Kiran Raj

The Calcutta High Court has set aside a trial court’s judgement that declared a deed of gift void and issued a permanent injunction against the defendants regarding the transfer of a disputed property. The division bench ruled that the original judgment was beyond its jurisdiction as the trial court had not framed any issues regarding the central argument of the case and had failed to consider crucial legal aspects.

The dispute revolved around a deed of gift executed on May 22, 1985, by the original plaintiff, Rama Devi Chowdhury, in favor of Mandira Chowdhury. The trial court invalidated the deed on the basis that it violated Clause II (6) of a 99-year lease deed executed by the Calcutta Improvement Trust (CIT) in 1961. The clause mandated that any assignment or transfer required prior written permission from the CIT chairman, which was allegedly not obtained.

The appellants argued that the trial court failed to address the issue of limitation. The suit challenging the deed was filed in August 1992, seven years after its execution. They contended that under the Limitation Act, the prescribed period to challenge such a deed was three years unless fraud was involved. Since there was no specific allegation or finding of fraud, the suit should have been dismissed as time-barred.

Furthermore, the appellants pointed out that Rama Devi had acknowledged the execution of the deed in various instances. A letter sent by her to the CIT explicitly sought permission for the transfer, which was marked as evidence in court. The appellants asserted that there was no foundational evidence proving that she misunderstood the nature of the document at the time of execution.

The respondents, however, maintained that Rama Devi, being an illiterate woman, had been misled into signing the document, believing it to be a power of attorney. They stated that the transfer of a significant and valuable property to a relative outside Rama Devi’s immediate family raised serious concerns. The respondents cited similar judicial precedents where such transfers were viewed as suspicious and merited detailed scrutiny.

The High Court noted that the issue of whether the suit was time-barred was not addressed by the trial court, despite it being a mandatory requirement under Section 3 of the Limitation Act. The court recorded: "It is incumbent upon the court to decide such issue, even irrespective of any objection, within the contemplation of Section 3 of the Limitation Act."

The court further addressed the respondents’ claims of fraud and misrepresentation, stating: "There is nothing on record to indicate that Ashish used to collect rent on behalf of Rama, nor has any document come forth before the court to substantiate that Ashish used to collect such rent and deposit the same with Rama." The judgment underscored the lack of substantive proof to support the assertion that Rama Devi was misled regarding the nature of the deed.

Additionally, the court examined inconsistencies in the plaintiff’s testimony. While Rama Devi initially denied executing any registered deed, she later admitted to visiting the registration office and signing documents. The judgment stated: "She does not specifically deny the execution of the deed. Rather, in answer to the next few queries in her cross-examination, the donor/plaintiff admits that she went to the Registration Office once and signed one deed and put her LTI on the deed after understanding everything."

Regarding Clause II (6) of the lease deed, the High Court ruled that the clause was directory and not mandatory, as there was no explicit penal consequence for non-compliance. The judgment observed: "The only provision which requires consideration in this context is Clause (2) of paragraph III of the deed, which provides that the Board will, on the written request of the lessees made three months after the expiration of the term of the lease, at the expense of the lessees, grant a further lease for a period of 99 years from the expiration of the said term, unless, at the time of such request, there is an existing breach or non-observance of any of the covenants on the part of the lessees."

The High Court also pointed out that the CIT had not taken any steps to challenge the deed of gift or penalize the transfer. Instead, it had dismissed a later application by Rama Devi to transfer the property to her younger son, effectively validating the prior transfer in favor of Mandira Chowdhury.

The court examined the procedural irregularities in the trial court’s handling of the case. The judgment stated that no issue was framed concerning the alleged violation of Clause II (6), and there was no discussion in the impugned judgment regarding whether the parties had addressed the matter during arguments. The High Court stated: "By such observation regarding the only bone of contention being fraud, the learned Trial Judge made it explicitly evident that she did not formulate the alleged violation of Clause II (6) as an issue for the parties to address."

Moreover, the High Court considered the respondents’ argument that the transfer of property to an extended family member, instead of the donor’s children, created a suspicious circumstance. The court ruled that while such circumstances might warrant scrutiny, they do not automatically invalidate a legally executed deed. The judgment noted: "The execution of the gift deed and its registration having been validly proved by corroborative evidence by the plaintiffs/appellants, we do not find any reason to hold that the deprivation, by itself, tantamounted to a suspicious circumstance sufficient to dispel the presumption of correctness raised by the corroborative evidence in support of the valid execution of the deed."

The High Court stated that the trial court had exceeded its jurisdiction by invalidating the deed based on a ground that was neither framed as an issue nor argued by the parties. The judgment concluded: "The violation of Clause II (6), which was the only ground recorded in the impugned judgment for invalidating the disputed deed, is not tenable in the eye of law."

Accordingly, the appeal was allowed, and the trial court’s judgment and decree were set aside. The suit was dismissed, and all related applications were disposed of.

Case Title: Mandira Chowdhury and others vs. Rama Devi Chowdhury and others
Case Number: FA No. 104 of 2017, IA No: CAN 3 of 2022
Bench: Justice Sabyasachi Bhattacharyya and Justice Uday Kumar

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