CRYSTAL DEVELOPERS ETC. ETC. v. SMT. ASHA LATA GHOSH (DEAD) THROUGH LRS. AND ORS., ETC. ETC.

68 SUPREME COURT REPORTS [2004] SUPP. 5 S.C.R.

A on account of fraud. Lastly, the High Court has observed that the will is lying in the state of derelict without being probated. Here also one finds that after revocation, Arindam applied for revival of proceedings; that order of revival was passed and it was challenged by one of the other sons of Balai Chand. Therefore, these circumstances which indicate the strained relationship between B the parties, their propensity to litigate at every stage have not been considered by the Courts below. In these circumstances, we have no hesitation in saying that the findings are based on conjectures and suspicion and that relevant circumstances have not been taken into account.

(II) WAS THE DISPOSITION, DURING THEPENDENCY OF THE PROBATE FOUNDED ON FRAUD OR COLLUSION c BETWEEN THE EXECUTOR AND THE DEVELOPERS?

AND

(III) WAS DEFENDANT N0.14 BONAFIDE PURCHASER FOR VALUE WITHOUT NOTICE? IF SO, WHETHER D SUBSEQUENT ALIENATION BY DEFENDANT No.14 IN FAVOUR OF DEFENDANTS No.15 TO 20 IS VALID AND BINDING ON THE INTESTATE HEIRS OF BALAI CHAND?

Applying the above tests to the evidence on record we find that Balai G Chand had strained relationship with his first two wives; that he had differences with his sons from the first two wives; that there were litigations writ galore between them; that Balai Chand loved Arindam and that he had bequeathed the suit premises to Arindam under the above will. Further, the sons of Ninnala have fought legal battles on every issue both during the life time of Balai Chand and even after his demise. Even after revocation, Ramesh had objected to revival of probate proceedings. These circumstances are relevant

CRYSTAL DEVELOPERS v. AL GHOSH [KAPADIA, J.] 69

because the main ground on which the Couits below have proceeded to declare Ex.A/8 as fictitious, although there is no plea, was the speed with which Ex.A/8 came about. According to the impugned judgments the manner in which suit no.3 I 0/8 I was filed without imp leading the other heirs and the / manner in which Ex.A/8 came to be executed on 4.8. I 98 I after the grant on 3l.7.I98I, without reference to the consent decree dated 3.8.I98I in suit no.3 I 0/81, proved that Ex.A/8 was collusive and fictitious having being entered into to defeat the claims of the intestate heirs. These findings of the Courts below are without consideration of the relevant circumstances. After the will dated 25.I2.I977, Ex.All was executed on I2.3.I979 followed by supplemental agreement dated 2 l. 7. I 980 (Ex.A/2) under which Balai Chand agreed to sell the suit premises to defendant no.14. It is true that Ex.A/I and C Ex.A/2 have been signed by Arindam as constituted attorney of Balai Chand. Ho~ever, it would not be correct to say that Balai Chand was not aware of ~xf.t/I and Ex.A/2. In this connection, DWI has deposed that Rs. l.25 lacs .was '°eceived by him under the said agreement, Ex.A/I. That as can be seen from Ex.A/3, the cheque for Rs. l.25 lacs was drawn in favour of Balai Chand. The said amount was credited to his account. This evidence is not considered by the Courts below. This evidence was clinching as Ex.A/8 has been executed pursuant to Ex.A/I and Ex.A/2 which were entered into during > the life time of Balai Chand. That Ex.All and Ex.A/2 were, therefore, binding on the estate of Balai Chand and his other heirs. Under the will the suit premises have been bequeathed to Arindam. Hence, both the Courts erred in holding that Ex.A/8 was fictitious having been entered into to defeat the claim of other heirs.

Now coming to the finding of the Courts below that the haste with which Ex.A/8 was entered into indicated collusion between Arindam and the Developers and consequently both the Courts below have held that the impugned Ex.A/8 was fraudulent and not binding on the other heirs. In the circumstances both the Courts below have held that defendant no.14 was a privy to the fraud in execution of Ex.A/8. These findings are given without any plea of fraud or collusion against defendant no. I 4. There is no issue framed by the trial Court. The trial Court has framed the issue of collusion against defendants no. I 5 to 20. In the plaint, collusion is alleged between defendants no. I and 2. In the impugned judgment of the Division Bench of the High Court, great stress is laid on suit no.3 I 0/8 I being filed without impleading the other heirs in coming to the conclusion that the developers were not bona fide purchasers an_d that they had knowledge of the alleged > fraud by Arindam in obtaining the probate without service of citation on H

70 SUPREME COURT REPORTS [2004) SUPP. 5 S.C.R.

A Manju and Parul. However, while returning the above findings, both the ,,..,.. Courts below have failed to notice the evidence on record. Suit no.310/81 was filed on 21.4.1981 prior to the partition suit. It was filed to enforce Ex.All dated 12.3.1979. Suit No.310/81 was filed after the will and before Arindam could obtain the probate. As stated above; Arindam was the executor ~ under the will. He was a legatee under the will. At the time of the filing of B the suit the will was in existence. At the time of the suit, Ex.A/I and Ex.A/ 2 were there. As held, the executor has authority under the will to alienate. That he need not wait till the probate. For filing the said suit no.310/81, ·(

probate was not required. However, before the decree, probate had been obtained. In the circumstances, without allegation of collusion against c developers, both the Courts erred in holding, without evidence, that Ex.A/8 was collusive as it was got executed expeditiously. Here also, we find that relevant evidence has not been taken into account. The evidence shows the propensity of the family to litigate on every issue. The developers had invested huge amount not only in· the payment of consideration but also by way of costs incurred to free .the suit premises from requisition, acquisition and other D encumbrances including eviction of tenants. Under the above circumstances, after the probate, the developers were bound to expedite the sale. Even according to the Division Bench of the High Court, Arindam was not reliable. In the circumstances, without evidence, the Courts below erred on the basis of expedition of sale that Ex.A/8 was fictitious and based on collusion between E Arindam and defendant no.14. Similarly, for the aforestated reasons, both the Courts below erred in holding that probate was obtained fraudulently without effecting service on Parul and Manju.

Lastly, both the. Courts below have failed to notice the provisions of section 41 of Transfer of Property Act. F In the case of Gurbaksh Singh v. Nikka Singh and Anr., reported in AIR (1963) SC 1917 it has been held that section 41 is an exception to the general rule that a person cannot confer a better title than what he has. Being an exception the onus is on the transferee to show that the transferor was the ostensible owner of the propert~ and that the transferee had after taking G reasonable care to ascertain that the transferor had power to transfer, acted · in good faith.

In the case of Seshumull M Shah v. Sayed Abdul Rashid and Ors., reported in AIR (1991) Karnataka 273, it has been held that in every case, where a transferee for valuable consideration seeks protection under section H '

-'"' CRYSTAL DEVELOPERS v. A.L GHOSH [KAPADIA, J.) 71 41 of the Transfer of Property Act, the transferee must show that the real A owner had permitted the apparent owner either by express words, consent or conduct to transfer the property in favour of the transferee. In other words, it must be shown that with the consent of the true owner, the ostensible owner was able to represent himself as the owner of the property to the "' purchaser for value without notice. B - Applying the above tests to the facts and circumstances of the present case, we find, on the basis of the evidence on record, that the suit for partition was filed on 2 l.9.198 l. Nirmala was aware of the will as early as 21.8.1982. She did not apply for letters of administration. She did not challenge the will. Between 21.9.1981to22.6.1993 (when the plaint was amended) the developers c demolished the old building. They constructed a multi-storey building. They got freed the property from all encumbrances stated herein above. In the circumstances, it cannot be said that the other heirs of Balai Chand had no knowledge of the aforestated events. (See: Order of the Division Bench in Naresh Chandra Ghosh and Ors. v. Archit Vanijya and Viniyog Ltd. and D Ors., reported in (1998) 2 Cal. L.J. 344]. In our view, the test laid down in .... the matter of applicability of section 41 of the Transfer of Property Act is squarely applicable to the facts of the present case. The intestate heirs of Balai Chand allowed Arindam to represent to the developers that he was the owner of the suit premises. It is established by the conduct of the inaction on the part of the intestate heirs of Balai Chand. Hence, we hold that defendant no.14 was bona fide purchaser for value.

Before concluding, we may refer to the judgment of the Madras High Court in the case of G.F.F. Foulkes and Ors. v. A.S. Suppan Chettiar and Anr., reported in AIR (1951) Madras 296 in which it has been held that ifthe nature of the transaction· gives notice to the purchaser that the executor was disposing of the assets contrary to the will then the purchaser is said to have participated with the executor in an improper conversion of the estate of the deceased and in such a case the sale woµld be invalid. In the present case, under the will, the suit premises have been bequeathed to Arindam who is also appointed as an executor. Therefore, there is nothing to suggest that G Ex.A/8 was incompatible with the administration of the estate of Balai Chand. In the circumstances, we hold that defendant no.14 was a bona fide purchaser for value and the alienation effected by defendant no.14 in favour of defendants no.15 to 20 was valid . .-> H

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A Lastly, we may refer to the preliminary objection advanced on behalf of the plaintiffs. When the matt~r came up for final hearing before the Division Bench of the High Court, an enquiry was made by the learned Judges from the subsequent purchasers whether they would like to prove the will or await '-" the decision in the probate case before proceeding with the appeals arising out of the judgment of the trial Court granting a preliminary decree for B partition. At that stage, defendants no.14 to 20 stated that they wanted to proceed with the matter and that they did not want to await the decision of • the Probate Court. The learned counsel appearing on behalf of the plaintiffs submitted that in view of the aforestated statement made on behalf of the defendants no.14 to 20, it was not open to the said defendants to rely upon c the probate or the will for the purposes of showing that they were bonafide purchasers for value without notice and that their purchase was good and valid as defendant no.2 had a good title to convey on the basis of the will and the probate. Before us, it has been submitted on behalf of the plaintiffs that if a particular concession is recorded in the judgment of the High Court, the D party aggrieved can not thereafter assail the same. We do not find any merit in this argument. Firstly, before the trial Court, defendant no.14 and defendants no.15 to 20 had asked for stay of the partition suit pending decision by the Probate Court. It was objected to by the plaintiffs. The objection of the plaintiffs was upheld and the matter was decided against the defendants. Secondly, before the trial Court, it was the plaintiffs who had relied upon the - E alleged suspicious circumstances surrounding the will. In the circumstances, defendants no.14 to 20 cannot be prevented from relying on the probate and the will.

We are mindful of the fact that g~nerally this Court does not interfere with the concurrent findings recorded by the Courts below in civil appeals by way of special leave under Article 136 of the Constitution oflndia. However, in cases where the Courts below have given findings on documents and on the basis of assumption and inferences founded on facts and circumstances, which in themselves offer no direct or positive support for the conclusion reached, it is our incumbent duty to review such inferential process. In such cases, the right of this Court to review such inferential process cannot be denied. It is well settled that inferences have to be drawn from a given set of facts and circumstances with realistic diversity and not with dead uniformity. We have, therefore; interfered with the concurrent findings recorded by the Courts below as we find that in the present case, findings have been recorded on fraud and coltiision in favour of the plaintiffs, who have not alleged fraud -41..,

CRYSTAL DEVELOPERS v. A.L GHOSH [KAPADIA, J.) 73 or collusion supported by the particulars. A For the reasons stated above, the appeals succeed and are allowed. The judgment and decree of both the Courts below are set aside and the suit for partition stands dismissed. Interim order, if any, against the appellants stands vacated. B CIVIL APPEAL Nos.6871-6873 OF 2003.

For reasons given in our judgment allowing Civil Appeals No.6258 and 6259 of 2000 and in view of our finding that the conveyance dated 4.8.1981 executed by Arindam in favour of Crystal Developers was valid and in view C of our finding that the Crystal Developers were bona fide purchasers for value, these appeals have become infructuous and the same are disposed of accordingly.

There shall be no order as to costs in all the appeals. D S.K.S. C.A. Nos. 6258 and 6259/2000 allowed. C.A. Nos. 6871-73/03 disposed of.