R. Janakiammal vs S.K. Kumarasamy(Deceased) through Legal Representatives and Others

Hindu law: Joint Hindu Family – Under Hindu Law, any member of the joint family can separate himself from joint family – The intention of the parties to terminate the status of joint family is a relevant factor to determine the status of Hindu Undivided Family – In the instant case, real intendment of three branches to partition their properties was not that they did not want Hindu Undivided Family to continue rather the said partition was with object to get away from application of Land Ceiling Act, 1961 – Partition Deed dated 07.11.1960 being a registered Partition Deed between three branches, the same cannot be ignored – Properties admittedly were divided in three branches by the said partition – However even after 07.11.1960, the family continued as a Joint Family – There was reunion between three brothers to revert to the status of Joint Hindu Family, which is amply proved from the acts and conducts of the parties subsequent to 07.11.1960 – The purchase of various immovable properties in the names of the three branches clearly indicated the intention that all the three branches were joint and they were purchasing the properties in the name of all the three branches – Plaintiff never admitted the agreement dated 08.03.1981 or alleged partition of 08.03.1981 – It is, thus, clear that parties remained joint and properties standing in the names of three branches remained joint till the consent decree was passed on 06.08.1984 – Thus, in the year 1979 when residential property of Tatabad was obtained in the name of defendant No.1, all three branches were part of the joint Hindu family and the house property purchased in the name of one member of joint Hindu family was for the benefit of all – Both the Courts below although accepted the partition dated 18.03.1981 as pleaded by D-1 but erred in not considering the consequence of such pleading – When partition of all immovable and movable properties is claimed on 08.03.1981, the conclusion is irresistible that the family was joined till then – Thus, the theory set up by D-1 that all the three branches were separate after 07.11.1960 is denied/belied by claim of partition on 08.03.1981. Partly allowing the appeals, the Court

HELD: 1.1 Order XXIII Rule 3 provides for compromise of suit. In Rule 3 amendments were made by Act No. 104 of 1976 by which a proviso and an explanation was added. By the same amendment Act No.104 of 1976, a new Rule, i.e., Rule 3A was added providing that no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful.” [Paras 39, 40][355-E; 356-B-C]

1.2 Determination of disputes between persons and bodies is regulated by law. The legislative policy of all legislatures is to provide a mechanism for determination of dispute so that dispute may come to an end and peace in society be restored. Legislative policy also aims for giving finality of the litigation, simultaneously providing higher forum of appeal/revision to vend the grievances of an aggrieved party. Rule 3A which has been added by above amendment provides that no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful. At the same time, by adding the proviso in Rule 3, it is provided that when there is a dispute as to whether an adjustment or satisfaction has been arrived at, the same shall be decided by the Court which recorded the compromise. Rule 3 of Order XXIII provided that where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise, the Court shall order such agreement or compromise to be recorded and pass a decree in accordance therewith. Rule 3 uses the expression “lawful agreement or compromise”. The explanation added by amendment provided that an agreement or a compromise which is void or voidable under the Indian Contract Act, 1872, shall not be deemed to be lawful.” [Para 41][356-C-G]

1.3 Reading Rule 3 with Proviso and Explanation, it is clear that an agreement or compromise, which is void or voidable, cannot be recorded by the Courts and even if it is recorded the Court on challenge of such recording can decide the question. The Explanation refers to Indian Contract Act. The Indian Contract Act provides as to which contracts are void or voidable. Section 10 of the Indian Contract Act provides that all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. A consent when it is caused due to coercion, undue influence, fraud, misrepresentation or mistake is not free consent and such agreement shall not be contract if free consent is wanting. A conjoint reading of Sections 10, 13 and 14 of Indian Contract Act indicates that when consent is obtained by coercion, undue influence, fraud, misrepresentation or mistake, such consent is not free consent and the contract becomes voidable at the option of the party whose consent was caused due to coercion, fraud or misrepresentation. An agreement, which is void or voidable under the Indian Contract Act, shall not be deemed to be lawful as is provided by Explanation to Rule 3 of Order XXIII. [Paras 42, 43, 44][356-G-H; 357-A, D; 358-A-B]

1.4 It is clear from the plaint that plaintiff pleaded that compromise recorded on 06.08.1984 was not lawful compromise having been obtained by fraud and misrepresentation. The plaintiff’s case was that they were represented by D1 that the compromise is being entered only to save the family property since the plaintiff has given personal guarantee to the Punjab National Bank for obtaining loan for Vasudeva Mills. Pleadings clearly make out the case of the plaintiff that the consent which he gave for compromise by signing the compromise was not free consent. The compromise, thus, become voidable at the instance of the plaintiff. Rule 3A bars the suit to set aside the decree on the ground that compromise on which decree was passed was not lawful. The word “lawful” has been used in Rule 3 and in the Explanation of Rule 3 states that “an agreement or compromise which is void or voidable under the Indian Contract Act,1872 shall not be deemed to be lawful……………….;” Thus, the bar under Rule 3A shall be attracted if compromise on the basis of which decree was passed was void or voidable. [Paras 47, 48, 49][359-A-E]

Banwari Lal v. Chando Devi (Smt.) though LRs. and Anr. (1993) 1 SCC 581 : [1992] 3 Suppl. SCR 524 ; Pushpa Devi Bhagat (Dead) Through LR. Sadhna Rai (Smt.) v. Rajinder Singh and Ors. (2006) 5 SCC 566 : [2006] 3 Suppl. SCR 370 ; R. Rajanna v. S.R. Venkataswamy and Ors. (2014) 15 SCC 471 : [2014]

14 SCR 535; Triloki Nath Singh v. Anirudh Singh (Dead) through Legal Representatives and Ors. (2020)

6 SCC 629 – relied on.

1.5 A party to a consent decree based on a compromise to challenge the compromise decree on the ground that the decree was not lawful, i.e., it was void or voidable has to approach the same court, which recorded the compromise and a separate suit challenging the consent decree has been held to be not maintainable. In Suit No.1101 of 1987, the plaintiff prayed for a declaration declaring that the decree passed in O.S. No. 37 of 1984 is sham and nominal, ultravires, collusive, unsustainable invalid, unenforceable and not binding on the plaintiffs. On the basis of grounds which have been taken by the plaintiff in Suit No.1101 of 1987, the only remedy available to the plaintiff was to approach the court in the same case and satisfy the court that compromise was not lawful. There was no error in the judgment of trial court and High Court holding that Suit No.1101 of 1987 was barred under Order XXIII Rule 3A. The compromise decree dated 06.08.1984, thus, could not have been questioned in Suit No. 1101 of 1987. [Paras 55 and 56][364-C-H]]

2.1 The case of the appellant is that the partition deed dated 07.11.1960 was entered between three brothers to save the properties from land ceiling laws. The relevant date under the Land Ceiling Act was 07.04.1960 on which date the extent of properties in hands of a person has to be determined and since three brothers, who consisted members of joint family on the relevant date had more than the land which was permitted to a person, a partition was entered to save the properties from land ceiling laws. This argument was rejected by the trial court holding that it has not been proved that land ceiling laws in any manner affected the extent of land in the hands of three brothers. [Para 74][369-H; 370-A-B]

2.2 Section 5 of the Land Ceiling Act provide for ceiling area. According to sub-section (1)(a) of Section 5, the ceiling area in the case of every person and in the case of every family consisting of not more than five members was 30 standard acres. Figure of 30 standard acres was subsequently reduced to 15 standard acres by Tamil Nadu Act No. 37 of 1972. Section 5(1)(b) further provided that ceiling area in the case of every family consisting of more than five members shall be 30 standard acres together with an additional 5 standard acres for every member of the family in excess of five. In event, the ceiling area is determined treating the Hindu Undivided Family, joint family consisting of three brothers, the ceiling area shall be 30 standard acres by which 5 acres additional for every member of the family in excess of five. The land which was possessed by the three brothers in the year 1960 was more than 86.52 acres, which extent was received by the three brothers in 1953 partition. Thereafter three brothers have acquired further land. In case, three brothers before 07.04.1960 partition their joint family, then each person will be entitled to 30 acres. Thus, partition of the properties among three brothers was clearly beneficial to the properties possessed by the three brothers. The view of the trial court that it is not proved that any benefit under the Ceiling of Land Act could have been obtained by three brothers is clearly untenable. The view expressed by the trial court was not after examining the provisions of Act, 1961. Further the statement in the partition that three brothers have already divided the immovable properties on 01.04.1960 clearly was with intent to get away from Act, 1961 since the relevant date under the Ceiling Act was 07.04.1960. [Para 75][370-D-H]

2.3 Under Hindu Law, any member of the joint family can separate himself from joint family. The intention of the parties to terminate the status of joint family is a relevant factor to determine the status of Hindu Undivided Family. It is clear that real intendment of three branches to partition their properties was not that they did not want Hindu Undivided Family to continue rather the said partition was with object to get away from application of Ceiling Act, 1961. The intention of the parties when they partitioned their properties in the year 1960 is a relevant fact. [Para 76][371-A-B]

2.4 However, the Partition Deed dated 07.11.1960 being a registered Partition Deed between three branches, the same cannot be ignored. Properties admittedly were divided in three branches by the said partition. The question is as to whether after 07.11.1960, the family continued as a Joint Family or the status of joint family came to an end on 07.11.1960. The case of the appellant which was also pressed by the High Court was that even if partition dated 07.11.1960 is accepted; the parties lived in a joint family and continued their joint family status. The contention advanced by the appellant was that there was reunion between three brothers to revert to the status of Joint Hindu Family, which is amply proved from the acts and conducts of the parties subsequent to 07.11.1960. The concept of reunion in Hindu Law is well known. Hindu Joint Family even if partitioned can revert back and reunite to continue the status of joint family. [Paras 77 and 78][371-C-E]

Mulla on Hindu Law, 22nd Edition – referred to. Mukku Venkataramayya v. Mukku Tatayya and Ors. AIR 1943 Mad. 538; M/s. Paramanand L. Bajaj,

Bangalore v. The Commissioner of Income Tax,

Karnataka, II, Bangalore, (1981) SCC Online

Karnataka 131 J; Bhagwan Dayal v. Reoti Devi AIR 1962 SC 287: [1962] 3 SCR 440; Anil Kumar Mitra and Ors. v. Ganendra Nath Mitra and Ors. (1997) 9 SCC 725 [1996] 9 Suppl. SCR 338; Palani Ammal v. Muthuvenkatacharla Moniagar and Ors. AIR 1925 PC 49 – referred to

3.1 The ancestral house of the parties was at Helmet, Sedapalayam, Village Karumathampaty where three brothers alongwith their father used to live. DW2 in her statement has also stated that after her marriage, she lived at ancestral house at Sedapalayam. Further the three brothers in the year 1963 purchased the house site at Hemlet Somanur and constructed a new house where three brothers with their families shifted and lived at Somanur which became the new home of the Joint Family consisting of three brothers. The new house was constructed after purchasing the land in the year 1963 and the families of the three brothers started living at about in 1964, which clearly indicate that intention of all the brothers was to live jointly and continue as Joint Hindu Family. After partition dated 07.11.1960, three branches have purchased several immovable properties together. [Para 85][379-D-F]

3.2 The three branches continued joint business by establishing firms and companies which was carried by joint family in the partnership or by private company. It was only the members of the family, who were shareholders and directors. The purchase of various immovable properties in the names of the three branches clearly indicate the intention that all the three branches are joint and they are purchasing the properties in the name of all the three branches. After the death of Rangasamy in the year 1967, it was defendant No.1, who took the reins of the family being the eldest. The plaintiff and defendant No.10, sons of Ranagasamy were very young at the time when their father died and thereafter they were under the guidance and control of D-1 and the materials on the record indicate that it was D-1 under whose guidance, all businesses were carried out. Even the Suit No.37 of 1984 which was filed for partition of properties was at the instance of defendant No.1, which pleadings have been made by the plaintiff of that suit when he filed written statement in Suit No. 1101 of 1987. The plaintiff of Suit No.37 of 1984, D-6 in his written statement in Suit No. 1101 of 1987 has clearly stated that he filed the Suit No.37 of 1984 at the instance of defendant No.1, which fact has also been noted in paragraph 9 of the trial court’s judgment. [Para 86][380-C-F]

3.3 In suit No.1101 of 1987, it was only D-1, who filed the written statement and appeared in the witness box. D-4 neither filed written statement nor came to the witness box. It was D-1 who was pleading that joint family came to the an end after partition dated 07.11.1960. D-1 in his written statement and in his oral statement before the court has come up with the case that there was partition of the properties on 08.03.1981 and an agreement was entered between the three branches and compromise decree dated 06.08.1984 was passed to implement the agreement which was entered in the year 1981. [Para 87][380-G-H; 381-A]

3.4 The agreement dated 08.03.1981 was denied by the plaintiff. The plaintiff’s case was that at no point of time, there was any agreement entered between parties in the year 1981 to divide the properties standing in the names of three branches. The agreement dated 08.03.1981 was not filed by D-1 in the evidence. The agreement was not filed nor exhibited by the defendant, D-1. In the written statement which was filed by D-1 in O.S. No.37 of 1984, no plea was taken regarding agreement dated 08.03.1981. It was for the first time in the written statement filed by D-1 in suit No.1101 of 1987 that mention of agreement dated 08.03.1981 was made. Neither any agreement dated 08.03.1981 was filed or proved nor there is any other evidence on record to prove the division of properties between three branches in the year 1981. [Paras 91, 92][382-G-H; 383-A-B]

3.5 It is the case of the defendant No.1 that the compromise decree dated 06.08.1984 is nothing but implementation of agreement dated 08.03.1981. It is, thus, clear that the case of D1 is that there was partition of all properties standing in the names of three branches and allocated to different branches on 08.03.1981, which has been subsequently implemented by consent decree dated 06.08.1984. As per the case of defendant, the Vasudeva Textiles Mills was given to the branch of Rangasamy, property at Coonoor was taken by D1 and properties at Somnur by D-4. [Para 93][383-B-C]

3.6 When the D-1 comes with the case that there was partition on 08.03.1981 of all immovable properties standing in the names of three branches, which was implemented on 06.08.1984, the conclusion is irresistible that family was joint and had the three branches were not part of joint Hindu family, there was no occasion for attempting any partition on 08.03.1981 as claimed by D-1. The fact that defendant No.1 is coming with the case that there was partition on 18.03.1981 itself proves that three branches were joint till then as per case of D-1 himself. [Para 94][383-D-E]

3.7 Plaintiff never admitted the agreement dated 08.03.1981 or alleged partition of 08.03.1981, it is, thus, clear that parties remained joint and properties standing in the names of three branches remained joint till the consent decree was passed on 06.08.1984. Thus, in the year 1979 when residential property of Tatabad was obtained in the name of defendant No.1, all three branches were part of the joint Hindu family and the house property purchased in the name of one member of joint Hindu family was for the benefit of all. Both the Courts below although accepted the partition dated 18.03.1981 as pleaded by D-1 but erred in not considering the consequence of such pleading. When partition of all immovable and movable properties is claimed on 08.03.1981, the conclusion is irresistible that the family was joined till then. The theory set up by D-1 that all the three branches were separate after 07.11.1960 is denied/belied by claim of partition on 08.03.1981.[Paras 95, 96, 97][383-E-H]

3.8 Both the trial court and High Court have given much emphasis on the fact that three branches were filing separate Income-Tax Returns and Wealth Tax Returns after 1967. An individual member of joint Hindu Family can very well file his separate Returns both under the Income Tax Act as well as Wealth Tax Act and filing of such Returns was not conclusive of status of the family. The plaintiff ’s case throughout was that family continued to be joint after 07.11.1960 and D-1 who alone had filed the written statement and appeared in the witness box having come with the case of partition on 08.03.1981 which he claims to be implemented on 06.08.1984 by Compromise Decree, it is proved that family was joint at least till then, i.e., 08.03.1981 or 06.08.1984. Thus, in the year 1979, when the Tatabad residential property was acquired, the three branches were joint. [Para 98][384-A-C]

3.12 The Tatabad residential property was for the benefit of all the three branches which is further proved from the fact that the consideration for the said amount was not paid by DW-1 from his separate account or in cash. The amount was drawn from the private limited company Swamy and Swamy Plantation Private Limited in which all the three branches were shareholders and Directors. The Swamy and Swamy Plantation Company had not purchased the residential property at Tatabad for the company. The Swamy and Swamy plantation private company is not the owner of the residential property and the residential property at Tatabad is a joint family property for the benefit of all the three branches. [Para 99][384-C-E]

5. All three branches have equal share in the Tatabad residential property, i.e., Item No.X of Schedule ‘B’ of plaint in Original Suit No.1101 of 1987. This residential property being not a part of O.S.No.37 of 1984, there is no bar in seeking partition of the said property by the plaintiff. Accordingly, plaintiff/defendant No.7, defendant No.1 and defendant No.4 are entitled to 1/3 rd share jointly in the aforesaid Item No.X of Schedule ‘B’ of the suit property. [Para 100][384-E-G]