F. A. No. 83 of 1985

14th February, 1992.

Petitioner Counsel: S. N. Loya
Respondent Counsel: C. G. Solshe

JUDGMENT

N. P. CHAPALGAONKER, J. :- Plaintiff, a widow, filed a suit to avoid two registered sale-deeds which she had executed in favour of one Loknathsing on 19-5-1977 selling 8 Acres and 16 Gunthas portion from survey No. 37 and 3 Acres and 28 Gunthas land of survey No. 71/A/1 situated at village Wangi. Plaintiff contends that the said property was originally owned by Shankarrao, her husband, who had received it as gift from his maternal grandmother, Bhagubai. Shankarrao died in the year 1948 and after his death plaintiff became owner of this property as sole owner as Shankarrao's widow. It is her case that since Jaiwantrao, father-in-law of the plaintiff, had started some proceedings against the plaintiff in order to grab the property and since her father was not well-versed with the Court procedure, after the death of her husband and during the lifetime of her father, Loknathsing, father of defendant-appellants Nos. 1, 2 and 5 and husband of the defendant-appellant No. 4 started assisting plaintiff in this litigation. It is also her case that he assisted her in the cultivation of the saidlands also. Particularly after the death of her father, plaintiff alleges that, she came in further close contact of Loknathsing and developed sexual intimacy. Sometime in the year 1960, plaintiff shifted to Gangakhed since villagers in Wangi were enraged because of the closeness of Loknathsing with the plaintiff and Loknathsing continued to visit plaintiff even at Gangakhed. Though there was no necessity for selling the suit lands, plaintiff executed sale-deeds of both these lands without receivingany consideration therefor. Plaintiff, therefore, wants to avoid the sale-deeds by seeking cancellation of the registered sale-deeds.

2. Loknathsing died on 22-8-1979 and Special Civil Suit No. 23/1979 by Gayabai came to be filed thereafter in the month of October, 1979. Defendants have denied the above contention. As per their contention, plaintiff was supported by her father and brother and their advice was always available to her. The sexual intimacy of Loknathsing with plaintiff has been denied and it was contended that the purchase was for the regular market price and the sale-deeds in question are effective and binding.

3. On these pleadings, learned Civil Judge (S.D.), Parbhani, was pleased to hold that the two sale-deeds in question were the result of the undue influence exercised by Loknathsing over the plaintiff and no consideration is received by the plaintiff therefor. He was pleased to decree the suit by declaring that both the registered sale-deeds are ineffective and inoperative. He directed that the plaintiff be put in possession of the suit lands with further directions about the enquiry of future mesne profits under Order XX, Rule 12 of the Code of Civil Procedure, 1908. Defendants have challenged this decree dated 27th March, 1985.

4. Shri S. N. Loya, learned Counsel appearing for appellants/defendants, submitted that there is no proof of sexual intimacy between the plaintiff and Loknathsing and the bare word of the plaintiff in this respect cannot be believed. He further submitted that there is not even a whisper regarding exercise of undue influence by Loknathsing either in the pleadings or proof and, therefore, the decree passed by the trial Court deserves to be set aside. Shri C. G. Solshe, learned Counsel appearing for respondent/plaintiff, supported the decree and contended that the record amply shows that Loknathsing helped plaintiff in the litigation and in the cultivation and both of them were living as husband and wife at least for some time. Therefore, it can be inferred that Loknathsingh was in a position to dominate the will of plaintiff who is an illiterate widow and in such case, an inference of exercise of undue influence will have to be drawn and it would then be the duty of the defendant to show that no undue influence was exercised. In this respect, defendant has not led any positive evidence and, therefore, the decree passed by the learned trial Judge deserves to be confirmed.

5. Firstly we would consider the circumstances by which plaintiff has alleged that she had no independent will at the time of execution of the sale-deed. Plaintiff is a widow and after the death of her husband in the year 1948, she had support and protection of her father only for a short period. Her father himself requested Loknathsing to assist in the Court matters, according to her own testimony. It has come in the evidence of Gayabai (plaintiff herself); Tolbarao Gavane, Advocate (DW 2); Sadashivrao Savargaonkar, Advocate (DW 4) and Shrinivas Aundhekar, Advocate (DW 5) that Loknathsing was coming along with Gayabai for instructing Advocates in the litigation which she was required to face. We have some documentary evidence also on record, such as, panchanama of possession in Regular Civil Suit No. 2/1965 (Gayabai vs. Aba) which is Exhibit 100 and the receipt of possession which is Exhibit 101 in the same suit which goes to show that the possession in this suit was obtained by plaintiff Gayabai through Loknathsing. In her cross-examination, plaintiff has admitted that she had authorized Loknathsing to obtain possession on her behalf since she was afraid of the defendants in that case. Loknathsing has given evidence on behalf of the plaintiff in Regular Civil Suit No. 890/1951 which the plaintiff had filed against her father-in-law Jayawanta. Taking into consideration these documents and the testimonies, before the learned trial Judge, we have no difficulty in holding that Loknathsing was helping the plaintiff in the litigation.

6. Further contention raised by the plaintiff is that Loknathsing had a sexual intimacy with her. Sexual intimacy, particularly extra marital, may put one of the partners in a position to dominate the will of the other. But it is difficult to presume that the male partner would always dominate the will of the woman. It is true that women in our society are pushed to an inferior position. But this matter of general knowledge would not enable Courts to infer in all cases that the male partner has dominated the will of the woman. If the relationship is that of a husband and wife, the situation is different. The economic affairs of the family are generally managed by the husband in Indian society and, therefore, if a wife enters into a contract with the husband, certain inferences may follow. But this cannot be presumed in cases of extra marital relations. Therefore, we will have to scrutinize the evidence led by the parties in this respect very carefully.

7. Plaintiff has pleaded her case in the following terms :-

"Deceased Loknathsing personally conducted the proceedings on behalf of plaintiff and as per her say, against her father-in-law and succeeded in the same, since the plaintiff being a successful party due to nicely conducting the proceedings by Loknathsing on her behalf, she very much impressed by Loknathsing. Thus, the plaintiff created full belief in her mind about Loknathsing and the deceased Loknathsing also concurred full faith of the plaintiff and slowly both of them i.e. the plaintiff and Loknathsing developed love affairs and affinity with each other and consequently entered into sexual relationship."

It is further contended in the plaint thus :

"That, as discussed, deceased Loknathsing came in close contact and developed full sexual relationship with the plaintiff during the course of above period and the deceased Loknathsing held a real or apparent authority over the plaintiff in day-to-day business and in whole proceedings. The plaintiff came in full confidence of Loknathsing and was under the thumb and full influence of him."

To prove the above pleadings, plaintiff has examined herself and has deposed that she had faith in Loknathsing and has also love and affection for him and both of them had sexual relations with each other for 20 years. However, in the cross-examination, she has admitted that she had illicit relations with Loknathsing for about 16 years prior to his death and that was when she was residing at Gangakhed. She had no sexual relations with Loknathsing when she was residing at Wangi. Only one witness from Wangi, namely Naruji (DW 3) has been examined by the plaintiff. He has deposed that Loknathsing was visiting Gayabai's house frequently and they had illicit relations for about 3 years at Wangi, later on he took her to Gangakhed. The version given by Naruji is totally different than the case put up by plaintiff. Apart from this witness, Mahadeo Mandode (DW 6) in whose house Gayabai was living for sometime at Gangakhed has deposed that Loknathsing was visiting the room occupied by Gayabai and he was taking his meals and was also staying in the same room whenever night halt was required at Gangakhed. With this evidence, it would be unsafe to hold that Loknathsing was having sexual relations with Gayabai. At best, what can be inferred is that he was having good family relations with Gayabai and was helping her in the cultivation and litigation.

8. According to Shri Solshe, learned Counsel appearing for respondent/plaintiff, if a close relationship between an illiterate widow and a male person capable of dominating her will is established, it would be for male person to establish that he has not exercised an undue influence if he has entered into a contract with that widow. Relying on section 16(3) of the Indian Contract Act, 1872, he submits that the burden of proving that such contract was not induced by an undue influence shall lie on the defendant. According to Shri Solshe, there is enough material on record to show that Loknathsing was in a position to dominate will of Gayabai and she had no independent advice.

9. Parties to the contract are bound by its terms and they are under an obligation to fulfil part of the contract. Sections 15, 16, 17, 18, 20, 21 and 22 of the Indian Contract Act, 1872 are exception to this general obligation cast on the party to the contract. If consent of a party to the contract is caused by coercion, undue influence, fraud, misrepresentation or mistake, then the contract would be voidable at the instance of the party whose consent was so obtained. This being an exception to the sanctity of the contract, it will have to be proved by the specific pleading followed by the strict proof. Therefore, specific provision has been made in the Code of Civil Procedure, 1908 under Order VI, Rule 4 requiring that the particulars of the said allegation constituting misrepresentation, fraud or undue influence, etc., as the case may be, shall be stated in the pleadings. If the requirement of Order VI, Rule 4, is to be complied, it would not be sufficient to show that the other party to the contract was in a position to dominate will of the plaintiff. Apart from this fact, it will also have to be shown that the said party has actually dominated will of the plaintiff and the particulars as to how the will was dominated unduly also will have to be given. In this respect, we will have to examine the pleadings of the plaintiff in the present suit. Apart from the above quoted contention, the only statement in the plaint is to the following effect :-

"In fact the plaintiff was not willing to sell the disputed property and execute the sale-deed as there was no necessity for her to do the same. Neither she received the consideration amount as mentioned in the sale-deeds. .... ..... .... But these sale-deeds were executed because the relations between the plaintiff and the deceased Loknathsing were as such that he was in a position that he dominated the will of the plaintiff and he used that position of their relations to obtain unfair advantage over the plaintiff and got executed both the sale-deeds on one and the same day."

These pleadings can hardly be treated as necessary particulars of undue influence. Even assuming that Loknathsing was very close to the plaintiff, it cannot be known as to how he has persuaded plaintiff to execute the sale-deed and while getting consent of the plaintiff for this purpose he has exercised undue influence. It is not for a Court to infer an undue influence since this will have to be distinguished from the influence which a person may exercise on other. Plaintiff Gayabai is conscious of her property rights. As per her contention, when her father-in-law wanted to grab the property, she instituted suits. She was so determined that she sought help from Loknathsing to pursue her litigation since her father was not well acquainted with Court procedure. If such a woman is to be influenced unduly so as to impair her independent judgment, something more than the mere relationship would be required.

10. The relation between an Advocate and a client; a Doctor and a patient; a teacher and a pupil; a master and a servant; a trustee and a beneficiary is of such a nature wherein there is an inequality of bargaining power and after reading the evidence led by the parties and after examining the nature of the contract, the Court will relieve the weaker party to the contract from the legal duty to fulfil it if it is found that the consent was not a free consent. The doctrine embodied insection 16 to section 20 of the Indian Contract Act, 1872 is the statutory recognition of the English rule. Lord Denning M.R., speaking for the Court in the case of Lloyds Bank Ltd. vs. Bundy, Law Reports Queens Bench Division, 1975 page 326, has explained the principle thus :-

"By virtue of it, the English law gives relief to one who, without independent advice, enters into a contract upon terms which are very unfair or transfers property for a consideration which is grossly inadequate, when his bargaining power is grievously impaired by reason of his own needs or desires, or by his own ignorance or infirmity, coupled with undue influence or pressures brought to bear on him by or for the benefit of the other."

11. Section 16 of the Indian Contract Act, 1872 requires that the contract will have to be proved to be induced by an undue influence and for which two things will have to be established :

(1) Relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other, and (2) Uses that position to obtain an unfair advantage over the other. It is true that the evidence about the second element might only be in the nature of inferences in a given case. But still it will have to be kept in mind that this is an ingredient essential to determine voidability of the contract. Sub-section (3) of section 16 of the Indian Contract Act, 1872 reads as follows :-

"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 lie upon the person in a position to dominate the will of the other."

Shri Solshe relying on this provision, contends that when the relationship of the required nature is established, the burden of proving that such a contract was not induced by an undue influence shall lie on the person who is in a position to dominate the will of the other. We are afraid, that the contention raised by the learned Counsel cannot be accepted. Though the relationship of the nature which places parties on unequal planks would be material circumstance and may help in drawing some inferences, still exercise of undue influence will have to be alleged and proved. Court will have to consider the relationship as well as circumstances attending the transactions. Justice Keshav Rao Balkrishna Wassoodew speaking for a Division Bench of this Court in the case of Shivgangawa Madiwalappa Vulavi vs. Basangouda Govindgouda Patil, AIR 1938 Bom. 304, has pointed out the necessity to consider both these factors. He has also laid down that this rule of equity is not restricted to cases where strictly or technically fiduciary relationship is established. He has observed thus :

"Therefore the rule must apply to all variety of relations in which the Court is satisfied that the possibility of exercise of dominion and influence exists; that is, the relation of active confidence justifying the raising of the presumption of undue influence. It must however be borne in mind that the application of the rule of presumption must depend not merely upon the circumstances attending the transaction but upon the relationship itself. The relation of paramour and mistress may be included in such cases if the party obtaining the benefit is in a position to dominate and influence the will of the other."

The relationship coupled with circumstances attending transaction will have to be placed in pleading as proof before the Court and then after considering both these factors the Court would examine nature of the contract. If it was a bargain which would shock the conscience and is unconscionable then the burden would shift on the person who wants to defend the agreement and he will have to prove that he has not exercised any undue influence.

12. Shri Solshe further relies on the judgment of learned single Judge of Allahabad High Court in the case of Ashok Kumar and another vs. Gaon Sabha, Ratauli and others, AIR 1981 All. 222. Though the case at hand before the learned Judge was in respect of a Pardanashin lady, but the learned Judge was pleased to observe thus :-

"It is not merely by reason of pardah itself that the law throws its protection around a pardanashin lady but by reason of those disabilities to which the life of a section of people living in seclusion gives rise to the disabilities and with which a pardanashin lady suffers."

Shri Solshe wants to submit that an illiterate widow living in a village in this part of the country is similarly disabled as a Pardanashin lady. She has no access to the male dominated society and is not capable of getting independent advice. As already pointed out, present plaintiff Gayabai had instituted suits and determined to fight with her father-in-law before her introduction with Loknathsing. It has also come in evidence that her father was alive and very much wanted to help her. She has also a brother living. If plaintiff was not capable of knowing consequences of losing the property then she would not have dared to fight her father-in-law and also with Aba and Kishan when they claimed tenancy right over the land. Therefore, mere relationship of Loknathsing with the plaintiff would not be sufficient to shift the burden of proof on the defendants in this case.

13. A useful reference can be made to some of the judgments of the Privy Council and the Supreme Court in this regard. In the case of Raghunath Prasad Sahu vs. Sarju Prasad Sahu and others, 1924 PC 60, Their Lordships interpreted sub-section 3 of section 16 of the Indian Contract Act and were pleased to lay down thus :

"By this sub-section three matters are dealt with. In the first place the relations between the parties to each other must be such that one is in a position to dominate the will of the other. Once that position is substantiated the second stage has been reached, viz., the issue whether the contract has been induced by undue influence. Upon the determination of this issue a third point emerges, which is that of the ONUS PROBANDI. The burden of proving that the contract was not induced by undue influence is to lie upon the person who was in a position to dominate the will of the other."

Another case which will have to be referred to is the case of Afsar Shaikh and another vs. Soleman Bibi and others, AIR 1976 SC 163. In this case, plaintiff, an old man of 90 years was first defrauded by one Saifuddin who fraudulently got registered a will-deed. Then the defendant Afsar, distant relation, came in contact with the plaintiff and helped in cultivation of the lands and took plaintiff to the registration office for purported purpose of the cancellation of the will-deed and instead got a Hiba-bil-Ewaz transferring 12½ Bighas land of the plaintiff in his own name. Supreme Court has made certain observations in this case which are very relevant to the present case also. Supreme Court observed thus :-

"A general allegation in the plaint that the plaintiff was a simple old man of ninety who had reposed great confidence in the defendant, was much too insufficient to amount to an averment of undue influence of which the High Court could take notice."

The learned Judges referring to the earlier decision of the Privy Council in Poosathurai vs. Kappanna Chettiar, AIR 1920 PC 65, went on to further observe thus :-

"It is not sufficient for the person seeking the relief to show that the relations of the parties have been such that the one naturally relied upon the other for advice, and the other was in a position to dominate the will of the first in giving it. "More than mere influence must be proved so as to render influence in the language of the law, 'undue'. "

In effect, Supreme Court has laid down that the first clause of section 16 of the Indian Contract Act, 1872, requires that the relationship subsisting between the parties must be such as to enable one party to dominate the will of the other and secondly it also requires that that dominant party uses that position to obtain an unfair advantage over the other. This two-fold burden is on the plaintiff who wants to avoid the contract. In the instant case, though there is evidence which may enable to conclude that the plaintiff and the defendant had such relationship which gave a party position to dominate the will of the other, there is absolutely no evidence that the other dominant party i.e. Loknathsing did exercise any undue influence led by the plaintiff. Any disability of the plaintiff because of the relationship with the defendant or the fact that she is a widow or an illiterate woman by itself does not make the contract an unconscionable one. Even if in a case the consideration is somewhat low than the market price, that alone will not make the contract unconscionable. The words which the legislature has used are indicative that the burden shifts only when the contract is pulpably unjust. When can a contract be said to be unconscionable is a question to be decided on the facts of each case.

14. While considering voidability of the contract under section 16(3) of the Indian Contract Act, 1872, basic difference between sale and gift also assumes importance. In case of a gift in favour of party who could have dominated, benefit is obvious. Whereas in case of sale, when consideration is proved, the unfair advantage by such party will have to be examined. Gift raises more suspicion than sale deed for consideration. Unfair advantage is the essential ingredient for a relief on the basis of section 16 of the Indian Contract Act, 1872. The degree of the unfair advantage should also be of such a nature as would shock one's conscience. Therefore, merely because consideration is somewhat lesser than the market price, the contract would not be unconscionable.

15. In the instant case, 3 Acres and 28 Gunthas of land is sold for Rs. 4,000/- and 8 Acres and 16 Gunthasl and is sold for Rs. 10,000/-. Approximate rate is more than Rs. 1,000/- per acre. Plaintiff contends that she has not received any consideration at all in respect of both the sale-deeds. Exhibit 105 is an agreement of sale executed on a stamp paper of Rs. 01=50 Paise purchased by Gayabai on 5-9-1959 and in this agreement dated 7th September 1959, Gayabai has admitted to have received Rs. 4,000/- as consideration. (DW 2) Vithalrao Shinde (exhibit 109) has testified that Gayabai put her thumb impression on the said agreement after the oral talk and Loknathsing paid a sum of Rs. 4,000/- in presence of witnesses. Exhibit 106 is the sale deed executed in furtherance of this agreement on 19-5-1977. This registered sale-deed also acknowledges the receipt of Rs. 4,000/- by Gayabai prior to the execution of the document. Another agreement in question is at exhibit 107. It is executed in favour of Badrising on 28-4-1976. This agreement is also on a stamp paper purchased byGayabai and acknowledges that Gayabai received a sum of Rs. 5,000/- as an earnest money out of Rs. 13,000/- agreed as a consideration for the sale of 3 Acres and 16 gunthas land from the land survey No. 37. DW 3, Shrirang Shinde (exhibit 110) has proved this agreement and has testified that Badrising paid a sum of Rs. 5,000/- in cash in his presence to Gayabai at the time of execution of this document. Sale-deed in pursuance of this agreement is dated 19-5-1977 and is at exhibit 108. There is a little variance about the consideration amount and in respect of earnest money in the agreement and the sale-deed. Agreement mentions sale price at Rs. 13,000/- whereas sale deed is for Rs. 10,000/-. Earnest money received mentioned in the agreement is Rs. 5,000/- but in sale-deed acknowledges Rs. 3,000/- only as earnest money. This appears to an exercise to save some stamp duty. Rs. 7,000/- have been received by Gayabni in presence of the Sub-Registrar, Parbhani, before whom the document was presented for registration. There is an endorsement of the Registrar that a sum of Rs. 7,000/- was paid to Gayabai by Loknathsing. Plaintiff Gayabai has deposed in her testimony that the endorsement of the Registrar that she has received Rs. 7,000/- at the time of execution of the document before the Sub-Registrar is also false. According to Shri Solshe, a presumption which arises about the receipt of the consideration by virtue of provisions of section 58(c) of the Indian Registration Act, 1908 is a rebuttable presumption and not a conclusive proof. There can hardly be any quarrel with the proposition which Shri Solshe wants to advance. Section 58(c) of the Indian Registration Act, 1908 speaks about the endorsement about the payment of money or delivery of goods made in the presence of the registering officer and also any admission of receipt of consideration made in his presence in reference to such execution.

16. Shri Solshe wants to rely on the judgment of this Court in Nainsukhdas Sheonarayan vs. Gowardhandas Bindrabandas and others, AIR (35) 1948 Nagpur 110. The learned Judges have in fact held in para 27 of the judgment thus :-

"Under section 60(2) of the Act, there is a presumption that the facts mentioned in the endorsements referred to in section 59 have occurred as therein mentioned. The endorsement by the Sub-Registrar of the payment of consideration of the sale-deed in his presence is prima facie evidence that the amount was actually paid by the agent of the plaintiff to Vithaldas."

Once we find that there is presumption of the entry made under section 58(c) because of the provisions of section 60(2) of the Indian Registration Act 1908, it would be for the party who wants to allege contrary to prove his contention. In this respect, apart from the bare word of the plaintiff, no evidence is led to rebut the presumption which has arisen under section 60(2). It is very difficult to believe that a Registrar would make an endorsement about the payment of money in his presence without the actual occurrence of the fact. The fact about the payment of the consideration has also been deposed by Shrirang Shinde (DW 3) (exhibit 110). In the light of this evidence, the bare denial of the receipt of any consideration by the plaintiff contrary to the statutory presumption would be of no avail and would not be sufficient to rebut the statutory presumption.

17. This takes us to another submission of Shri Solshe about the inadequacy of the consideration. It is true that in plaintiff's oral testimony she has deposed that one of the lands known as 'Mala' (survey No. 37) would have fetched price at the rate of Rs. 10,000/- to Rs. 11,000/- per acre and the another land known as 'Dhamora' (survey No. 71 /A/1) would have fetched price at the rate of Rs. 6,000/- to Rs. 7,000/- per acre. But apart from her statement, there is hardly any evidence about the normal price which these lands would have fetched had there been a contract with anybody else other than the defendant Loknathsing. We will also post ourselves with the facts that the original contract about one of the lands has taken place in the year 1959 and the fact that both the lands are admittedly in possession of Loknathsing since long, factor which certainly weighs in determination of price. Taking benefit of the mode of cultivation mentioned as 3 in the revenue record, Shri Loya wanted to submit that Loknathsing was a tenant over the land. We are not prepared to accept this contention since this will have to be decided by the proper forum and not in a civil suit. Whatever may be the nature of the possession, nevertheless the fact remains that Loknathsing was in possession of these lands. The lands are situated at village Wangi. Plaintiff-widow is residing in Gangakhed. The lands are in possession of the purchaser and these facts are bound to have some effect in the price to be agreed between the parties. Even if we assume that some concession was given in the price by plaintiff to Loknathsing taking into consideration that he had helped her to regain her property, it would not prove by itself that the deal was unconscionable. Plaintiff has not made any reference about the two agreements in the plaint and denied their execution which were proved by the witnesses examined in the case.

18. If the contract is unconscionable meaning thereby which shocks the conscience of a common prudent man, then the burden would shift on the defendant to prove that Loknathsing had not exerted undue influence. As already observed, the price which was paid and the fact that the first agreement in respect of one land was executed about 18 years before the actual date of the same and the fact that both these lands are already in possession of the purchaser would conclude that there is no material before the Court to hold that the contract is unconscionable. There were counter arguments by the appellants and the respondent in the case as to who should prove that the contract is unconscionable. The words in the statute that "on the face of it if it is unconscionable" would indicate that the legislature wanted that the Court dealing with the matter should examine the contract in the light of the circumstances placed before it and if on the face of it without going into the niceties, if it is unconscionable, then require the proof from the party defending the contract. The question of onus probandi is not material in such cases. This question does not require any further consideration since we do not feel that the contract in dispute can be said to be unconscionable.

19. For all the foregoing reasons, we allow the appeal. The judgment and decree passed by the learned Civil Judge (S. D.), Parbhani, on 27th of March 1985 in Special Civil Suit No. 23 of 1979 is hereby set aside. The said Special Civil Suit No. 23 of 1979 stands dismissed. However, looking to the facts and circumstances of the case, we direct the parties to bear their own cost throughout.

Appeal allowed.