Supreme Court Upholds Sale Deed, Undue Influence Not Proven: Raja Ram vs. Jai Prakash Singh (2019)

LEGAL ISSUE: Whether a sale deed executed by an elderly person was obtained under undue influence.

CASE TYPE: Civil Law – Transfer of Property

Case Name: Raja Ram vs. Jai Prakash Singh and Others

Judgment Date: 11 September 2019

Date of the Judgment: 11 September 2019

Citation: [Not Available in Source]

Judges: Navin Sinha, J. and Indira Banerjee, J.

Can a sale deed be challenged on the grounds of undue influence if the seller was old and infirm? The Supreme Court of India addressed this question in a recent case, examining the circumstances under which a transaction can be considered void due to undue influence. The Court analyzed whether the defendants had exerted undue influence over their father to obtain a sale deed. The bench comprised Justices Navin Sinha and Indira Banerjee, who delivered the judgment.

Case Background

The case revolves around a dispute over a sale deed executed by Vaijai, the father of the plaintiff, Raja Ram, and defendant no. 2, in favor of defendant no. 1, the wife of defendant no. 2. The plaintiffs contended that the sale deed, dated 02 March 1970, was obtained fraudulently by the defendants, exploiting Vaijai’s old age and infirmity. Vaijai was living with the defendants at the time of the sale. The plaintiffs alleged that Vaijai was of impaired mental capacity and was unduly influenced by the defendants. The original plaintiff no. 2, another brother, did not pursue the appeal. The suit was initially dismissed by the trial court, but the first appellate court reversed this decision, holding that the defendants failed to prove they had not exerted undue influence. The High Court, however, reversed the appellate court’s decision and restored the dismissal of the suit.

Timeline

Course of Proceedings

The trial court dismissed the plaintiff’s suit. The first appellate court reversed the trial court’s decision, stating that the defendants had failed to prove they did not exert undue influence over the deceased. The High Court reversed the first appellate court’s decision and restored the dismissal of the suit.

Legal Framework

The Supreme Court considered the following legal provisions:

• Section 14 of the Indian Contract Act, 1872: Defines ‘free consent’ as consent not caused by undue influence. The section states:
  
  “14. ‘Free consent’ defined – Consent is said to be free when it is not caused by – (1) xxxxx (2) Undue influence, as defined in section 16,…”
• Section 16 of the Indian Contract Act, 1872: Defines ‘undue influence’ as when one party dominates the will of another to gain an unfair advantage. The section states:
  
  “16. ‘Undue influence’ defined—(1) 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. (2) In particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in a position to dominate the will of another—(a) where he holds a real or apparent authority over the other, or where he stands in a fiduciary relation to the other; 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.(3) Where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that such contract was not induced by undue influence shall be upon the person in a position to dominate the will of the other. Nothing in the sub-section shall affect the provisions of section 111 of the Indian Evidence Act, 1872 (1 of 1872).”
• Section 111 of the Indian Evidence Act, 1872: Explains good faith in transactions where one party is in a position of active confidence. The section states:
  
  “111. Proof of good faith in transactions where one party is in relation of active confidence.—Where there is a question as to the good faith of a transaction between parties, one of whom stands to the other in a position of active confidence, the burden of proving the good faith of the transaction is on the party who is in a position of active confidence.”

Arguments

Appellant (Plaintiff)’s Arguments:

• The deceased was old, infirm, bedridden, and sick for about 8-10 years.
• His mental faculties were impaired, making him dependent on the defendants.
• The defendants were in a position to exercise undue influence.
• The deceased passed away within ten months of executing the sale deed.
• The witnesses to the sale deed were related to defendant no. 2.
• Full consideration for the sale was not established.
• Defendant no. 1 had no independent source of income to pay the purchase price.
• The wife of the deceased was not examined as a witness.
• The defendants did not present the Sub-Registrar as a witness.
• The deceased had not sold any land in 1968 as claimed by the defendants.

Respondent (Defendant)’s Arguments:

• Under Section 101 of the Evidence Act, 1872, the initial burden to prove undue influence lies with the plaintiff.
• The necessary pleadings for undue influence were lacking in the plaint.
• The first appellate court wrongly shifted the burden onto the respondents.
• Although old and infirm, the deceased was aware of the nature of the documents he executed.
• The deceased did not question the sale deed during the ten months he lived after its execution.
• The deceased had executed another sale deed in 1968, which was not questioned by the appellant.
• There should be no presumptions based solely on the deceased’s old age.
• DW-1, a witness to the sale deed, was present at the time of registration.
• The deceased acknowledged receiving consideration before the Sub-Registrar.
• The Sub-Registrar did not note any issues with the deceased’s condition or capacity.
• A registered instrument carries a presumption of correctness unless rebutted.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court framed the following issues for consideration:

1. What was the physical condition of the deceased and his capacity to execute the sale deed?
2. Did the defendants exercise undue influence over the deceased in having the sale deed executed in favor of defendant no. 1, given his physical infirmity due to old age?

Treatment of the Issue by the Court

The following table demonstrates how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Anil Rishi vs. Gurbaksh Singh [CITATION]*: The Court followed this case to state that the onus shifts to the defendant only after the plaintiff establishes a prima facie case of undue influence.
• Jamila Begum (D) thr. L.Rs. vs. Shami Mohd. (D) thr. L.Rs. and ors. [CITATION]*: The Court followed this case to state that the onus shifts to the defendant only after the plaintiff establishes a prima facie case of undue influence.
• Bishundeo Narain and Ors. vs. Seogeni Rai and Jagernath [CITATION]*: The Court relied on this case to emphasize that undue influence and coercion must be separately pleaded with full particulars.
• Subhas Chandra Das Mushib vs. Ganga Prosad Das Mushib and Ors. [CITATION]*: The Court used this case to distinguish between mere influence and undue influence, and to state that no presumption of undue influence arises merely due to close relations.
• Krishna Mohan Kul alias Nani Charan Kul and anr. vs. Patima Maity and ors. [CITATION]*: The Court distinguished this case based on its facts, noting that the executant in that case was over 100 years old, paralytic, and bedridden, which was not the case here.
• Pritam Singh vs. The State [CITATION]*: The Court used this case to state that it will not grant special leave unless exceptional circumstances exist and substantial injustice has been done.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the lack of specific pleadings and evidence of undue influence. The Court emphasized that old age and infirmity alone do not equate to mental incapacitation or undue influence. The fact that the deceased appeared before the sub-registrar and acknowledged the sale was a critical factor. The court also highlighted the importance of proper pleadings and evidence in cases of undue influence, emphasizing that mere allegations are insufficient.

Fact:Law Ratio

Logical Reasoning

The Court considered the argument that the deceased was old and infirm, but did not find sufficient evidence to conclude that he was mentally incapacitated. The Court also noted that the deceased appeared before the sub-registrar and acknowledged the sale deed. The Court emphasized that there was no evidence of rapid deterioration in the condition of the deceased between 1968 and 1970. The court also considered the fact that the deceased had executed another sale deed in 1968, which was not challenged by the appellant.

The Court then considered whether the defendants exerted undue influence over the deceased. The Court noted that the pleadings in the plaint were completely lacking in details or circumstances regarding the nature of undue influence. The Court stated that a mere bald statement attributed to the infirmity of the deceased was insufficient. The Court emphasized that the onus would shift to the original defendants only after the plaintiff established a prima facie case. The Court noted that the wife of the deceased was also present at the time of registration, and there was no evidence that she was dominated by the defendants. The Court also expressed concern that inferring undue influence merely because a sibling was looking after an elderly family member could lead to undesirable consequences.

The Court relied on Bishundeo Narain, stating that undue influence must be separately pleaded with full particulars. The Court also relied on Subhas Chandra, which distinguished between mere influence and undue influence, and stated that no presumption of undue influence arises merely due to close relations. The Court distinguished Krishna Mohan on its facts, noting that the executant in that case was over 100 years old, paralytic, and bedridden, which was not the case here.

The Supreme Court held that the first appellate court had erred in its appreciation of facts and evidence, and that the High Court was correct in restoring the dismissal of the suit. The Court also stated that it would not interfere with the concurrent findings of two courts unless exceptional and special circumstances existed. The Court stated: “We do not think that the present calls for exercise of any discretionary jurisdiction under Article 136 of the Constitution as a fourth court of appeal.”

The Court concluded: “On a consideration of the entirety of the matter we find no reason to interfere with the concurrent findings arrived at by two courts. The appeal is dismissed.”

The Court also stated: “There shall be no order as to costs.”

Key Takeaways

• Old age and physical infirmity alone are not sufficient grounds to prove undue influence in property transactions.
• The burden of proof to establish undue influence lies with the party alleging it.
• Specific pleadings and evidence are required to prove undue influence; general allegations are insufficient.
• A registered sale deed carries a presumption of correctness, which must be rebutted with sufficient evidence.
• The presence of the executant before the sub-registrar and their acknowledgment of the transaction are significant factors.

Directions

No specific directions were given by the Supreme Court in this judgment.

Specific Amendments Analysis

There is no discussion of specific amendments in this judgment.

Development of Law

The ratio decidendi of this case is that a registered sale deed cannot be challenged on grounds of undue influence solely based on the age and infirmity of the seller. The party alleging undue influence must provide specific pleadings and evidence to support their claim. The case reinforces the importance of the principle that a registered document carries a presumption of correctness. This case does not deviate from previous positions of law but clarifies the application of the law on undue influence in the context of property transactions involving elderly individuals.

Conclusion

The Supreme Court dismissed the appeal, upholding the High Court’s decision to restore the dismissal of the suit. The Court emphasized that the plaintiff failed to provide sufficient evidence of undue influence. The judgment reinforces that old age and infirmity alone do not equate to mental incapacitation or undue influence and that specific pleadings and evidence are necessary to establish such claims.

Category

Parent Category: Contract Law

Child Category: Undue Influence, Section 16, Indian Contract Act, 1872

Parent Category: Evidence Law

Child Category: Burden of Proof, Section 111, Indian Evidence Act, 1872

Parent Category: Transfer of Property

Child Category: Sale Deed, Registered Instrument

FAQ

Q: What is undue influence in the context of property transactions?

A: Undue influence occurs when one party uses their dominant position to unfairly influence another party’s decision, such as in a property transaction, leading to an unfair advantage.

Q: Can a sale deed be challenged if the seller was old and infirm?

A: Yes, but old age and infirmity alone are not sufficient grounds. The party challenging the sale deed must prove that undue influence was exerted.

Q: What is the burden of proof in cases of undue influence?

A: The initial burden of proof lies with the party alleging undue influence. They must provide specific pleadings and evidence to support their claim.

Q: What is the significance of a registered sale deed?

A: A registered sale deed carries a presumption of correctness. The burden to rebut this presumption lies with the party challenging the deed.

Q: What factors does the court consider when deciding cases of undue influence?

A: The court considers the physical and mental condition of the seller, the relationship between the parties, and whether there is evidence of specific acts of undue influence.