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Pt. Lakshmi Chand had died on February 10, 1934. D. C. Kaushish defendant No. I then became Karta of the Joint Hindu Undivided Family comprising of himself, his wife defendant No. 4, and his three sons, namely, Ajay Kaushish-defendant No. 2 and Uday Kaushish-defendant No. 3 and the plaintiff. It is the case of the plaintiff that defendant No. I as Karta of Hindu Undivided Family (for short the 'HOT') managed and possessed the HUF properties together with all acquisitions thereof and in the year 1958 a Cinema Building was constructed on the HUF plot which stood in the name of defendant No. I and by 1961 the Cinema Building was completed and business of exhibiting the films in the said Cinema commenced and certain other blocks known as 'Warehouse Block' and other constructions were also raised on the said plot in the year 1962 and there was some construction which preexisted on the said plot and plan of the said plot with its buildings has been filed along with the plaint. 4. It is further averred that in the year 1947 defendant No. I as Karta of HUF had brought into existence a private limited company under the name and style of M/s. Asian Art Printers (P) Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , gave the award to which no objections were filed and the award was got made a rule of the court. 8. So, according to the plaintiff, all the steps have been taken with the sole object of reducing the tax and other liabilities of the family and as a matter of fact, all along the HUF properties and businesses continued to be joint and no partition by metes and bounds or otherwise took place and as a matter of fact, the decree was not given effect to as it was never intended to be given effect to amongst the parties and had been procured only for the purposes of reducing the tax liabilities, and then the plaintiff has given details in paras 22 to 24 showing how different steps were taken with the sole object of reducing the income-tax, wealth-tax and property-tax liabilities of the HUF properties and businesses. It is not necessary to reproduce these details for the purpose of deciding the present applications. It is then averred by the plaintiff that all relevant parties knew and understood and believed that all the properties and assets and the businesses would continue to belong to HUF and parties continued to hold the said properties and carry on the said businesses as HUF and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partition of the properties amongst the HUF members solely for the purpose of obtaining tax benefits but in reality the properties and businesses remained joint of the family at all relevant times. 11. So, the plaintiff sought a decree for partition of the said assets, properties and businesses of the HUF for separating his share and for getting possession of his share and for rendition of accounts and for recovery of the amount which may be found due to him on rendition of accounts and by permanent injunction restraining the defendants from excluding and ousting the plaintiff from the use, occupation and enjoyment of the HUF properties and from participation in the businesses of the HUF and also restraining the defendants from raising loans and advances from third parties or creating any encumbrances, charges or liens on the said properties and restraining them from transferring, alienating, disposing or parting with possession any of those properties and assets and from raising any construction on plot Nos. 8601 to 8630 situated on Deshbandhu Gupta Road, New Delhi or from making any booking of space in the proposed multistoreyed building and receiving any advances from the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decree and that the HUF properties, assets and businesses continue to be joint at all relevant times and thus, the plaintiff has a right to seek partition of the same and the provisions of Sections 32 and 33 of the Arbitration Act are not applicable and the suit is within limitation having been instituted within three years of the accrual of cause of action to the plaintiff for filing the present suit seeking partition of the said properties. 15. The leaned counsel for the plaintiff has also contended that without framing issues the questions being raised by the defendants cannot be decided. He has argued that the question of limitation is always a mixed question of fact and law and unless and until the parties have led evidence, this question cannot be decided by this Court as preliminary point just on the basis of the averments made in the plaint. 16. It is true that in case from bare reading of the plaint and the admitted documents and the facts coming out in the statement of the plaintiff under Order X of the Code of Civil Procedure, the Court could come to the conclusion that the plaint does not disclose cause of action or the suit is barred by limitation or is not maint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper and all legal steps have been taken before the decree was obtained. As the award had been given by an arbitrator who was appointed by the Court in a suit, the award was not required to be registered compulsorily. (See Suit No. 316-A/72, Hari Shankar Bhargava v. Smt. Mohan Devi, decided on August 8, 1974*, by Avadh Behari, J). 21. The short questions which arise for decision are whether it can be said that the partition had in fact taken place or not without recording any evidence and whether the said decree was obtained only for the purposes of obtaining tax benefits? It is the case of the plaintiff that in fact, no partition of the properties took place and the properties always were treated as HUF properties by the parties and they intended that those properties would continue to remain HUF properties despite the said decree being obtained. It is not necessary to express any considered view whether the decree is a nullity or not on account of the allegations made by the plaintiff that it was in violation of the provisions of Order 32 of the Code of Civil Procedure as Court had not passed any speaking order showing that the partition is in the interest of minor. The pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Sm. 576 as follows: When the remedy is given on the ground of fraud, it is governed by this important principle that the right of the party defrauded is not affected by lapse of time, for generally speaking by anything done or omitted to be done so long as he remains, without any fault of his own, in ignorance of the fraud that has been committed. On facts the Supreme Court found that the appellant had been kept out of knowledge of the true character of the properties until the year 1927 and even after that the appellant had no knowledge of the true character of the properties or of ouster or adverse possession' of the other party. It was held that the cause of action for seeking partition of the HUF properties is said to be a perpetually recurring one . The Supreme Court held that the suit for partition was maintainable and was within time. 24. In the present case also, the averments made by the plaintiff are that defendant No. 1, his father, had collusively got filed the suit and had got the matter referred to the arbitrator who quickly gave the award showing partition of the properties which was got made a rule of the Court and it was all intended for obtaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the trustees appointed there under. With a part of the said amount, a site was purchased in Nagpur and a building was constructed thereon. 26. In October 1929, Rukhmabai filed a suit against Chandanlal for partition of the said property and obtained a decree against him on January, 1934. An appeal was filed which was dismissed. Chandanlal was beneficiary under the trust along with Rukhmabai. After his death, the local commissioner tried to effect partition of the property by metes and bounds but he was obstructed by the other family members living in the house and then a suit was filed for declaration that the trust deed executed by Govind Prasad was a sham and a bogus document. It was the case of the plaintiff that the relinquishment deeds executed earlier were part of a scheme of fraud conceived by the members of the family to defraud the creditors. The plea of Rukhmabai was that in fact, there had taken place separation in the HUF and Govind Prasad had his own business and from out of his self acquisition had created the trust. The points arising for consideration were as to whether the house in question was the property of the joint family or the same was built up by Govind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court on examining the evidence held that there was no separation of the joint family. The evidentiary value of these documents must be rejected on the ground that there were further attempts on the part of the family to keep up the appearance consistent with the alleged partition. In para 29 of the judgment the Supreme Court summarised the position and held that there was no separation of the members of the family. All the members of the family continued to be joint and the family was doing business in different places and they had extensive properties and a fairly large income although they were heavily indebted and that the family was involved in debts in Ramasahai's life time and even after his death the position continued to be the same and various attempts were made to salvage the properties of the family and to keep both the moveable and immoveable properties not mortgaged from the reach of the creditors and the relinquishment deeds, innumerable mortgages, sale deeds and the trust deed were all executed as parts of the said scheme. So , it was held that the suit property was joint family property and the document of trust was held to be colourable and fictitious documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which it was held that it is now well established that an agreement between all the coparceners is not essential to the disruption of the joint family status, but a definite and unambiguous indication of the intention by one member to separate himself from the family and to enjoy his share in severalty will amount in law to a division of status. It is immaterial in such a case whether the other members assent or not. It was held that if, however, the expression of intention is a mere pretence or a sham, there is in the eye of law no separation of the joint family status. In the cited case, a partition deed was executed on April 28, 1944, between members of the family. A plea was taken that the same was sham transaction and was not intended to be effective. After recording evidence the trial Court reached the conclusion that the partition deed was not a genuine one and it was effected for an ulterior purpose in order to defeat the rights of the widows in the joint family. That finding was affirmed in appeal by the High Court. It was sought to be urged before the Supreme Court that even though the partition deed was bogus there was in law severance of joint family status and the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... du family properties. 31. Counsel for the plaintiff also cited McDowell and Co. Ltd. v. Commercial Tax Officer, and Sunil Siddharthbhai v. Commr. of Income-tax, Ahmedabad, , wherein principles have been laid down that the tax authorities car go behind the documents to determine the true legal relations between the parties for imposing the proper taxes in accordance with law. 32. It is not for this Court to decide as to what should have been the incidence of tax on the properties to be determined by the revenue authorities. Suffice it to say that averments made in the plaint make it clear that the alleged award and the decree and other transactions detailed out in the plaint were under a scheme envisaged by defendant No. I for consumption of the revenue authorities to bring down the incidence of tax and other levies and the said purpose was achieved but the real intention of the members of the joint Hindu family was to treat these documents as sham, bogus and nominal and to continue to be joint in businesses and keep the properties also joint as before and in fact, the properties continued to be joint properties, so also the businesses. 33. The learned counsel for the defen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the decree were fictitious, sham, make believe and nominal documents and were brought into existence as a subterfuge designed to defraud the tax/revenue authorities and were not intended to be acted upon and thus, the same were not at all binding documents and straightway seek relief of partition as his case is that joint Hindu family properties and the businesses continued to be joint at all relevant times. In the alternative he has contended that the plaintiff could claim a relief for declaration which relief has been sought by the plaintiff by amending the plaint. 35. Counsel for the plaintiff has cited Petherpermal Chetty v. Muniandy Servai, (1908) 35 Cal 551 (PC). Facts of this case, in brief, are that in order to defeat the claim of an equitable mortgage of certain property, the predecessor in title of the respondent, and co-member with him of a joint Hindu family, executed on June 11, 1895, what purported to be a deed of sale of the property in favor of the predecessor in title of the appellant. The question which came up for decision was whether the said deed was bogus transaction or not? It was held by the Privy Council that there was nothing to prevent the plaintif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 118, Syed Rasool v. Mohammad Moulana, ]. 40. Then reliance was placed by counsel for the plaintiff on Vemareddi Ramagaghava Reddy v. Konduru Seshu Reddy, . In this judgment the Supreme Court held that Section 42 of the Specific Relief Act is not exhaustive of the cases in which a declaratory decree may be made and the Courts have power to grant such a decree independently of the requirements of the section. In the said suit, a declaration was sought that compromise decree was not binding on the deity. It was held that such a suit is maintainable. Same principle was reiterated by the Supreme Court in M/s. Supreme General Films Exchange Ltd. v. His Highness Maharaja Sir Brijnath Singhji Deo of Maihar, . 41. Counsel for the plaintiff also strongly placed reliance on Pandit Sri Chand v. Pandit Om Prakash, . It is a short judgment. In this case a suit for partition was filed. The question which arose for decision was whether the -plaintiff, in fact, had relinquished his share by two deeds of relinquishment or not? The trial Court held that the plaintiff had executed the relinquishment deeds. The suit was dismissed. The High Court, however, set aside the said judgment and passed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view the averments made in the plaint, it cannot be said that the suit is on the face of it barred by time. However, the final decision on the point of limitation would be given after framing issues and recording evidence. 46. One of the points raised was that the present suit is barred by provisions of Sections 32 and 33 of the Arbitration Act, 1940. In the present case, there was no question of the award being challenged by filing any objections or filing any petition to challenge the agreement for reference. The case of the plaintiff is that the award and the decree were bogus and sham documents and have been brought into existence only for the consumption of the revenue authorities to reduce the incidence of tax and were not intended to be, in fact, acted upon by the parties. If that is so, it is not understood how the suit can be deemed to be barred by virtue of provisions of Sections 32 and 33 of the Arbitration Act. 47. Counsel for the plaintiff has cited Kailashpati Singhania v. Ram Gopal Gupta, . In the said case a consent decree based on an award was passed which was declaratory in nature and the rights and liabilities of the parties under the same were only conti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 47 of the Code of Civil Procedure whenever and wherever it is sought to be enforced against a party. 51. In Sukumar Ghosh v. Tulsi Charan Ghosh, , it was held that though Section 32 of the Arbitration Act has barred any challenge to the award yet if there exists an independent ground to challenge the decree passed on such an award such a challenge is not barred under Section 32. 52. Similarly in the present case, the case of the plaintiff is that the said award and the decree were bogus and sham one and have been brought into existence for a specific purpose and were never intended to be acted upon. So, the challenge to the award and the decree in the present case is independent of the contents of the award and the decree. So, a separate suit is maintainable to enforce the substantive rights of the plaintiff. Plaintiff could ignore the bogus and the sham award and the decree while seeking the substantive relief. So, the question of the suit being barred under the provisions of Sections 32 and 33 of the Arbitration Act does not arise. 53. The Division Bench judgment given in Sudhindra Coomar v. Monmohini Coomar, 1983 Tax LR 730 (Cal) appears to support the case of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere never intended to be given effect to and were brought into existence fraudulently to defraud the revenue authorities and thus are void. 56. In the written arguments dated January 7, 199 1, filed on behalf of defendant No. 1, emphasis is only to show that the plaintiff minor was duly represented by next friend in the partition suit brought in 1961 and the plaint disclosed the cause of action for filing the suit as allegations were made regarding the Karta having indulged in wasteful acts in respect of the joint properties and a petition under Section 21 of the Arbitration Act was duly filed and the Court mde reference to the arbitrator and the arbitrator gave the award to which no objections were filed and the award was made a rule of the Court and even if the Court in so many words had not recorded its satisfaction that the suit was brought in the interest of the minor even then impliedly it has to be held that the Court did examine the question before proceeding in the matter. 57. The issues raised in the plaint are not even alluded to in these written arguments which have been dealt - with by me above in detail. The question is not whether proper procedure has been foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is bogus, sham and a nominal paper decree, the same can be avoided by the person affected by it by filing a suit claiming the substantive relief and a proper plea could be taken in the suit that the decree is void. This is also one of the modes of avoiding the decree as contemplated in the said observations of the Supreme Court. 61. In the written arguments a quotation has been given from an unreported judgment in CA No. 162/62, Uttam Singh Duggal and Co. v. Union of India, decided on October 11, 1962*, to the following effect: After an award has been pronounced, the rights and liabilities of the parties in respect of their claims can be determined only on the basis of the award and after an award is pronounced, no action can be started on the original claim which had been the subject matter of the reference. These observations must have been made by the Supreme Court in keeping in view the peculiar fact appearing in that case. The judgment has not been made available to this Court to analyze the same. So, it cannot be held that the Supreme Court has pronounced that even if the award and the decree are void even then the suit on the basis of the substantive right cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a meaningful and no formal reading of the plaint and see whether the plaint is vexatious and meritless and could exercise the power under Order VII, Rule I I of the Code of Civil Procedure for rejecting the plaint and the Court can also examine the party under Order X of the Code of Civil Procedure so that bogus litigation can be shot down at the earliest stage. I do not think that this judgment applies to the facts of the present case in view of the averments made in the plaint which cannot be brushed aside on the short ground that the defendants are of the opinion that in fact, the award and the decree had in fact been given effect to between the parties because that would be begging the question. It could be decided only after recording evidence as to whether actually parties had effected the partition on the basis of the said award and the decree. 67. In the written arguments reliance is also placed in Patasibai v. Ratanlal, . In this judgment, the Supreme Court has held that even after issuance of summons the Court is not debarred from examining whether the trial should proceed when in fact, no friable issue is shown to arise. I do not understand how this judgment helps th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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