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Sanjay Kaushish vs D.C. Kaushish And Others

1991 (9) TMI 358 - Delhi High Court

I.As. 3888 and 5800 of 1986 in Suit No. 1176 of 1986 - Dated:- 10-9-1991 - P Bahri, J. For Appellant: L.R. Gupta and Amit S. Chandha, Sr. Advs For Respondents: Kapil Sibal, N.S. Vashisht, Harish Salve, Ms. Anuradha Dutt and Akshaya Babu, Sr. Advs. ORDER 1. Vide this Order I shall decide the aforesaid two applications moved by the defendants seeking rejection of the plaint under Order VII Rule I I of the Code of Civil Procedure. 2. Elaborate oral arguments have been addressed by counsel for the p .....

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A to the plaint. Pratap Chand is stated to have died issueless in 1916. 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 pos .....

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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. with the capital and funds of the HUF and in 1956 only defendant No. 4 and defendant No. I were the directors of the said company and prior to it one close friend of defendant No. I Dr. Surendra Singh was taken as Director having be .....

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t control and guidance of defendant No. 1 and the income went up to ₹ 4,00,000/- per annum. It is pleaded that this huge income attracted a levy of huge income-tax, wealth-tax and other taxes including house-tax and other charges and cases and in order to avoid and/or reduce the incidence of tax liabilities etc. which were then leviable and being levied on the HUF, defendant No. I devised a scheme of effecting a colourable and sham partition of the assets and properties including businesse .....

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es and businesses and had committed numerous acts of waste and thus, it was not in the interest of the minor plaintiff to remain joint and a relief of partition of the properties and businesses was sought. 7. It is averred that as per pre-planned scheme, collusive written statements were filed by the defendants and the moveable properties and assets of HUF were shown by defendant No. I which were required to be partitioned and thereafter a petition under Section 21 of the Arbitration Act was fil .....

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tition 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 .....

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tiff and ultimately to exclude the other members of the family, had started going in the direction of gaining complete control and management of the family company M/s. Asian Art Printers(p) Ltd. with a mala fide intention to appropriate the earnings of Sheila Theatre, other assets and businesses of the family to himself. With this mala fide intention, defendant No. 2,' being the eldest son having a great influence on defendant No. I and as plaintiff had contracted a love marriage contrary t .....

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facts in detail have been given as to how the defendants have been making efforts to exclude the plaintiff from HUF properties and businesses pleading that fake and fictitious resolutions have been passed changing the shareholding of the said company with a view to reduce the plaintiff to a minority in the said company. The plaintiff has also pleaded that as he had a lot of regard for his father defendant No. I who had brought him up and had given him high education and had also sent him abroad .....

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hat the case of the plaintiff is that the HUF continues to exist and the properties of the HUF and business of the HUF remained intact and were always treated as such by the parties and only paper, bogus and sham decree had been obtained showing the 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 .....

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s 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 prospective buyers or from, transferring any portions of .....

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iff to seek any relief regarding the void decree, the plaintiff prays that the said decree be declared void, sham, paper transaction and bogus and thus, was not binding on the parties. Later on, the plaintiff again sought amendment of the plaint with a view to incorporate certain admissions made by defendant No.1 in various proceedings showing that the properties and businesses were always held out to be HUF assets even subsequent to the passing of the decree. 13. The learned counsel for the def .....

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es and businesses has already taken place by virtue of the award which has been made a rule of the Court the suit seeking the same relief of partition is not maintainable. It has been also argued that the suit, is also barred by limitation inasmuch as it has been filed in 1986 while the decree was passed in 1963. 14. The learned counsel for the plaintiff, on the other hand, has contended that keeping in view the averments made in the plaint, it is quite clear that the plaint discloses cause of a .....

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ame 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 .....

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d by limitation or is not maintainable, the Court can decide the said points even without recording any evidence. [See Azhar Hussain v. Rajiv Gandhi, and Hardwari Lal v. Kanwal Singh, ]. 17. In order to elucidate the facts the plaintiff was examined under Order X of the Code of Civil Procedure and he stated that only in 1985 he became aware (of) the partition decree based on the award and he had never himself appeared before the income-tax authorities in any matters and his father was looking af .....

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were handling the income-tax and wealth-tax matters of the family and that his father was handling all the matters up to 1985 and since 1985 he had not filed any returns. 18. So, the plea taken by the plaintiff in the suit as well as in the facts disclosed by him while he was examined under Order X of the Code of Civil Procedure is that his fatherdefendant No. I had been handling all the affairs and he had only signed blank documents and some documents without reading them as he had full faith i .....

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ations that Karta had committed acts of wastage stood proved or not. He has also contended that the award being not registered which was required to be compulsorily registered, thus, the decree passed on the basis of such an award is nullity. As prayed by learned counsel for the defendants, I had also called the file of the suit in which the decree was passed. 20. It is evident that the award is scribed on the stamp paper and all legal steps have been taken before the decree was obtained. As the .....

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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 P .....

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y. As such averments have been made in the plaint, the question is whether it can be said that the suit for partition is not maintainable because the decree has been already obtained in that respect. 23. Counsel for the plaintiff has cited Syed Shah Gulam Ghouse Mohiuddin v. Syed Shah Ahmad Mohiuddin Kamisul Gadri (dead) by his L.Rs, . Facts of this case, in brief, are that Shah Abdul Rahim died leaving four sons and two daughters and had left behind large moveable and immoveable properties. Son .....

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nt was a minor at the time the matter was referred for arbitration and the award was given and made a rule of the Court. The award was challenged in the suit by the appellant on the ground that no lawful guardian on behalf of the appellant was appointed to protect and represent his rights and interests and that award was also bad as certain properties were not of the type as indicated in the award. The trial Court had given a finding that the award and the decree had been obtained by fraud. It w .....

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4 De GJ and 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 unt .....

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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 the tax benefits and , the plaintiff was not aware of those facts till 1984 or so and the plaintiff had been signing various documents or papers at the behest of his father without knowing their contents and thus, he discovered the actual state of affairs when it was tried to o .....

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se of action and how the suit can be deemed to be barred on the basis of the decree already obtained which the plaintiff terms as sham, bogus one and mere paper transaction brought into existence to have the tax benefits only. 25. Counsel for the plaintiff next has placed reliance on Mst. Rukmabai v. Lala Laxminarayan, . It is an important decision which has much bearing on the issues arising in this suit. The facts of the case, in brief, were that one Ramasahai and his eight sons and one cousin .....

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at deed it was recited that the brother had become separated in 1898 by a deed of relinquishment of that date and as the said document was not registered, they were executing a fresh one confirming the earlier arrangement. Another brother of the family Govind Prasad executed a trust deed in favor of his nephew and his niece Rukhmabai, both of whom were minors at the relevant time. In that deed he asserted that he had become divided from his brothers under the aforesaid two deeds of relinquishmen .....

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h 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 Rukhma .....

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a Joint Hindu Family by defendant of shares which is technically called "division in status", or an actual division among them by allotment of specific property to each one of them which is described as "division by metes and bounds". It was observed that a member need not receive any share in the joint estate but may renounce his interest therein; his renunciation merely extinguishes his interest in the estate but does not affect the status of the remaining members vis-a-vi .....

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It was held that there is no presumption that any property, whether moveable or immoveable, held by a member of a joint Hindu family, is joint family property and the burden lies upon the person who asserts that a particular property is joint family property to establish that fact. It was laid down that if it is proved that there was sufficient joint family nucleus from and out of which the said property could have been acquired, the burden shifts to the members of the family setting up the clai .....

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ded to be a formal documents affecting the division between the parties. In the said case, evidence was also led that Govind Prasad had executed Wills which showed that he was treating some property as self acquisitions but the Supreme 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 .....

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ous 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 document which could not affect the said joint property. This judgment w .....

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period of limitation to be counted from the date the right to sue accrues and the right to sue was described as accruing only when the right is asserted and the same is controverter and there must be some unequivocal threat to infringe with the right by the opposite party against whom the suit is instituted. In the said case it was held that the right to sue accrued only when the Commissioner in execution of the decree visited the property on February 13, 1937, for effecting the partition by met .....

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om the arbitrator and getting it made a rule of the Court was only for achieving the said purpose and the real intention of the members of the joint Hindu family was to continue to keep the properties and the businesses joint and the said award and the decree were all collusive, sham and nominal one and thus, were void. I have not been able to understand any difference between the facts which were being considered by the Supreme Court in the aforesaid case and the facts of the present case, exce .....

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nite 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 .....

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oint family status and the family could not continue to be joint after execution of the said partition deed. The Supreme Court' held that the expression of intention in the sham document was a mere pretence and in eye of law there was no separation of the joint family status. 29. In the present case also, it is urged by the learned counsel for the plaintiff that the various steps taken for showing partition of the properties and by transferring the business Shiela Theatre to a company of the .....

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re was no expression of the intention to have separation from the joint family and thus, the joint family status continued to be in existence till the filing of the present suit. 30. There are a number of judgments cited by the learned counsel for the plaintiff where the documents were found to be sham documents and it was held that undivided status of the parties continued to remain in existence and properties remained joint. (See Merla Ramanna v. Chelikani Jagannadha Rao, , Pandit Sri Chand v. .....

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s filed challenging the said attachment on the plea that a partition of the joint Hindu family properties had already taken place and thus, the properties which have been attached had come to the share of the plaintiff and were liable to be released from attachment. The suit was dismissed with the finding that the partition deed was a sham and a bogus transaction while the properties continued to be treated as joint Hindu family properties. 31. Counsel for the plaintiff also cited McDowell and C .....

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int 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 fa .....

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award and the decree and the other transactions were mere bogus and paper transactions. It is to be remembered that the plaintiff has taken up the plea in the plaint that he had been signing the documents when they *ere blank and at the behest of his father and such a plea cannot be brushed aside on mere inference that plaintiff after becoming major and after receiving high education would not have signed the documents blank without knowing their contents. It is also argued on behalf of the defe .....

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or whether, in fact, the parties effected the partition of the joint Hindu family properties and businesses? That question cannot be decided unless and until necessary issues are framed and parties are given an opportunity to lead evidence. For deciding whether the plaint discloses cause of action or not, the Court has to only see the averments in the plaint and the accompanying documents relied upon in the plaint and the facts elicited from the plaintiff by examining him under Order X of the Co .....

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said award 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 reli .....

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essor 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 plaintiff from repudiating the said document as being bogus and recovering possession of the property. It was also laid down that the deed being bogus it was unnecessary for the plaintiff to have it set aside as a preliminary to his obtaining possession of the property. It was held that Article 91 o .....

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merely ancillary to the granting of such a relief. 37. In Fariduddin Alimad v. Murtaza Ali, Khan, AIR 1936 Oudh 67, -it was held that a suit for a mere declaration that a decree is absolutely illegal and void on certain grounds and is not binding on the plaintiffs is maintainable without any prayer for further relief. 38. In Jamilennessa Khatun v. Ijjatennessa Khatun, , it was laid down that Section 42 of the Specific Relief Act does not bar.a declaratory suit declaring the previous decree in a .....

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ncellation of the document. 39. Reference may be also made to Kalu Ram v. Babu Lal, , where a Full Bench of the said Court also held that a declaration seeking to avoid a mortgage deed on the ground that it was fictitious and a compromise on the ground of fraud and a decree on the ground of negligence and collusion of the guardian, is maintainable without seeking any further relief of cancellation of the said documents and the decree. [See also B. Dallu Singh v. B. Chhakan Singh, , Khata Chinna .....

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ction. 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 a .....

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the plaintiff need not seek any-declaration for avoiding the void award and decree. 43. Be that as it may, in my view, the well settled principle of law is that if a particular document or decree is void the person affected by the said document or decree can very well ignore the same and file a suit seeking substantive relief which may available to him without seeking any declaration that the said decree or document is void or any consequential relief of cancellation of the same. 44. The next q .....

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ling the suit for partition starts from the date the right to sue accrues. The right to sue could accrue when the said right is threatened by the opposite side. The residuary Article 113 of the Limitation Act would apply and in the present case, according to the plaintiff, the said right to sue accrued to him when he was tried to be ousted from the joint Hindu family businesses and properties which occurred in 1985 and the suit filed in the year 1986 is within time. The final decision on the poi .....

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nna Jami Venkatappadu, , Dalim Kumar Sam v. Sint. Nandarani Dassi, , Asaram v. Ludheshwar, AIR 1938 Nagpur 335 (FB) and Mst. Aisha Begam v. Mst.Kundan Jan, . 45. So, keeping in 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 .....

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ood 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 contingent, a suit was brought for enforcement of certain claims which have accrued subsequent to the passing of the decree, it was held .....

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y properties and businesses because, according to the plaintiff, as averred in the plaint the parties never intended to effect any disruption in the status of the joint Hindu family or to give effect to any partition of the joint Hindu family properties and businesses as was laid down in the award and the decree and the parties continued to have the joint Hindu family properties and businesses up to till 1985 when the threat was held out for giving effect to the award and the decree and thereaft .....

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rned counsel for the plaintiff to Vineet Kumar v. Smt. Bhagwandei, . It was held in this judgment that in terms Sections 32 and 33 of the Arbitration Act do not apply where the challenge is to the decree and not to the award. In the said case, the decree was sought to be attacked on the ground of fraud in the proceedings. It was held that a separate suit was maintainable to challenge such a decree. 50. In Ved Parkash v. Ram Narain Goel, , it was held that after an award of an Arbitrator has been .....

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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. .....

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or partition was brought by the plaintiff claiming his title to the property by inheritance and he also claimed that his mother had obtained the fictitious award and the decree and the sham award was obtained in collusion to defraud the creditors and the Income-tax Department during the lifetime of the father of the plaintiff. It was pleaded that the plaintiff's father continued to remain owner of the property covered under the sham award and thus, on his death the plaintiff inherited his sh .....

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by his father and mother to defraud the creditors. 54. This case squarely applies to the facts of the present case as averred in the plaint. So, for parity of reasons it must be held that the suit of the plaintiff is not hit by the provisions of Sections 32 and 33 of the Arbitration Act. 55. In Orient Transport Co., Gulabra v. M/ s. Jaya Bharat Credit and Investment Co. Ltd., , it was observed by the Supreme Court that Section 32 of the Arbitration Act does not contemplate the case of a suit cha .....

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right has not been taken away by Section 32 of the Arbitration Act. On the same principle the right of the plaintiff to file the present suit does not appear to have been affected by provisions of Sections 32 and 33 of the Arbitration Act whereas the plaintiff's case is that the award and the decree were bogus and the sham documents and were 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 writ .....

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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 .....

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h the revenue authorities. Plaintiff has categorically taken the plea in the plaint that he had signed the documents without bothering to looking into the contents and the (sic) some of the documents even blank and he did sign the documents as he had full faith in his father. This issue also cannot be decided without recording evidence, whether plaintiff was also party to the fraud being practiced on the revenue authorities or not; or whether he signed those documents knowing their contents full .....

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ed to create partition of the Joint Hindu Family properties and in fact, the said partition had taken place, can be decided only after recording evidence. 60. Reference is made to decision of the Supreme Court given in Bishundeo Narain v. Seogeni Rai and Jagernath, , in which it has been held that general allegations are insufficient even to amount to an averment of fraud of which any Court ought to take notice however strong the language in which they are couched may be, and the same applies to .....

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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 prono .....

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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 be brought. 62. Then reliance is placed on Jawahar Lal Barman v. Union of India, . 1 do not think this judgment is of any help in support of the contention that the present suit is barred by any provision of the Arbitration Act. The judgment only refers to the main object of introduction of Sections 32 and 33 in the statute. 63. Then reference is made to certain jud .....

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red to the averments made in the plaint and also to the facts which have come out in the statement made under Order X of the Code of Civil Procedure and to the documents to which my attention has been drawn during the course of arguments. 64. Then reference is made to Syed Asadullah Kazmi v. The Addl. District Judge, Allahabad, , in which it was observed that once an order has acquired finality the controversy stands concluded and it could not be reopened and also to B. N. Pandey v. Smt. Indira .....

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the revenue authorities or not? 65. Reference is made to Modi Spinning and Weaving Mills Co. Ltd. v. Ladha Ram and Co., , which lays down that the repudiation of a clear admission is not permissible. Again, it is a question of fact whether the plaintiff has made any admission or not knowingly. So, this judgment also does not advance the case of the defendants in support of the said applications. 66. Reference is then made to T. Arivandandam v. T. Y. Satyapal, , in which it has been held that the .....

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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 ha .....

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t in contravention has been filed, the contents of the affidavit should be deemed to be believed. I do not understand how this judgment is of any relevance to the points in (issue?) arising in the aforesaid applications. 69. 1 have also gone through the written arguments of defendant No. I dated April 6, 199 1. An effort has been made in these written arguments to show that the judgment given in Bishundeo Narain, (supra) is binding as it was the judgment given by a Bench of five Judges. I have a .....

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