Page 1 “REPORTABLE”

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1938 OF 2014

(Arising out of SLP (Civil) Nos. 15252 of 2006)

Pratima Chowdhury …Appellant

Versus

Kalpana Mukherjee & Anr. ...Respondents

J U D G M E N T

JAGDISH SINGH KHEHAR, J .

1.Orchestra Co-operative House Society Limited (hereinafter

referred to as ‘the Society’) raised flats at 48/IE, Gariahat Road,

Calcutta – 700019. Indirani Bhattarcharya became a member of the

Society on 12.1.1987. She was issued share certificates bearing nos.

0047 and 0048. Based on the above membership she was allotted flat

no. 5D for a consideration of Rs. 4 lakhs. The above flat measuring 900

sq. ft. comprised of three bed rooms, two bath rooms, one drawing-

cum-dinning room, a kitchen and verandah on the fourth floor. In

addition to the above, she was allotted one covered garage space on

the ground floor. The transfer of the flat no. 5D by the Society to

Indirani Bhattacharya was approved by the Deputy Registrar, Co-

operative Societies.

1

Page 2 2.On 27.3.1991, Indirani Bhattacharya submitted her resignation

from the Society in favour of Pratima Chowdhury (i.e., the petitioner

herein). On 15.4.1991, Indirani Bhattacharya executed an agreement

for transfer of flat no. 5D to Pratima Chowdhury subject to the consent

of the Society and the approval of the Deputy Registrar, Co-operative

Societies, for a consideration of Rs. 4 lakhs. The Society having

consented to the request of Indirani Bhattacharya sought the approval

of the Deputy Registrar, Co-operative Societies through a letter dated

29.4.1991. In this behalf it would also be relevant to mention that Board

of Directors of the Society had resolved in its meeting held on

16.2.1992, to accept the resignation of Indirani Bhattacharya, as also,

the consequential transfer of the membership of the Society and the

ownership of the flat to the name of Pratima Chowdhury. In the above

resolution, the name of Pratima Chowdhury as a member of the Society

was approved with effect from 9.1.1992. The Secretary of the Society

informed Pratima Chowdhury on 17.2.1992, that her membership to the

Society, as also, the transfer of flat no. 5D to her name, had been

approved by the Deputy Registrar, Co-operative Societies.

3. The facts available on the records reveal that Partha Mukherjee

(son-in-law of the petitioner’s sister, and son of the respondent)

occupied the petitioner’s flat. Partha Mukherjee was employed as

Regional Sales Manager with Colgate Palmolive (India) Limited. On

9.3.1992, Colgate Palmolive (India) Limited, confirmed having taken flat

no. 5D on lease and license, for a period of three years (with effect from

1.4.1992), for the residence of Partha Mukherjee. The pleadings also

2

Page 3 reveal, that with effect from 1.4.1992, Colgate Palmolive (India) Limited,

took the aforesaid flat on a monthly rent of Rs. 5,000/-. The above said

monthly rent, was deposited in the joint account of the petitioner

Pratima Chowdhury and Partha Mukherjee.

4. On 29.6.1992, the petitioner Pratima Chowdhury addressed a letter

to the Secretary of the Society, requesting the Society to transfer flat no.

5D to the name of her nominee Kalpana Mukherjee. The letter dated

29.6.1992 of Pratima Chowdhury, made some express factual

disclosures. Firstly, that she was not in good health. Secondly, that

she was not in a position to move to Calcutta from Bombay in the near

future. Thirdly, that Kalpana Mukherjee was already residing in the flat

in question along with Partha Mukherjee. Fourthly, that above nominee

Kalpana Mukherjee was her close relative. In addition to the request of

transfer of flat no. 5D in favour of her nominee Kalpana Mukherjee,

Pratima Chowdhury also informed the Society through her letter dated

29.6.1992, that all municipal taxes and service charges in connection

with the above flat should be collected from Kalpana Mukherjee.

5. Pratima Chowdhury then addressed another letter dated 11.11.1992,

to the Secretary of the Society, reiterating her request made in the

previous letter dated 29.6.1992 wherein she again expressed clearly

that the transfer being sought by her, was without any monetary

consideration.

6. It was pointed out in letter dated 11.11.1992, that the formal request

for the transfer was only being made, in order to comply with the rules

3

Page 4 regulating such transfer, and also, to avoid future complications.

Consequent upon the aforesaid deliberations, Pratima Chowdhury

executed an agreement dated 13.11.1992, transferring her right, title

and interest in the flat no. 5D. On the same day as the aforesaid

agreement was executed, Kalpana Mukherjee moved an application (on

13.11.1992).

7. The Board of Directors of the Society in their meeting held on

14.2.1993, resolved to accept the resignation of Pratima Chowdhury,

and to accept the membership of Kalpana Mukherjee (in place of

Pratima Chowdhury), and to seek the approval of the Deputy Registrar,

Co-operative Societies for the transfer of flat no. 5D to the name of

Kalpana Mukherjee, on the basis of letters of Pratima Chowdhury dated

11.11.1992 and 13.11.1992. Accordingly, the Secretary of the Society

addressed a letter dated 10.3.1993 to the Deputy Registrar, Co-

operative Societies, for the approval of the decision of the Board of

Directors (of the Society, dated 14.2.1993).

8. On 23.4.1993, Pratima Chowdhury wrote a letter to the Senior

Commercial Executive, of the Calcutta Electric Supply Corporation

(South Region Office) requesting him to transfer the electricity-supply

meter of flat no. 5D to the name of Kalpana Mukherjee. The instant

letter dated 23.4.1993, is also disputed by Pratima Chowdhury. She

has even disputed her signature on the said letter. She also filed a first

information report at the Gariahat Police Station, Kolkata, complaining

that her signature on the above letter was forged.

4

Page 5 9. The Assistant Registrar, Co-operative Societies raised certain

objections on the request of the Society for transfer of flat no. 5D from

the name of Pratima Chowdhury to the name of Kalpana Mukherjee. In

this behalf the Assistant Registrar, Co-operative Societies informed the

Secretary of the Society, that the application of Kalpana Mukherjee for

membership had not been submitted in the proper format. It was also

pointed out, that the original affidavit had not been appended to the

application. Lastly, it was brought out, that the Salary Certificate,

Income Tax Clearance Certificate and Professional Tax Certificates had

not been appended to the application of Kalpana Mukherjee, for the

transfer of the flat in her name. On 22.9.1993, the Secretary of the

Society provided all the required documents sought by the Department

of the Co-operative Societies.

10. Partha Mukherjee was transferred by his employer Colgate

Palmolive (India) Limited, from Calcutta to Bombay. Consequently,

Colgate Palmolive (India) Limited terminated the agreement executed

by it with Pratima Chowdhury on 19.10.1993, with immediate effect. In

the letter dated 19.10.1993, Colgate Palmolive (India) Limited required

Partha Mukherjee to hand over vacant possession of flat no. 5D to

Pratima Chowdhury, after refund of security. On 21.10.1993, Kalpana

Mukherjee, from her own account, deposited rent in the Bank account of

Pratima Chowdhury. On 28.10.1993, Partha Mukherjee addressed a

letter to P.R. Keswani, Company Secretary of Colgate Palmolive (India)

Limited, along with a receipt bearing no. 9893, depicting refund of the

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Page 6 security deposit (of Rs. 60,000/-). The aforesaid refund was shown to

have been made by Pratima Chowdhury.

11. On 16.12.1994, 500 shares of Tata Chemicals Limited, 50 shares

of Siemens, 500 shares of Indian Aluminium and 100 shares of I.T.C.

Hotels, standing in the joint names of Partha Mukherjee and Sova

Mukherjee (wife of Partha Mukherjee) were transferred to the name of

Pratima Chowdhury. According to the petitioner Pratima Chowdhury,

the above transfer of shares was in lieu of loans extended by her to

Partha Mukherjee. However, according to Kalpana Mukherjee, the

transfer of the above shares, constituted consideration paid on her

behalf (by her son Partha Mukherjee) to Pratima Chowdhury in lieu of

the transfer of flat no. 5D.

12.Pratima Chowdhury wrote a letter dated 28.2.1995 to the

Secretary of the Society, that she had not received any reply to her

letter dated 11.11.1992. She also informed the Secretary of the

Society, that she had decided to return to Calcutta permanently.

Accordingly, she informed the Secretary of the Society, that her request

for transfer of her membership to the name of Kalpana Mukherjee, be

treated as withdrawn. It is the case of Pratima Chowdhury, that the

Society never responded to her letter dated 28.2.1995. It is also her

case, that her letter dated 28.2.1995 was never forwarded by the

Society, to the Department of Co-operative Societies.

13. On 8.3.1995, the Society approached the Deputy Registrar, Co-

operative Societies, seeking approval for the admission of Kalpana

6

Page 7 Mukherjee as a member of the Society (in place of Pratima

Chowdhury). On 13.3.1995, the Deputy Registrar, Co-operative

Societies conditionally approved the membership of Kalpana

Mukherjee. Accordingly, on 13.3.1995 itself the shares of Pratima

Chowdhury were transferred to the name of Kalpana Mukherjee. On

22.3.1995, Pratima Chowdhury addressed a letter to the Deputy

Registrar, Co-operative Societies, with a copy to the Chairman of the

Society. In the above letter, the Deputy Registrar, Co-operative

Societies was requested to direct the Society to withdraw the offer of

transfer of her membership to Kalpana Mukherjee. It was also

requested, that the application made by Kalpana Mukherjee for transfer

of share certificates in her name, be not approved. The instant letter

dated 22.3.1995, depicts the fact that Pratima Chowdhury was unaware

of the deliberations of the Society, as also, the approval (of the

deliberations of the Society), by the Deputy Registrar, Co-operative

Societies, on 13.3.1995. In pursuit of the same objective, Pratima

Chowdhury wrote another letter dated 28.3.1995, to the Secretary of the

Society. She enclosed therewith, the letter which she had addressed to

the Deputy Registrar, Co-operative Societies dated 22.3.1995. Therein,

she again reiterated, that her request for transfer of membership in

favour of Kalpana Mukherjee be treated as withdrawn. In order to

consider the request made by Pratima Chowdhury in her letter dated

22.3.1995 (to the Deputy Registrar, Co-operative Societies) and the

letter dated 28.3.1995 (to the Secretary of the Society); the Society

convened a meeting of the Board of Directors on 2.4.1995. Rather than

7

Page 8 considering the issue on merits, the Board of Directors resolved, that it

had no legal competence to restore the membership of the Society, as

also, the retransfer of the ownership of the flat no. 5D, to Pratima

Chowdhury. Having so resolved, the Secretary of the Society

forwarded a copy of the resolution dated 2.4.1995, to the petitioner on

10.4.1995.

14. At this juncture, it would be relevant to mention, that the Board of

Directors of the Society approved the transfer of flat no. 5D (comprising

of three bed rooms, two bath rooms, one drawing-cum-dinning room,

one verandah and one kitchen on the fourth floor, located at no. 48/IE,

Gariahat Road, Calcutta - 700019 to the name of Kalpana Mukherjee.

In addition to the aforesaid flat, the ownership of Pratima Chowdhury

also comprised of a covered garage space, on the ground floor. The

same were not mentioned in the clearances dated 14.2.1993 (by the

Board of Directors of the Society) and 13.3.1995 (by the Deputy

Registrar, Co-operative Societies). Consequently based on the

agreement dated 25.4.1995 between Kalpana Mukherjee and the

Society, the said garage space was also subsequently transferred to the

name of Kalpana Mukherjee.

15.On 16.4.1995 within two weeks, from the date decision taken by

the Board of Directors (on 2.4.1995) and within one week from the date

of communication thereof to the petitioner (through letter dated

10.4.1995), Pratima Chowdhury addressed a notice dated 16.4.1995,

contesting the validity of the Board of Directors’ Resolution dated

8

Page 9 2.4.1995. The petitioner also assailed the approval of the said transfer

dated 13.3.1995. The Deputy Registrar, Co-operative Societies

referring to the petitioner’s letter dated 28.2.1995 (wherein Pratima

Chowdhury had withdrawn her request for transfer of membership in

favour of Kalpana Mukherjee), wrote a letter dated 31.5.1995 to the

Secretary of the Society. In the letter dated 31.5.1995, the Deputy

Registrar, Co-operative Societies also highlighted the fact that, the

Society had not brought the letter dated 28.2.1995 to the notice of

Deputy Registrar, Co-operative Societies, at the time of seeking

approval of the Co-operative Department. The Secretary of the Society

was accordingly directed, to take a decision on the matter, and to

forward the same to the Deputy Registrar, Co-operative Societies.

Being alive of the letter dated 31.5.1995, which was addressed by the

Deputy Registrar, Co-operative Societies to the Secretary of the

Society, the petitioner through her letter dated 13.6.1995 informed the

Secretary of the Society, that the withdrawal letter dated 28.2.1995

addressed by her was received by the Secretary of the Society, and

further that the same had been duly acknowledged on 6.3.1995. The

petitioner highlighted the fact, that the approval of the Deputy Registrar,

Co-operative Societies should not have been sought (by the Secretary

of the Society), after the receipt of the petitioner’s communication dated

28.2.1995.

16.Since, the petitioner was not communicated any determination,

by the concerned authorities. She addressed a notice on 9.9.1995,

calling upon the Secretary of the Society, to deliver the possession of

9

Page 10 the flat no. 5D, along with the share certificates, to her within seven

days of the receipt of the said notice. On 21.11.1995, the Society

denied all the allegations made by the petitioner against the Society

(contained in the notice). On the claim of retransfer of the shares and

flat made by the petitioner, the Society responded by asserting, that the

shares had been transferred to the name of Kalpana Mukherjee, and on

the basis thereof flat no. 5D also had been transferred in her name,

thereupon, the Society did not have any legal authority to

restore/retransfer the same to the name of the petitioner. On

19.12.1995, the Deputy Registrar, Co-operative Societies also informed

Pratima Chowdhury, that the transfer of her shares and flat in favour of

Kalpana Mukherjee had been completed, and since the Society had

resolved on 2.4.1995 that it had no legal competence to cancel the

same, nothing could be done in the matter.

17.Dissatisfied with the determination of the Co-operative Societies,

as also, the denial of the consideration at the hands of the Deputy

Registrar, Co-operative Societies, the petitioner filed Dispute Case No.

29/RCS of 1995-96. The aforesaid dispute case was adjudicated upon

by D.K. Ghosh in his capacity as Arbitrator.

17(i)During the course of the above determination, Kalpana

Mukherjee (who was impleaded as respondent no. 1) filed a reply on

22.2.1996 which deserves a special mention. Firstly, according to the

reply filed by Kalpana Mukherjee flat no. 5D was purchased by Partha

Mukherjee in the name of Kalpana Mukherjee (mother of Partha

10

Page 11 Mukherjee). The above flat was purchased for a total consideration of

Rs. 4,29,000/-. The said consideration was paid by way of transfer of

shares, in the name of Partha Mukherjee to the name of Pratima

Chowdhury. Highlighting the above factual position is important

because the entire paper work pertaining to the transfer of flat no. 5D,

from the name of Pratima Chowdhury to the name of Kalpana

Mukherjee indicates, that the above transfer was without any monetary

consideration, whereas stands adopted by Kalpana Mukherjee was that

as a matter of fact the said transfer was on a consideration of Rs.

4,29,000/-. Secondly, according to Kalpana Mukherjee (respondent no.

1), Pratima Chowdhury’s letter dated 28.2.1995 was afterthought. It is

therefore, that Kalpana Mukherjee in her reply emphasized that the

letter dated 28.2.1995, was only a scheme devised by Pratima

Chowdhury to wriggle out of the transaction.

17(ii)The Secretary of the Society filed separate written reply to the

case filed by Pratima Chowdhury. In its reply the Society supported the

transfer of shares, as also, the transfer of flat no. 5D to the name of

Kalpana Mukherjee. The Society clearly brought out in their reply, that

Pratima Chowdhury through her letter dated 29.6.1992 had informed

the Society, that Kalpana Mukherjee was in occupation of the flat, and

as such, maintenance charges for the flat should be recovered from her.

Furthermore, according to the Society, the transfer of the shares, as

also, of flat no. 5D to the name of Kalpana Mukherjee was approved at

the request of Pratima Chowdhury, made through her letter dated

11.11.1992. It was submitted, that the aforesaid request was

11

Page 12 considered by the Department of Co-operative Societies, which

approved the resignation of Pratima Chowdhury and the consequential

transfer of membership vide Resolution of the Board of Directors of the

Society dated 14.2.1993. The above resolution had been forwarded by

the Secretary of the Society, to the Deputy Registrar, Co-operative

Societies (by letter dated 10.3.1993), for approval. It was pointed out

that the Deputy Registrar, Co-operative Societies had approved the

Resolution of Board of Directors of the Co-operative Societies on

13.3.1995. Additionally, it was pointed out, that after the approval of the

change of membership to the name of Kalpana Mukherjee, the

petitioner Pratima Chowdhury had required the Senior Commercial

Executive of Calcutta Electric Supply Corporation, to transfer the

electricity-supply meter of flat no. 5D to the name of Kalpana

Mukherjee. According to the Society, the above facts clearly evidenced

the unequivocal intention of Pratima Chowdhury to transfer her shares

and flat no. 5D to the name of Kalpana Mukherjee, which was given due

effect to by the Society after seeking the approval of the Deputy

Registrar, Co-operative Societies. In view of the aforestated factual

position, the Society denied the claim raised by Pratima Chowdhury in

Dispute Case No. 29/RCS of 1995-96.

17(iii)It is also imperative to record herein, that Pratima Chowdhury had

filed rejoinder, to the written statements filed on behalf of Kalpana

Mukherjee and the Society before the Arbitrator. It was pointed out in

the rejoinder, that Partha Mukherjee was married to Sova Mukherjee.

Sova Mukherjee was the daughter of H.P. Roy and Bani Roy (sister of

12

Page 13 the petitioner, Pratima Chowdhury). On account of the above

relationship she had treated Sova Mukherjee as her daughter and

Partha Mukherjee as her son. Consequently on the transfer of Partha

Mukherjee to Calcutta (from Bombay), she allowed him to reside in flat

no. 5D. At the behest of Partha Mukherjee, his employer Colgate

Palmolive (India) Limited entered into a lease agreement with Pratima

Chowdhury on 9.3.1992. Under the lease agreement Pratima

Chowdhury was entitled to rent at the rate of Rs. 5,000/- per month.

The lease agreement was executed for a period of three years, with

overriding condition, that the tenure of lease would coincide with the

tenure of Partha Mukherjee at Calcutta, while in the employment of

Colgate Palmolive (India) Limited. It was also pointed out, that Partha

Mukherjee had opened a joint account along with petitioner Pratima

Chowdhury, for the deposit of rent payable by Colgate Palmolive (India)

Limited. It was also pointed out, that Partha Mukherjee singularly

operated the aforesaid joint account. In his above capacity he

encashed the rent deposited by Colgate Palmolive (India) Limited,

without the knowledge and notice of the petitioner Pratima Chowdhury.

She also asserted in the rejoinder, that she could obtain the details of

the agreement executed with Colgate Palmolive (India) Limited, as also,

the deposits of rent in her joint account with Partha Mukherjee, only

after she had issued a letter to Colgate Palmolive (India) Limited, that

she would not make any claim from the employer of Partha Mukherjee,

on the basis of information supplied. In her rejoinder Pratima

Chowdhury also asserted, that Partha Mukherjee had forced her to sign

13

Page 14 the letter dated 11.11.1992, without disclosing the contents thereof.

The categoric stance adopted by Pratima Chowdhury in her rejoinder

was, that she was not aware of the contents of letter dated 11.11.1992,

and furthermore, Partha Mukherjee had obtain her signature on other

blank papers as well, by falsely informing her that the papers would be

used to explain his stay in flat no. 5D. She also denied having executed

the document dated 13.11.1992, which was allegedly notarized at

Calcutta. In fact she denied her presence at Calcutta on 13.11.1992.

She further stated, that Partha Mukherjee did not remain in employment

of Colgate Palmolive (India) Limited after his transfer to Bombay. It was

also pointed out by her, that on his return to Bombay, Partha Mukherjee

started his independent business in aluminium products. For the said

business Pratima Chowdhury claims to have advanced a loan of Rs.2

lakhs to Partha Mukherjee. The loan stated to have been extended to

Partha Mukherjee was by way of a cheque drawn in favour of Bharat

Aluminium Company, for the supply of raw material for the business of

Partha Mukherjee. She further contended, that Partha Mukherjee also

took loan of Rs. 1,50,000/- from Bani Roy (sister of the petitioner,

Pratima Chowdhury). It was pointed out, that the share certificates held

by Partha Mukherjee jointly with his wife Sova Mukherjee, were

transferred to the petitioner Pratima Chowdhury and her sister Bani Roy

during the year 1994, toward repayment of loans taken from them by

Partha Mukherjee. The position accordingly adopted was, that the

transfer of share certificates did not constitute consideration in lieu of

the transfer of flat no. 5D to Kalpana Mukherjee. A categoric assertion

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Page 15 was made by the petitioner Pratima Chowdhury in her rejoinder, that on

30.11.1992 Partha Mukherjee had no company shares either in his own

name or in the name of his wife Sova Mukherjee (nor in the joint names

of the husband and wife). Accordingly, the plea raised by Kalpana

Mukherjee in her reply (to the dispute case filed by the petitioner

Pratima Chowdhury) was that the transfer transaction was for

consideration, and that, the payment of consideration made by transfer

of shares from the name of Partha Mukherjee to the name of Pratima

Chowdhury, was false. Pratima Chowdhury also denied, that she had

addressed a letter dated 23.4.1993 to the Senior Commercial Executive

of the Calcutta Electric Supply Corporation (South Region Office). She

disputed even her signatures on the above letter, and further asserted,

that she had filed a first information report at the Gariahat Police

Station, Kolkata. On the basis of the factual position noticed

hereinabove, the petitioner Pratima Chowdhury reiterated, that she had

neither surrendered, nor resigned from the membership of the Society,

nor had she sought the transfer of flat no. 5D from her name to the

name of Kalpana Mukherjee.

18.Before the Arbitrator, the petitioner examined three witnesses.

She examined herself as PW1, she examined Vani Ganapati as PW2

and H.P. Roy as PW3. H.P. Roy PW3 (is married to Bani Roy, the

sister of the petitioner Pratima Chowdhury) is the father-in-law of Partha

Mukherjee. Kalpana Mukherjee examined four witnesses in her

defence. She examined herself as DW1, Partha Mukherjee her son

was examined as DW2, the Secretary of the Society was examined as

15

Page 16 DW3 and S.N. Chatterjee, Advocate, who had notarized the documents

referred to above, was examined as DW4.

19.In the process of adjudicating upon the matter, the Arbitrator

framed six issues of fact, and seven issues of law. The same are being

extracted hereunder:

“QUESTIONS OF FACT INVOLVED

i)Whether the Plaintiff tendered resignation on

11.11.92 from the membership of the Society or not.

ii)Was the document executed on 13.11.92 a deed of

transfer of flat or an agreement for transfer of flat.

iii)Whether consideration money was paid by the

Defendant no. 1 to the plaintiff or not.

iv)Whether the payment of consideration money by way

of transfer of shares of companies can be treated as

valid payment of consideration money or not.

v)Whether the Defendant no. 2 accepted the admission

of the membership of the Defendant no. 1 on 14.2.93

or

vi)Whether the flat in question was encumbered due to

existence of lease and license agreement at the

material point of time i.e. on 11.11.92 or on 13.11.92.

“QUESTIONS OF LAW INVOLVED

i)Whether the instant dispute is barred by law of

limitation.

ii)Whether sub-section 9 of section 85 of West Bengal

Co-Operative Societies Act, 1983 was followed in

case of transfer of flat in question of the plaintiff.

iii)Whether section 69 and 70 of the West Bengal Co-

Operative Societies Act 1983 were followed in

respect of admission of membership of the

Defendant no. 1.

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Page 17 iv)Whether Rules 135(3) (a) and 142(1) of West Bengal

Co-Operative Societies Rules 1987 were obeyed or

not.

v)Whether Rule 127(1) of West Bengal Co-Operative

Societies Rules 1987 was obeyed in case of

nomination or not.

vi)Whether the disputed transfer of flat contradicted the

relevant provisions of the Bye-laws of the Defendant

Society or not.

vii)The Doctrine of estoppel as per sections 115 & 116

of the Evidence Act 1872 whether attracted or not.”

20.It is necessary for us to briefly record the factual as also the legal

conclusions drawn by the Arbitrator in his order dated 5.2.1999, while

disposing of the disputes raised by Pratima Chowdhury. Accordingly

we are summarizing the same hereunder:-

(i)In respect of the letter dated 11.11.1992, the Arbitrator observed

that the same was drafted by Partha Mukherjee. This inference came

to be drawn from the manuscript of the original. The Arbitrator pointed

out that the letter dated 11.11.1992, disclosed that the transaction was

not based on passing of monetary consideration, whereas, Kalpana

Mukherjee had expressly asserted in her defence, that the transaction

was executed on an agreed consideration of Rs. 4,29,000/-. Kalpana

Mukherjee had also affirmed, that the aforesaid consideration had

passed from the transferee to the transferor by transfer of shares of

Partha Mukherjee, to the name of Pratima Chowdhury. The Arbitrator

relying on the contents of the letter dated 11.11.1992, recorded that the

letter itself mentioned that the details disclosed therein, were meant

purely to comply with the rules and to avoid future complications. The

17

Page 18 Arbitrator felt, that if Pratima Chowdhury had the intention to sell the flat,

she would have mentioned the same in her letter dated 11.11.1992. It

was also observed by the Arbitrator, that there was no justification for

not mentioning the monetary consideration in the said letter. On the

instant aspect of the matter the Arbitrator was of the view, that the

disclosure of the above consideration would have clearly avoided future

complications (which seem to be the intention for writing the letter dated

11.11.1992). The Arbitrator also pointed out, that the letter dated

11.11.1992 could not be treated as a letter of resignation of the

petitioner Pratima Chowdhury from the Society. In this behalf it was

noticed, that the word “resignation” was completely absent from the text

of the letter dated 11.11.1992.

(ii)In respect of letter dated 13.11.1992 the Arbitrator pointed out,

that the same was notarized by S.N. Chatterjee, Advocate, who was the

son-in-law of the sister of Kalpana Mukherjee (defendant No. 1, before

the Arbitrator). Although, the above notary stated that the letter dated

13.11.1992 was signed by all the parties concerned before him at

Calcutta, he acknowledged, that he did not issue any notarian certificate

in terms of Section 8 of the Notary Act. According to the Arbitrator,

Pratima Chowdhury and all the witnesses appearing for her, had

unequivocally and categorically affirmed, that she (Pratima Chowdhury)

was in Bombay on 11.11.1992, as also, on 13.11.1992. Therefore,

according to the Arbitrator, the question of her appearing before the

notary at Calcutta on 13.11.1992, did not arise at all. According to the

Arbitrator, the registration number of the Society had not been

18

Page 19 mentioned in the document dated 13.11.1992, this according to the

Arbitrator, made the document suspicious because Anil Kumar Sil, the

Secretary of the Society, had mentioned that the above document dated

13.11.1992 was executed at his residence. If the above factual position

was correct, according to the Arbitrator, the registration number would

have been supplied by the Secretary of the Society, and would have

been mentioned in the document itself. Furthermore, according to the

Arbitrator, the document dated 13.11.1992 was in the nature of deed of

transfer, but such transfer would materialize after (and not before) the

consent of the Board of Directors of the Society, and the approval of the

Deputy Registrar, Co-operative Societies. As per the Arbitrator, even

the first step towards transfer of flat no. 5D had not commenced on

13.11.1992, and therefore, the question of allotment and handing over

the possession of the flat to the nominee Kalpana Mukherjee, in

accordance with the terms and conditions of the allotment and bye-laws

of the Society did not arise either in law or in fact, as has been wrongly

stated in the said document dated 13.11.1992. As per the Arbitrator

even the document dated 13.11.1992 was silent on the consideration

for such transfer, despite Kalpana Mukherjee expressing that the above

transfer was for a sale consideration of Rs. 4,29,000/-. According to the

Arbitrator, the possession of Kalpana Mukherjee, was through Partha

Mukherjee, because of the lease and license agreement between

Pratima Chowdhury and Colgate Palmolive (India) Limited (which

commenced on 1.4.1992 and was terminated on 19.10.1993), and not

on the basis of the document dated 13.11.1992. The Arbitrator also

19

Page 20 pointed out, that Kalpana Mukherjee had deposited rent in the account

of Pratima Chowdhury on 21.10.1993, describing it as rent payable to

Pratima Chowdhury. The Arbitrator further observed that Pratha

Mukherjee in his letter dated 28.10.1993 mentioned Pratima Chowdhury

as the landlady of flat no. 5D. Based on the above two instances of

21.10.1993 and 28.10.1993, the Arbitrator was of the view, that the

assertion of transfer of flat no. 5D by Pratima Chowdhury to Kalpana

Mukherjee stood clearly annihilated.

(iii)On the issue of the consideration money, the Arbitrator noted,

that Kalpana Mukherjee had stated in her defence, that the parties had

orally settled the passing of consideration in lieu of flat no. 5D, at

Rs.4,29,000/-. It was also her contention, that the parties had settled

that the above agreed consideration would be paid by Partha Mukherjee

to Pratima Chowdhury by transferring his shares in different companies

to the name of Pratima Chowdhury. But Pratima Chowdhury

categorically denied the passing of any consideration, as she had no

intention to sell the property. She also asserted, that the shares shown

to have been transferred from the name of Partha Mukherjee to the

name of Pratima Chowdhury, were acquired by Partha Mukherjee long

after November, 1992 (when the letters dated 11.11.1992 and

13.11.1992 were issued) i.e. from August, 1993 to April, 1994. The

details of the transfer of shares was disclosed in the award passed by

the Arbitrator as under:-

“COMPANY’S NAME NO. OF SHARES ACQUIRED

20

Page 21 Tata Chemicals Ltd.50 nos. 8.9.93

Tata Chemicals Ltd.450 nos. 27.10.93

Siemens 50 nos. 2.8.93

Indian Aluminium 500 nos. 4.3.94

I.T.C. Hotels 100 nos. acquired with

Mr. H.P. Roy

4.4.94”

The above shares were acquired by Partha Mukherjee jointly, either

with his wife or with his father-in-law, long after the material point of

time. Pratima Chowdhury’s assertion before the Arbitrator, questioning

truthfulness of the assertion of Kalpana Mukherjee, was also based on

the fact that, Kalpana Mukherjee (or Partha Mukherjee) could not have

agreed to transfer to Pratima Chowdhury, what they did not themselves

hold when the transaction was allegedly executed. In order to falsify the

contention of Kalpana Mukherjee (and Partha Mukherjee) that

consideration was paid to Pratima Chowdhury by transfer of shares as

noticed above, it was stated that after Partha Mukherjee was transferred

from Calcutta to Bombay in the year 1993, he did not continue with his

employment with Colgate Palmolive (India) Limited, as he wanted to

start a business of aluminium products with one R.K. Sen in Bombay.

Keeping in view the above objective, Partha Mukherjee took a loan of

Rs. 2 lakhs from Pratima Chowdhury. The above loan was extended by

Pratima Chowdhury by way of cheques drawn in favour of Bharat

Aluminium Company Limited for supply of raw materials for Partha

Mukherjee’s business. It was further contended that Partha Mukherjee

similarly took a loan of Rs. 2 lakhs from his own wife Sova Mukherjee

which was repaid by Partha Mukherjee through cheques (bearing nos.

021865, 021866 and 021867) drawn on the Bank of Baroda. It was

21

Page 22 further pointed that Partha Mukherjee had similarly taken a loan for a

sum of Rs.1.5 lakhs for the same purpose from Bani Roy (his mother-in-

law) which he had still not repaid. It was pointed out, that at the asking

of H.P. Roy (his own father-in-law, father of Sova Mukherjee) Partha

Mukherjee had transferred share certificates standing in his name, and

in the name of his wife Sova Mukherjee, to the name of Pratima

Chowdhury, towards repayment of the abovementioned loans.

Accordingly, the case of Pratima Chowdhury was, that transfer of

shares by Partha Mukherjee to the name of Pratima Chowdhury, was

for a completely different transaction, and had nothing to do with the

allowing of the usage and occupation of the flat, by Kalpana Mukherjee

and Partha Mukherjee.

(iv)On the lease and license agreement the Arbitrator noticed, that

Partha Mukherjee (son of Kalpana Mukherjee), and son-in-law of

Pratima Chowdhury’s sister Bani Roy, was allowed to reside in flat no.

5D, consequent upon his transfer from Bombay to Calcutta (while in the

employment of Colgate Palmolive (India) Limited). It was also noticed,

that the lease and license agreement, was executed by Colgate

Palmolive (India) Limited, at the instance of Partha Mukherjee, for a

monetary consideration of Rs. 5,000/- per month, as rent payable to

Pratima Chowdhury. To deposit the above consideration Partha

Mukherjee opened a joint account in the names of Pratima Chowdhury

and himself. The Arbitrator noted, that when Partha Mukherjee drafted

the letter dated 11.11.1992, he utterly neglected to mention the

subsisting lease and license agreement between Colgate Palmolive

22

Page 23 (India) Limited and Pratima Chowdhury. The Arbitrator also noticed,

that Kalpana Mukherjee did not inform Colgate Palmolive (India) Limited

that flat no. 5D had been transferred from the name of Pratima

Chowdhury to her name. On the contrary the Arbitrator pointed out, that

Kalpana Mukherjee on 21.10.1993, deposited rent in the account of

Pratima Chowdhury, by filing the bank deposit slips. Furthermore, the

Arbitrator noticed, that Partha Mukherjee in his letter dated 28.10.1993

mentioned, that Pratima Chowdhury as the landlady of flat no. 5D.

According to the Arbitrator, the above factual position clearly indicates,

that Kalpana Mukherjee along with her son Partha Mukherjee were

aware, that flat no. 5D belonged to the petitioner, even on

21/28.10.1993. Whereas, they wrongly depicted the transfer thereof

from the name of Pratima Chowdhury to the name of Kalpana

Mukherjee through letter dated 11.11.1992 and 13.11.1992. Since the

lease and license agreement between Colgate Palmolive (India) Limited

and Pratima Chowdhury continued from 1.4.1992 to 19.10.1993, there

was no question of handing over of possession thereof by Pratima

Chowdhury to Kalpana Mukherjee.

(v)On the submissions advanced on behalf of Pratima Chowdhury in

respect of one covered garage space on the premises of the Society is

concerned, the Arbitrator concluded from the documents submitted by

Kalpana Mukherjee, that Pratima Chowdhury had one covered garage

space also. The said covered garage space was not mentioned in the

document dated 13.11.1992. Thereafter, based on an agreement

executed between Kalpana Mukherjee on the one hand and the Society

23

Page 24 on the other, the said garage space was also transferred to the name of

Kalpana Mukherjee on 25.4.1995. According to the Arbitrator, the

instant agreement dated 25.4.1995, had no validity as the same was

neither mentioned in the letter dated 11.11.1992, nor in the document

dated 13.11.1992. And therefore cannot be considered as having the

approval of Pratima Chowdhury. Accordingly, the Arbitrator expressed

the view that the covered garage space must be deemed to have never

been transferred by Pratima Chowdhury to Kalpana Mukherjee. The

Arbitrator also concluded, that the agreement dated 25.4.1995 could not

have been executed in the absence of Pratima Chowdhury. Based on

the above factual position Pratima Chowdhury had also alleged

connivance between Kalpana Mukherjee and the Society, so as to

deprive Pratima Chowdhury of her property.

(vi) Besides the above factual conclusions drawn by the Arbitrator,

the Arbitrator had also concluded that the Society violated various

provisions of the West Bengal Co-operative Societies Act, 1983, and

the rules framed thereunder, as also the bye-laws of the Society. The

Arbitrator summarized the conclusions drawn on the legal issues as

under:-

“Keeping in view of the all above, I am of the opinion that

the transfer of the flat no. 5D of the Defendant No. 2

Society was not done in accordance with laws including

West Bengal Co-Operative Socities Act, Rules, Indian

Contract Act, Transfer of Property Act due to reason at a

glance.

1)Section 85(9), Section 70, Section 69 of West Bengal

Co-Operative Socities Act 1983 have been flouted.

24

Page 25 2)Rule 127(1), Rule 135(3)(a), Rule 142(1) have been

flouted.

3)Bye-laws have been contradicted.

4)No consideration money was paid by the Defendant

no. 1 to the Plaintiff.

5)Societies accepted the resignation of the Plaintiff on

14.2.93 which she had not tendered, if that be so, the

society did not act as per Rule 143 also.

6)The flat in dispute was under the lease and license

agreement at the material time since bank account in

this respect was operated by the son of the

Defendant no. 1 who also deposited cheque on

Plaintiff’s behalf.

7)The instant dispute case is not barred by limitation.

8)The transaction of 13.11.92 does not attract the

doctrine of estoppel.”

21.Based on the abovementioned conclusions drawn by the

Arbitrator on the factual and legal issues canvassed by the rival parties.

The Arbitrator passed the following award:

“AWARD

Keeping in view of the above, based on documents,

assessing all the pros and cons, on the basis of equity,

justice and good conscience, I pass the following ‘AWARD’:

a)The agreement dt. 13.11.92 between the Plaintiff and

Defendant no. 1 is invalid, void and incomplete and

b)The relevant resolution dt. 14.2.93 (Agenda no. 1) of

the Managing Committee of the Defendant no. 2 is

quashed and;

c)The Defendant no. 2 is directed to ensure and

conform that the plaintiff gets the possession of flat

no. 5D with garage space with immediate effect and

issue share certificate in her name immediately and

d)Any other action if any taken by any authority on and

after 13.11.92 affecting the membership of the

Plaintiff in any manner whatever is also quashed.

25

Page 26 The above Judgment and Award have been given on

Pronouncement before the parties present.”

22.Dissatisfied with the award rendered by the Tribunal on 5.2.1999,

Kalpana Mukherjee preferred an appeal bearing no. 14 of 1999 before

the West Bengal Co-operative Tribunal (hereinafter referred to as the

Co-operative Tribunal). The Society (defendant no. 2, before the

Arbitrator) preferred a separate appeal bearing no. 29 of 1999, to assail

the award of the Arbitrator dated 5.2.1999. While dwelling upon the

controversy between the parties, the Co-operative Tribunal considered

it appropriate to highlight the social relationship and affinity between the

parties. According to the Cooperative Tribunal, the relationship

between the parties had an essential bearing, to an effective

determination of the controversy. Insofar as the instant aspect of the

matter is concerned, rather than re-narrating the position taken into

consideration, we consider it more appropriate to extract hereunder the

narration recorded by the Co-operative Tribunal itself. The same is

accordingly reproduced hereunder:-

“For proper appreciate of evidence it is proper to introduce the

parties. P.W. Chowdhury, the respondent no. 1 in both the

appeals is a spinster and now aged 50+. She is a graduate. She

studies in Calcutta and other places. She is an exponent to

Bharat Natyam and performs dance at many places of India. For

a pretty long time she has been residing at Bombay. Smt. Bani

Roy is her sister. B. Roy’s husband Mr. H.P. Roy is a wealthy

person in Bombay. P. Chowdhury has been living in the family of

Mr. H.P. Roy since the put up herself in Bombay. Partha

Mukherjee is the son-in-law of H.P. Roy. K. Mukherjee who is the

appellant in appeal no. 14/1999 is the mother of Partha

Mukherjee. K. Mukherjee retired from service in the National

Library, Calcutta in 1994. While in service, she would stay in the

Govt. accommodation at Balvediare Road, Alipur. Partha

Mukherjee, Son of K. Mukherjee is an Engineer from I.I.T.,

Kharagpur and obtained M.B.A. from Ahmedabad and at the

26

Page 27 material time worked as Sales Manager/Regional Manager of

Colgate Palmolive Ltd. in Bombay, Calcutta and other places.

Partha Mukheree married Sova Mukherjee, who was the

daughter of H.P. Roy of Bombay. P. Chowdhury, her sister Bani,

H.P. Roy, Partha and Sova, all lived together for a prolonged

period of time in the house of H.P. Roy at Bombay. Partha

married Sova sometimes in 1987 and little after marriage, he and

Sova started living in the house of H.P. Roy. Evidence has it to

say that the relationship of Pratima with Sova Rinki is, as Pratima

herself says, “like my daughter”. Similarly, the evidence of

Pratima runs that after marriage, her relationship with Partha was

“like my son”. In 1992, Partha worked for Palmolive Co. Ltd. in

Bombay and while working there he, as we have earlier

observed, would stay in the house of H.P. Roy. In January, 1992,

Pratima was allotted a flat being no. 5B at 48E, Gariahat Road,

Calcutta-19 belonging to the society. The said flat was originally

allotted to Smt. Indrani Bhattacharya and the said Smt. Indrani

Bhattacharya having transferred the flat to Smt. P. Chowdhury,

the latter came to be an allottee of that flat, but P. Chowdhury did

not reside there at all. In March/April, 1992, Partha was

transferred from Bombay to Calcutta and needed an

accommodation. Colgate Palmolive Co. Ltd., was required to

arrange accommodation for its officers. As Pratima and Partha

became very closer and Pratima treated Partha like her son,

Partha put up himself in the flat of Pratima in April, 1992 and it

was the Colgate Palmolive Co. Ltd., which by virtue of an

agreement for license with Pratima used to pay Rs.5000/- per

month as rent to Pratima. These are all facts admitted. We see

that the relationship amongst Pratima, Partha and Kalpana grew

very closer because of Partha marrying the daughter of the sister

of Pratima. This background has to be borne in mind while

appreciating the evidence on record.”

Having traced the relationship between the parties, as has been

recorded hereinabove, the Co-operative Tribunal was of the view, that

the entire approach of the Arbitrator was erroneous, as the Arbitrator

had treated Pratima Chowdhury as a pardanashin lady. The above

inference, drawn by the Co-operative Tribunal, is also being extracted

hereunder:-

“The entire approach of the Ld. Arbitrator seemed to have gone

into the fashion as if the respondent no. 1 P. Chowdhury was a

pardanasin lady, that she was unaware of the documents she

was executing that it was Partha who managed to get all the

documents executed by Pratima so as to obtain transfer of the flat

27

Page 28 in the name of his mother Kalpana Mukherjee. Let it be recorded

here at the outset that P. Chowdhury, having regard to her status,

education and wealth cannot be allowed to take the benefit of

what a pardanasin woman is entitled to on two-fold grounds;

firstly, she is highly education (illegible) and a literate woman and

secondly, the pleading of Pratima Chowdhury as we get from

plaint does not make out such a case. ”

Just in the manner in which we have recorded the conclusions drawn by

the Co-operative Arbitrator, highlighting each individual aspect taken

into consideration, we will also endeavour to similarly summarize the

conclusions drawn by the Co-operative Tribunal on different aspects of

the matter. The above conclusions are being recorded hereunder:-

(i)The Co-operative Tribunal was of the view, that the determination

rendered by the Arbitrator was erroneous on account of the fact

that the Arbitrator did not take into consideration a letter of vital

importance to the controversy. In this behalf, the Co-operative

Tribunal examined the letter dated 29.6.1992, which Pratima

Chowdhury had written to the Society, wherein she had indicated

that due to her indifferent health, she was not in a position to visit

Calcutta in the immediate future. She accordingly requested the

Society to transfer her flat to “my nominee Kalpana Mukherjee, a

close relative of mine”. In the above letter Pratima Chowdhury

had also stated, that Kalpana Mukherjee was already occupying

the flat, and was staying in it with her son (Partha Mukheree), and

her daughter-in-law (Sova Mukherjee). She accordingly

requested the Society, that for the maintenance of the flat,

charges payable should be recovered from the residents of the

flat. It would be relevant to mention, that Pratima Chowdhury had

28

Page 29 accepted having written the above letter (in the rejoinder filed by

her before the Arbitrator). Despite the above Pratima Chowdhury

had explained, that the letter dated 29.6.1992 had been signed by

her at the instance of Partha Mukherjee. According to the Co-

operative Tribunal, the above letter dated 29.6.1992 written by

Pratima Chowdhury on her letterhead from Bombay, demolished

the entire case set up by her. Primarily on the basis of the said

letter dated 29.6.1992 the Co-operative Tribunal concluded, that

the factual inferences recorded by the Arbitrator without reference

to the above letter, were not justified. It came to be expressly

concluded by the Co-operative Tribunal, that motives attributed to

Partha Mukherjee were clearly unjustified.

(ii)According to the Co-operative Tribunal, after having written the

above letter dated 29.6.1992, Pratima Chowdhury wrote two

other letters dated 11.11.1992 and 13.11.1992. On the basis of

the above letters, flat no. 5D was transferred by the Society, to

the name of Kalpana Mukherjee, consequent upon the approval

of the Deputy Registrar, Co-operative Societies. In the opinion of

the Co-operative Tribunal, Pratima Chowdhury did not assail the

action of the Society in transferring flat no. 5D to Kalpana

Mukherjee till February, 1995. According to the Co-operative

Tribunal, the challenge to the transfer of the above flat in the

name of Kalpana Mukherjee, was raised only after a marital

discord had developed between Partha Mukherjee and his wife

Sova Mukherjee. On account of the above discord, Partha

29

Page 30 Mukhrjee left the company of the family of his father-in-law (H.P.

Roy). It was only thereupon, that Pratima Chowdhury assailed

the transfer of the flat (from her name, to the name of Kalpana

Mukherjee). According to the Co-operative Tribunal, the

Arbitrator overlooked the above extremely relevant factual

position and accordingly erred in drawing his conclusions.

(iii)Insofar as the document dated 13.11.1992 is concerned, the Co-

operative Tribunal having examined it, recorded that the same

was executed by Pratima Chowdhury and Kalpana Mukherjee

(both as executants), which was attested by H.P. Roy (father-in-

law of Partha Mukherjee) and which was also sworn before a

notary. The Co-operative Tribunal also observed, that the

aforesaid document had been executed on a non-judicial stamp

paper of Rs.40/-. The above document in its text recorded, that

Pratima Chowdhury had transferred the possession, right, title

and interest of flat no. 5D in favour of Kalpana Mukherjee (the

nominee/transferee). The reason for the aforesaid transfer was

indicated in document dated 29.6.1992. It was mentioned, that

on account of her (Pratima Chowdhury’s) indifferent health and

on account of having decided to permanently settle in Bombay,

she had agreed to transfer the flat no. 5D in favour of Kalpana

Mukherjee. It was also duly recorded in the above document,

that possession of flat no. 5D had already been handed over to

Kalpana Mukhrjee. It was also pointed out, that Kalpana

Mukherjee had already applied for membership of the Society,

30

Page 31 whereafter, she would be entitled to all rights and privileges over

flat no. 5D in terms of the bye-laws of the Society. According to

the Co-operative Tribunal, Pratima Chowdhury did not deny

execution of document dated 13.11.1992. As per the Co-

operative Tribunal, the submission of Pratima Chowdhury about

having signed a blank paper, on which Partha Mukherjee had

executed the document dated 13.11.1992, was not acceptable.

The Co-operative Tribunal was of the view, that Pratima

Chowdhury having admitted her signatures on the document

dated 13.11.1992, it was not open to her to deny the execution

thereof. For the same reason, the Co-operative Tribunal rejected

the contention advanced on behalf of Pratima Chowdhury, that

she had never appeared before the notary at Calcutta because

she had never gone to Calcutta during the period when the

documents dated 11.11.1992 and 13.11.1992 were executed.

The Co-operative Tribunal felt compelled to record the aforesaid

conclusion in the following words: “Regardless of whether the

document called agreement dated 13.11.1992 is legal or not, the

fact remains that the document was executed by the transferor

and the transferee, and it could not be denied that long before the

agreement was executed, possession of the flat was delivered

way back in March, 1992.”. Therefore, all the findings recorded

by the Arbitrator in respect of the document dated 13.11.1992

were not accepted for the above reasons.

31

Page 32 (iv)While dealing with the documents dated 29.6.1992, 11.11.1992

and 13.11.1992, the Co-operative Tribunal expressed disbelief at

the determination of the Arbitrator to the effect, that Pratima

Chowdhury had no intention to transfer her membership and her

flat bearing no. 5D to Kalpana Mukherjee. According to the Co-

operative Tribunal, the question whether monetary consideration

passed from Kalpana Mukherjee to Pratima Chowdhury or not,

was a different issue, however, the letters dated 29.6.1992,

11.11.1992 and 13.11.1992 clearly expressed the intention of

Pratima Chowdhury to transfer flat no. 5D in favour of her

nominee Kalpana Mukherjee. The Co-operative Tribunal was

also of the view, that the Arbitrator was unjustified in observing,

that the above letters were drafted by Partha Mukherjee, or that,

Partha Mukheree prevailed over Kalpana Mukherjee to execute

the above letters. According to the Co-operative Tribunal, neither

the evidence available on the records of the case, nor the

circumstances of the case justified any such inference.

(v)While dealing with the issue of consideration, which had passed

from Kalpana Mukherjee to Pratima Chowdhury on account of

transfer of flat no. 5D, the Co-operative Tribunal expressed, that

the Arbitrator appeared to have been of the view that since in the

letter dated 11.11.1992 it was stated, that no monetary

transaction was involved, there could be no sale, and

consequently, when there was no sale, there could be no

transfer. The Co-operative Tribunal expressed the view, that sale

32

Page 33 was not the only mode of transfer. Relying on the letter dated

11.11.1992 the Co-operative Tribunal felt, that it could not be

conclusively held, that Pratima Chowdhury had no intention to

transfer flat no. 5D in the name of Kalpana Mukherjee. In fact,

according to the Co-operative Tribunal, the issue of passing of

consideration and the issue of transfer of the property were two

independent issues. The said issues, according to the Tribunal,

had to be determined as per the totality of the circumstances of

the case. On the instant aspect of the matter the Co-operative

Tribunal expressed the view, that the rival parties were tied up by

a matrimonial relationship, inasmuch as, the niece (Sova

Mukherjee) of Pratima Chowdhury was the cementing factor, of

their relationship. Accordingly, whether or not consideration had

passed between the parties, could not be considered as a

decisive factor. In fact, the Co-operative Tribunal was pleased to

further conclude, “Even assuming for the sake of argument that

no monetary transaction was involved, the factum of transfer is

not abrogated thereby”. According to the Co-operative Tribunal,

the provisions of the West Bengal Co-operative Societies Act,

and the Rules framed thereunder, do not mandate, that transfer

could only be made by way of sale. Keeping in view the

closeness of the relationship, which is existed between the

parties, according to the Co-operative Tribunal, the issue of

paramount importance was not the receipt of monetary

consideration, the issue of paramount importance was only “… to

33

Page 34 accommodate the plaintiff’s niece Sova and her husband Partha,

that was uppermost in the mind of the plaintiff…” Referring to the

facts of the present case, the Co-operative Tribunal held, that

consistent with the case of Pratima Chowdhury based on an oral

agreement, Partha Mukherjee transferred shares of different

companies “… worth Rs.4,29,000/- in favour of the plaintiff on

6.12.1994 by way of consideration of the apartment…”. It is

necessary to notice the observations made by the Co-operative

Tribunal on the instant aspect of the matter. The same are

accordingly reproduced in the words of the Co-operative Tribunal:

“One may not believe the reality of oral agreement so as to

determine the price and of payment thereto by transfer of shares

of different companies in favour of the respondent no. 1. But if it

appears from the documents which show that in the latter part of

the year 1994, shares worth Rs.4,29,000/- were transferred in

favour of P. Chowdhury and if no convincing evidence is

forthcoming as to payment of that money for different purpose or

for different reason then one is to believe the passing of

consideration price, and the passing of consideration price when

proved would virtually prove the alleged oral agreement to that

effect.”

(vi)The Co-operative Tribunal also examined the rival contentions of

the parties in respect of the place where the documents in

question were executed. It was pointed out, that the evidence

produced by Pratima Chowdhury to the effect, that she had

34

Page 35 signed the documents in Bombay, could not be accepted.

Likewise, according to the Co-operative Tribunal, the witnesses

produced by Pratima Chowdhury on the above issue, were not

reliable. According to the Co-operative Tribunal, when the notary

who was an Advocate stated on oath, that the documents were

executed in Calcutta before him, it was not possible to give

credence to the statement of Pratima Chowdhury or the

witnesses produced by her. According to the Co-operative

Tribunal, it needed to be kept in mind even, insofar as the instant

aspect of the matter was concerned, that Pratima Chowdhary had

raised a dispute in respect of the transfer of flat no. 5D only after

a marital discord had developed between Partha Mukherjee and

Sova Mukherjee.

(vii)According to the Co-operative Tribunal “the question as to why

Kalpana Mukherjee was not made a nominee in January, 1992

when she was put in possession of the flat, lies in the fact that

since 1987, Kalpana Mukherjee’s son Partha Mukherjee had

been residing in Bombay with his father in law H.P. Roy and

Pratima Chowdhury. According to the Co-operative Tribunal, the

Arbitrator recorded a useless reasoning, that the nomination in

favour of Kalpana Mukherjee was not acceptable. Referring to

Sections 79 and 80 of the West Bengal Co-Operative Societies

Act, the Co-operative Tribunal expressed the view, that it was not

compulsory that transfer of nomination could only be in favour of

a member of the family of the person making the nomination.

35

Page 36 According to the Co-operative Tribunal, the letters/documents

dated 29.6.1992, 11.11.1992 and 13.11.1992 were sufficient

proof of the nomination by Pratima Chowdhury in favour of

Kalpana Mukherjee. It was also pointed out, that the Society had

accepted the above nomination, which was approved by the

Deputy Registrar, Co-Operative Societies. It was accordingly

concluded by the Co-operative Tribunal, that in such a situation,

no separate letter giving consent to the transfer was required.

(viii)Another interesting aspect of the matter dealt with by the Co-

operative Tribunal was based on the principle of estoppel. Rather

than expressing the observations and conclusions drawn by the

Co-operative Tribunal in our words, we consider it just and

appropriate to narrate the findings recorded by the Co-operative

Tribunal by extracting its observations. The same are accordingly

reproduced hereunder:-

“Section 115 of the Evidence Act provides that “when one person

has by his declaration act or commission, intentionally causes or

permits another person to believe a thing to be true and to act

upon such belief, neither he nor his representative shall be

allowed in the suit or proceeding between herself and such

person or his representative shall be allowed in the suit or

proceeding between herself and such person or his

representation, to deny the truth of that thing”. The following facts

are very much present to invoke the doctrine.

(a)Fraud, undue influence (illegible) and

misrepresentation has not been proved;

(b)(illegible)

(c)(Illegible)

(d)Partha was in need of accommodation in Calcutta;

(e)Long before transfer Kalpana was already made a

nominee in respect of the flat in question;

(f)Unquestionably two letters dated 19.6.1992 and

13.11.1992 are there addressed by Pratima to the

36

Page 37 society clearly asking for transfer of the flat in favour

of Kalpana;

(g)Possession was delivered pursuant to those letters

and agreement dated 13.11.1992;

(h)Lease and license agreement with Colgate Palmolive

Ltd., legally cannot destroy the factum of transfer;

(i)Partha and Kalpana are led to believe about the

completion of transfer;

(j)Under the law it (illegible) required to be executed

and registered under the T.P. Act and the I.R. Act;

(k)Pratima writes to CESC to henceforth collect all

charges from Kalpana;

(l)Pratima slept a slumber after the signing of the

agreement dated 13.11.1992 till April, 1993.

These facts are to our mind sufficient to invoke

the doctrine of estoppel. When society acted upon letters of the

plaintiff/respondent no. 1 and transfer was effected, the

respondent no. 1 is estopped from challenging her stand.”

(ix)It was argued before the Co-operative Tribunal, that when the

lease and license agreement came to an end, Partha Mukherjee

wrote a letter to Colgate Palmolive India Limited informing it of the

termination of the lease and license agreement by asserting, that

“Landlady refunded back the security deposit of Rs.60,000/-“.

Factually, Partha Mukherjee had deposited the above amount of

Rs.60,000/-, in the Calcutta office of Colgate Palmolive (India)

Limited. It was argued before the Co-operative Tribunal, that the

use of the expression “landlady” by Partha Mukherjee, was

indicative of the fact that the transfer of flat no. 5D had actually

not taken place. According to the Co-operative Tribunal, the

aforesaid argument was not acceptable because in the eyes of

Colgate Palmolive (India) Limited, Pratima Chowdhury was a

landlady and accordingly it was not required that Partha

Mukherjee should inform Colgate Palmolive (India) Limited, that

37

Page 38 Pratima Chowdhury had transferred flat no. 5D to the name of his

mother Kalpana Mukherjee.

Based on the aforesaid findings recorded by the Co-operative Tribunal,

both the appeals were allowed. The impugned award passed by the

Tribunal dated 5.2.1999 in Dispute Case No. 29/RCS of 1995-96 was

set aside. Accordingly, the dispute raised by Pratima Chowdhury was

dismissed.

23.Dissatisfied with the common order passed by the Co-operative

Tribunal dated 16.5.2002, vide which Appeal nos. 14 of 1999 and 29 of

1999 were disposed of, the petitioner invoked the civil revisional

jurisdiction of the High Court at Calcutta (hereinafter referred to as, the

High Court). During the course of deliberations before the High Court,

Pratima Chowdhury assailed the findings recorded by the Co-operative

Tribunal on various aspects of the matter. The High Court in its

deliberations traced the sequence of facts in the background of the facts

as were examined by the Arbitrator, as also, the Co-operative Tribunal.

No new facts were taken into consideration. The High Court

adjudicated upon the matter vide an order dated 14.2.2006, whereby

Civil Order nos. 3039 and 3040 of 2002 were jointly disposed of. The

different perspectives and angles within the framework of which the

High Court examined the controversy, are being briefly narrated

hereunder:-

(i)The High Court excluded various facts taken into consideration by

the Arbitrator. For excluding certain facts from consideration, the view

38

Page 39 of the High Court was, that the factual position introduced by Pratima

Chowdhury by filing a rejoinder before the Arbitrator, could not be taken

into consideration. The consideration of the High Court was recorded in

the impugned order dated 14.2.2006, as under:-

“After service of copy of the written statement, the plaintiff before

the learned Arbitrator filed a rejoinder thereby attempting to

introduce certain facts. But the learned Tribunal observed that

there could be no scope for filing of such rejoinder either under

the Code of Civil Procedure or under the West Bengal Co-

Operative Societies Rules.”

In fact, on the instant aspect of the matter the High Court, adopted as

correct the following observations recorded in the order passed by the

Co-operative Tribunal:-

“It has to be clearly stated that under no provision of law the

plaintiff can be allowed to submit a rejoinder to the written

statement of the defendant and the facts introduced in the

rejoinder were illegally taken note of by the Ld. Arbitrator and

whatever evidence she introduced to translate that rejoinder

cannot be legally accepted.”

(ii)The High Court was of the view, that the stance adopted by

Pratima Chowdhury was impermissible under the principle of justice and

equity, the doctrine of fairness, as also, the doctrine of estoppel. This

aspect of the matter came to be examined in the following manner:-

“After due consideration of all relevant facts and materials it

appears that there could be very little scope for the society to

recall its stand just because after about three years, Pratima

Chwodhury decided otherwise. In fact resolution of the dated

14.2.1993 was forwarded to the Deputy Registrar, Co-operative

Societies with recommendation for transfer of flat and shares in

favour of Kalpana Mukherjee as far back as on 10.3.1993. It

appears that the Deputy Registrar, Co-operative Societies, asked

for certain document on 26.7.1993, which were submitted by the

society on 22.9.1993. Thereafter, membership of Kalpana

Mukherjee in place of Pratima Chowdhury was approved. Thus,

backing out by Pratima Chowdhury after about three years of her

own consistent request for transfer in favour of Kalpana

Mukherjee and her request to C.E.S.C. to transfer electric meter,

39

Page 40 cannot have any support in the eyes of law. Pratima Chowdhury

also did not bother to intimate Kalpana Mukherjee while

requesting the society for necessary action in view of her change

of mind. This is against the doctrine of fairness. Lord Dening in

his book, The Discipline of Law, 7

th

Reprint, page 223, observed:

“It is a principle of justice and of equality. It comes to this,

when a man by his words or conduct has led another to

believe that he may safely act on the faith of them – and

the other does act on when it would be unjust or inequitable

for him to do so.”

In the words of Dixon, J.:-

“The principle upon which estoppel in pais is founded is that the

law should not permit an unjust departure by a party from an

assumption of fact which he has caused another party to adopt or

accept for the purpose of their legal relations.”

The said principle was further stretched to the following extent:-

“At any rate, it applies to an assumption of ownership or absence

of ownership. This gives rise to what may be called proprietary

estoppel. There are many cases where he is not the owner, or, at

any rate, is not claiming an interest therein, or that there is no

objection to what the other is doing. In such cases, it has been

held repeatedly that the owner is not to be allowed to go back on

what he has led the other to believe. So much so that his own

title to the property, be it land or goods, has been held to limited

or extinguished, and new rights and interest have been created

therein. And this operates by reason of his conduct what he was

led the other to believe even though he never intended it.”

It may be said that even in absence of actual

promise, if a person by his words or conduct, so behaves as to

lead another to believe that he will not insist on his strict legal

rights, knowing or intending that the other will act on that belief

and he does so act, that again will raise an equity in favour of the

other, and it is for a court to equity to say in what way the equity

may be satisfied. An equity does not necessarily depend on

agreement but on words or conduct. The Privy Council in V.

Wellington Corporation observed that the Court must look at the

circumstances in each case to decide in what way the equity can

be satisfied.”

(iii)The High Court expressly approved the manner in which the

controversy had been examined by the Co-operative Tribunal, by taking

40

Page 41 into consideration the past relationship between the parties, and the

souring of the relationship between the two spouses, i.e., Partha

Mukherjee and Sova Mukherjee. Having examined the dispute in the

aforesaid prospective, the High Court observed as under:-

“On behalf of the petitioner it was also submitted that the learned

Tribunal failed to appreciate the findings of the learned Arbitrator

arrived at after proper appreciation of the evidence in the said

proceeding. The learned Tribunal seem to be in agreement with

the view that the document dated 13.11.1992 cannot be called as

a proper and complete document of transfer. The learned

Tribunal, thereafter explored as to whether such a document is at

all necessary for effecting transfer of an apartment by a member

to another person. Relying upon the letters dated 29.6.1992 and

11.11.1992 and quite rightly, without attempting to read more

than what meets the eyes, the learned Tribunal held that Pratima

Chowdhury by such letters, expressed her desire to transfer the

flat in favour of her nominee Kalpana Mukherjee. This was quite

relevant in the context of relationship between two families arising

out of the marital tie. It cannot be said that the learned Tribunal

was not at all justified in observing that in the backdrop of the

present case, payment of consideration could not be the decisive

factor.”

(iv)On the subject of passing of consideration, the High Court

principally accepted the view propounded by the Co-operative Tribunal.

The High Court made the following observations on the issue of

consideration:-

“The learned Tribunal appears to have considered the aspect

relating to transfer of flat in proper perspective. Nothing could be

placed before this Court so as to justify brushing aside of the

observation of the learned Tribunal that “neither the Act nor the

rule rules out transfer by gift or will. But the Rule does not

provide the manner of transfer, nor does it mandate that transfer

has to be effected by any of the modes necessary as provided for

in the Transfer of Property Act. The transferee has to be an

allottee or a re-allottee.”

On perusal of the impugned judgment, it is

found that the learned Tribunal referring to Rule 201(3) of the

West Bengal Co-operative Societies Rule, 1974 and relevant

Rule of 1987 observed that the question of payment of

41

Page 42 consideration money is primarily and purely a matter between the

transferor and the transferee. It was held that “deletion of the

Rule 201 (3) from the present Rule of 1987 clearly fortifies the

position of the society which effected transfer on the repeated

request of the respondent no. 1 in full compliance with the

provisions of the Act and the Rules. This being so, for a

transferee to hold possession is required the certificate of

allotment, not a deed of conveyance from the transferor”.”

Significantly enough the learned Tribunal

mentioned about the manner in which Pratima Chowdhury got the

flat from the original member, Smt. Indrani Bhattacharya and

wondered as to how then there could be any grievance in regard

to the transfer by the said Pratima Chowdhury in favour of

Kalpalan Mukherjee. The story of giving money to Partha

Mukherjee by way of loan could not be established to the

satisfaction of the judicial conscience of the learned Tribunal and

for reasons as mentioned in the impugned judgment, the learned

Tribunal did not choose to brush aside the assertions made on

behalf of Kalpana Mukherjee that shares amounting to

Rs.4,29,000/- were transferred in favour of Pratima Chowdhury.

Controversy relating to alleged non-payment of consideration

money, in the facts and circumstances of the present case, were

not seen to have nay legs, to stand upon.”

Having recorded the aforesaid findings, the High Court in its conclusion

recorded the following observations:-

“But, as observed earlier, the judgment and order under

challenge does not seem to be suffering from any such infirmity

or jurisdictional error, which calls for or justifies any interference

by this Court.”

Based on the analysis of the controversy in the manner summarized

hereinabove, the High Court dismissed the challenge raised by Pratima

Chowdhury by a common order dated 14.2.2006. The common order

passed by the Co-operative Tribunal dated 16.5.2002, and the common

order passed by the High Court dated 14.2.2006 were assailed by

Pratima Chowdhury by filing Special Leave to Appeal (Civil) no. 15252

of 2006.

24.Leave granted.

42

Page 43 25.The factual narration recorded by us, the circumstances taken

into consideration by the Arbitrator, and the Co-operative Tribunal, as

also, the analysis of the High Court have all been detailed hereinabove.

Suffice it to state, that there were no further facts besides those already

referred to hereinabove, which were brought to our notice during the

course of hearing. It is also not necessary for us to record the

submissions advanced at the hands of the learned counsel for the rival

parties. All that needs to be mentioned is, that the same submissions

as were put forward by the respective parties hitherto before, came to

be addressed before this Court as well. We shall, therefore, venture to

examine the veracity of the propositions advanced on behalf of the rival

parties by compartmentalizing the submissions advanced before us

under different principles of law. We would thereupon record our final

conclusions.

26.First and foremost, it surprises us that Co-operative Tribunal, as

also, the High Court excluded from consideration, the factual position

expressed in the rejoinder filed by the appellant (before the Arbitrator).

In excluding the aforesaid factual position, the Co-operative Tribunal

and the High Court did not rely on any provision of law nor was any

reliance placed on any principle accepted and recognized in legal

jurisprudence. It is not a matter of dispute, that after Kalpana

Mukherjee and the Society were permitted to file written replies before

the Arbitrator, the rejoinder filed thereto on behalf of Pratima

Chowdhury, was permitted to be taken on record. It is not in contention,

that in the written replies filed before the Arbitrator, Kalpana Mukherjee

43

Page 44 had adopted inter alia the stance, that consideration was paid to

Pratima Chowdhury in lieu of the transfer of flat no. 5D to her name,

even though the documents relied upon by the rival parties, expressed

otherwise. A number of documents not mentioned in the Dispute Case

filed by Pratima Chowdhury were also relied upon by Kalpana

Mukherjee. Pleadings between the parties could be considered as

complete, only after Pratima Chowdhury was permitted to file a

rejoinder (in case she desired to do so). She actually filed a rejoinder

which was taken on record by the Arbitrator. Both parties were

permitted to lead evidence, not only on the factual position emerging

from the complaint filed by Pratima Chowdhury and the written replies

filed in response thereto (by Kalpana Mukherjee, and the Society), but

also, the factual position highlighted by Pratima Chowdhury in her

rejoinder affidavit. It is, therefore, not on the basis of the pleadings of

the parties, but also on the basis of the evidence led in support of the

aforesaid pleadings, that the Arbitrator had recorded his findings in his

award dated 5.2.1999. We are therefore of the view, that the Arbitrator

had acted in accordance with law, and therefore the exclusion from

consideration, of the factual position asserted by Pratima Chowdhury in

her rejoinder, by the Co-operative Tribunal and the High Court was

wholly unjustified. The factual narration by Pratima Chowdhury, could

not be excluded from consideration, while adjudicating upon the rival

claims between Pratima Chowdhury and Kalpana Mukherjee. The

instant aspect of the decision of the High Court, is therefore liable to be

set aside, and is accordingly set aside. Just the instant determination,

44

Page 45 would result in a whole lot of facts which were not taken into

consideration by the adjudicating authorities, becoming relevant.

Despite that, we feel, that remanding the matter for a denovo

consideration, would place a further burden on the parties. Having

heard learned counsel at great length, we shall settle the issues finally,

here and now.

27.The Co-operative Tribunal in its order dated 16.5.2002 had

invoked the principle of estoppel, postulated in Section 115 of the Indian

Evidence Act. The High Court affirmed the conclusions drawn by the

Co-operative Tribunal. In addition to the above principle, the High Court

invoked the principles of equity and fairness. Insofar as the latter

principles are concerned, we shall delve upon them after examining the

contentions of the rival parties, as equity and fairness would depend

upon the entirety and totality of the facts. The above aspect can

therefore only be determined after dealing with the intricacies of the

factual circumstances involved. We shall, however, endeavour to deal

with the principle of estoppel, so as to figure whether, the rule contained

in Section 115 of the Indian Evidence Act could have been invoked, in

the facts and circumstances of the present case. Section 115 of the

Indian Evidence Act is being extracted hereinabove:-

“115. Estoppel.- When one person has, by his declaration, act or

omission, intentionally caused or permitted another person

to believe a thing to be true and to act upon such belief,

neither he nor his representative shall be allowed, in any

suit or proceeding between himself and such person or his

representative, to deny the truth of that thing.

Illustration

45

Page 46 A intentionally and falsely leads B to believe that certain

land belongs to A, and thereby induces B to buy and pay

for it. The land afterwards becomes the property of A, and

A seeks to set aside the sale on the ground that, at the time

of the sale, he had no title. He must not be allowed to prove his

want of title.”

It needs to be understood, that the rule of estoppel is a doctrine based

on fairness. It postulates, the exclusion of, the truth of the matter. All,

for the sake of fairness. A perusal of the above provision reveals four

salient pre conditions before invoking the rule of estoppel. Firstly, one

party should make a factual representation to the other party.

Secondly, the other party should accept and rely upon the aforesaid

factual representation. Thirdly, having relied on the aforesaid factual

representation, the second party should alter his position. Fourthly, the

instant altering of position, should be such, that it would be iniquitous to

require him to revert back to the original position. Therefore, the

doctrine of estoppel would apply only when, based on a representation

by the first party, the second party alters his position, in such manner,

that it would be unfair to restore the initial position. In our considered

view, none of the ingredients of principle of estoppel contained in

Section 115 of the Indian Evidence Act, can be stated to have been

satisfied, in the facts and circumstances of this case. Herein, the first

party has made no representation. The second party has therefore not

accepted any representation made to her. Furthermore, the second

party has not acted in any manner, nor has the second party altered its

position. Therefore, the question whether the restoration of the original

position would be iniquitous or unfair does not arise at all. Even if

consideration had passed from Kalpana Mukherjee to Pratima

46

Page 47 Chowdhury, on the basis of the representation made by Pratima

Chowdhury, we could have accepted that Kalpana Mukherjee had

altered her position. In the facts as they have been presented by the

rival parties, especially in the background of the order passed by the

Arbitrator, that no consideration had passed in lieu of the transfer of the

flat, and especially in the background of the factual finding recorded by

the Co-operative Tribunal and the High Court, that passing of

consideration in the present controversy was inconsequential, we have

no hesitation whatsoever in concluding, that the principle of estoppel

relied upon by the Co-operative Tribunal and the High Court, could not

have been invoked, to the detriment of Pratima Chowdhury, in the facts

and circumstances of the present case. Insofar as the instant aspect of

the matter is concerned, the legal position declared by this Court fully

supports the conclusion drawn by us hereinabove. In this behalf,

reference may be made, firstly, to the judgment rendered by this Court

in Kasinka Trading vs. Union of India, (1995) 1 SCC 274, wherein this

Court noticed as under:-

“11. The doctrine of promissory

estoppel or equitable estoppel is well established in the

administrative law of the country. To put it simply, the

doctrine represents a principle evolved by equity to avoid

injustice. The basis of the doctrine is that where any party

has by his word or conduct made to the other party an

unequivocal promise or representation by word or conduct,

which is intended to create legal relations or effect a legal

relationship to arise in the future, knowing as well as

intending that the representation, assurance or the promise

would be acted upon by the other party to whom it has

been made and has in fact been so acted upon by the

other party, the promise, assurance or representation

should be binding on the party making it and that party

should not be permitted to go back upon it, if it would be

47

Page 48 inequitable to allow him to do so, having regard to the

dealings, which have taken place or are intended to take

place between the parties.”

(emphasis is ours)

The above sentiment recorded in respect of the principle of estoppel

was noticed again by this Court in Monnet Ispat & Energy Ltd. vs. Union

of India & Ors., (2012) 11 SCC 1, wherein this Court expressed its

views in respect of the principle of estoppel as under:-

“289. As we have seen earlier, for

invoking the principle of promissory estoppel there has to

be a promise, and on that basis the party concerned must

have acted to its prejudice.”

(emphasis is ours)

The ingredients of the doctrine of estoppel in the manner expressed

above were also projected in H.S. Basavaraj (D) by his LRs. & Anr. Vs.

Canara Bank & Ors., (2010) 12 SCC 458, as under:-

“30. In general words, estoppel

is a principle applicable when one person induces another

or intentionally causes the other person to believe

something to be true and to act upon such belief as to

change his/her position. In such a case, the former shall be

estopped from going back on the word given. The principle

of estoppel is, however, only applicable in cases where the

other party has changed his position relying upon the

representation thereby made.”

(emphasis is ours)

As already noticed hereinabove, none of the ingredients of estoppel can

be culled out from the facts and circumstances of the present case. In

view of above, we hereby set aside the determination by the Co-

operative Tribunal, as also the High Court, in having relied on the

principle of estoppel, and thereby, excluding the pleas/defences raised

by Pratima Chowdhury to support her claim.

48

Page 49 28.The admitted factual position in the present controversy, in our

considered view, is absolutely clear and unambiguous. Had the

different adjudicating authorities taken into consideration the undisputed

factual position, there ought not to have been much difficulty in

resolving the difficulty. We shall highlight a few relevant admitted facts

which crossed our mind while hearing the matter and whilst recording

the order:-

(i)The reason for transferring flat no. 5D indicated in the letters

dated 11.11.1992 and 13.11.1992 was on account of the close

relationship between Pratima Chowdhury and Kalpana Mukherjee,

which was expressed by observing “…my nominee Kalpana, a close

relative of mine…”. As a matter of fact, there was no close relationship

between Pratima Chowdhury and Kalpana Mukherjee. Pratima

Chowdhury, is indicated to have been living in Bombay and never

visiting Calcutta. Kalpana Mukherjee is a resident of Calcutta, who was

in employment at Calcutta, and had started to reside with her son

Partha Mukherjee, after he moved to Calcutta alongwith his wife Sova

Mukherjee. There was no direct relationship between Pratima

Chowdhury and Kalpana Mukherjee. Pratima Chowdhury’s niece Sova

Mukhrjee was married to Partha Mukherjee, son of Kalpana Mukherjee.

The only relationship that can be assumed, is of aunty and niece,

between Pratima Chodhury and Sova Mukherjee. If on account of love

and affection, for her niece, Pratima Chowdhury desired to transfer flat

no. 5D which she had purchased for a consideration of Rs.4 lakhs, she

would have done so by transferring it to the name of her niece Sova

49

Page 50 Mukherjee. Affinity to Sova Mukherjee, and the love, affection and

welfare of Sova Mukherjee, would not extend to a gesture of the nature

under reference, i.e., by way of transfer of immovable property, of

substantial value, without consideration, to the mother in law of Sova

Mukherjee. Therefore, factually the expression of close relationship

between Pratima Chwodhury and Kalpana Mukherjee depicted in letters

dated 11.11.1992 and 13.11.1992 are on the face of it, false and

incorrect. It is, therefore, improper for the adjudicating authorities to

have accepted the factum of close relationship of the parties, in so far

as, the transfer of flat no. 5D, is concerned.

(ii)There is hardly any justification for having accepted another

important factual position depicted in the letters dated 11.11.1992 and

13.11.1992. In this behalf, our reference is to the fact that flat no. 5D

was sought to be transferred by Pratima Chowdhury to Kalpana

Mukherjee, without consideration. First and foremost, the aforesaid

factual position is not acceptable on account of the statement of

Kalpana Mukherjee herself. In the written reply filed before the

Arbitrator, Kalpana Mukherjee took the express stance, that Pratima

Chwodhury had transferred flat no. 5D to her name, by accepting a

consideration of Rs.4,29,000/-. She further asserted, that the aforesaid

consideration had passed from Kalpana Mukherjee to Pratima

Chowdhury through Partha Mukherjee. According to Kalpana

Mukherjee, Partha Mukherjee transferred shares in his name valued at

Rs.4,29,000/-, to the name of Pratima Chowdhury. Per se therefore,

even Kalpana Mukherjee denied the factual position indicated in the

50

Page 51 above letters, whereby flat no. 5D was transferred from the name of

Pratima Chowdhury, to that of Kalpana Mukherjee.

(iii)The letters dated 11.11.1992 and 13.11.1992 expressly recorded,

that the factual position narrated in the above letters was on account of

“compliance with the rules regulating such transfer, and also, for

avoiding future complications”. In view of the factual position noticed in

the foregoing paragraphs, it is apparent, that false facts were being

recorded for compliance with the rules and regulations, as also, for

avoiding future complications. One would have appreciated the

recording of consideration in lieu of the transfer of property from the

name of Pratima Chowdhury to that of Kalpana Mukherjee, to avoid

future complications, rather than withholding the same. It is clearly not

understandable, what kind of complications were being avoided.

Expressing the above factual position in the letters under reference,

makes the whole transaction suspicious, mistrustful and possibly

fraudulent too. In the absence of any relationship, the party benefiting

from the letters dated 11.11.1992 and 13.11.1992, would have

successfully avoided all complications merely by incorporating

consideration, which was to pass from Kalpana Mukherjee to the

transferee Pratima Chowdhury. If consideration was to pass, and had

actually passed, it is difficult to understand why the parties would say,

that the transaction did not involve passing of consideration. It is

therefore clear, that all the ingredients of letter dated 11.11.1992 and

13.11.1992 are shrouded in suspicious circumstances. One is

prompted to record herein, that it was not legitimately open to the

51

Page 52 parties to record in the letters under reference, that flat no. 5D was

being gifted by Pratima Chowdhury to Kalpana Mukherjee, on account

of lack of proximity between the parties. The transfer of the said

property by one to the other, by way of gift, would obviously have been

subject to judicial interference, as the same would at least prima facie,

give the impression of dubiety. It was therefore, that Kalpana

Mukherjee hastened to adopt a different factual position in her written

reply before the Arbitrator.

(iv)It is relevant to mention, that in the written statement filed by

Kalpana Mukherjee (before the Arbitrator) the stand adopted by her

was, that a consideration of Rs.4,29,000/- had passed from her to

Pratima Chowdhury, by way of transfer of shares (standing in the name

of her son, Partha Mukherjee) to the name of Pratima Chowdhury. In

this behalf it would be relevant to notice, that the documents of transfer

executed between Pratima Chowdhury and Kalpana Mukherjee were

dated 11.11.1992 and 13.11.1992. Based thereon, the Board of

Directors of the Society, in its meeting held on 14.2.1993, resolved to

accept the resignation of Pratima Chowdhury. It was further resolved,

to accept the membership of Kalpana Mukherjee in her place. On the

date of execution of the documents under reference, as also on the date

of passing of the resolution by the Board of Directors of the Society,

Partha Mukherjee did not have any shares in his name. The shares

which Partha Mukherjee acquired, and which Kalpana Mukherjee claims

to have been transferred in lieu of consideration (to the name of Pratima

Chowdhury), were shown to have been acquired on or after 8.9.1993.

52

Page 53 The dates of acquisition of the said shares, as were recorded in the

order passed by the Arbitrator, which position has not been disputed

before us, are as follows:-

“COMPANY’S NAME NO. OF SHARES ACQUIRED

Tata Chemicals Ltd.50 nos. 8.9.93

Tata Chemicals Ltd.450 nos. 27.10.93

Siemens 50 nos. 2.8.93

Indian Aluminium 500 nos. 4.3.94

I.T.C. Hotels 100 nos. acquired with Mr.

H.P. Roy 4.4.94”

It is therefore apparent, that Partha Mukherjee did not even have the

shares referred to by the transferee Kalpana Mukherjee, in his name,

when the transfer documents were executed on 11.11.1992 and

13.11.1992, or even on 14.2.1993 when the Board of Directors of the

Society, passed the transfer resolution. The above shares are shown to

have been transferred to the name of Pratima Chowdhury on

16.12.1994. Well before 16.12.1994, even according to the stance

adopted by Kalpana Mukherjee, Pratima Chowdhury had executed all

the transfer documents. It is therefore difficult to accept, that the parties

had agreed to pass on consideration by transfer of shares, which were

not even owned by Kalpana Mukherjee (through Partha Mukherjee) on

the date of transfer of flat no. 5D from Pratima Chowdhury to Kalpana

Mukherjee. In sum and substance therefore, on undisputed facts, the

stance adopted by Kalpana Mukherjee in the written statement filed by

her before the Arbitrator, is shown to be false. This aspect of the matter

would bring out a legitimate query, namely, why should Kalpana

Mukherjee have adopted a false stance, contrary to the expressed

53

Page 54 position in the letters dated 11.11.1992 and 13.11.1992. This further

exposes, the suspicious nature of the transfer transaction.

(v)On the subject of transfer of shares from the name of Partha

Mukherjee to the name of Pratima Chowdhury, which, according to

Kalpana Mukherjee constituted passing of consideration to Pratima

Chowdhury (in lieu of the transfer of flat no. 5D). Pratima Chowdhury

had adopted the stance, that the transfer of the above shares was on

account of return of loans extended by Pratima Chowdhury to Partha

Mukherjee. Insofar as the instant aspect of the matter is concerned

Pratima Chowdhury had asserted, that after the transfer of Partha

Mukherjee from Calcutta to Bombay in the year 1993, he gave up his

employment with Colgate Palmolive (India) Limited, and started a

business of aluminium products with one R.K. Sen, at Bombay. To help

Partha Mukherjee with his above business venture, Pratima Chowdhury

had (on the asking of Partha Mukherjee) paid a sum of Rs. 2 lakhs by

way of cheque, to Bharat Aluminium Company Limited, for supply of

raw materials to Partha Mukherjee’s business venture. It was also

pointed out, that Partha Mukherjee had also taken a loan for a sum of

Rs. 1,50,000/- for the same purpose from Bani Roy (sister of Pratima

Chowdhury). It was also asserted, that Sova Mukherjee had similarly

extended loans, by making payments through cheque to Partha

Mukherjee. The Arbitrator had accepted the above assertion of Pratima

Chowdhury. For the above determination, the Arbitrator had placed

reliance, on documentary and oral evidence, produced by Pratima

Chowdhury. The instant factual aspect of the matter was totally

54

Page 55 overlooked by the Co-operative Tribunal, as well as, by the High Court.

Keeping in view the factual position depicting in paragraph (iv) above,

we have no doubt in our mind, that there was substance in the

determination of the Arbitrator, specially on account of the fact that

transfer of shares from the name of Partha Mukherjee to the name of

Pratima Chowdhury came to be effected, well after the transfer of flat

no. 5D to the name of Kalpana Mukherjee. For the above reason as

well, the findings of fact recorded by the Co-operative Tribunal as well

as by the High Court, are bound to be considered as having been

recorded without taking into consideration all the material and relevant

facts.

(vi)The fact that Pratima Chowdhury had addressed a letter to the

Secretary of the Society, dated 28.2.1995, for withdrawal of her earlier

letter dated 11.11.1992, is not in dispute. It is also not a matter of

dispute, that at the time when Pratima Chowdhury addressed the above

letter, neither the transfer of membership, nor the transfer of the flat,

had assumed finality. The transfer of membership, as also the transfer

of the flat, would assume finality only upon the approval of the same by

the Deputy Registrar, Co-operative Societies. The factual position

emerging from the record of the case reveals, that the Society sought

the approval of the Deputy Registrar, Co-operative Societies for the

transfer of membership, as also, flat no. 5D to the name of Kalpana

Mukherjee on 13.3.1995. Undoubtedly, Pratima Chowdhury had sought

revocation, before the transfers under reference had assumed finality.

It is in the above background, that one needs to evaluate the reply of

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Page 56 the Society dated 10.4.1995. Through the letter dated 10.4.1995,

Pratima Chowdhury was informed, that the Society had no authority to

look into the matter, after the resolution of the Board of Directors dated

2.4.1995. We find the above explanation, untenable. It was imperative

for the Society to have examined the withdrawal letter dated 28.2.1995,

the matter certainly had not been concluded. Well after the withdrawal

letter, the Society by its notice dated 16.4.1995 had intimated its

members, about the resolution dated 2.4.1995. The matter was,

therefore, pending authoritative conclusion. Thus viewed, it was not

justified for the Society to deny consideration of the withdrawal letter

dated 28.2.1995. Acceptance or rejection on merits is another matter,

but non-consideration is not understandable. The instant non-

consideration clearly invalidates the resolution passed by the Society.

(vii)On 22.3.1995, Pratima Chowdhury addressed a letter to the

Deputy Registrar, Co-operative Societies, imploring him to take

appropriate action, by considering the withdrawal letter dated

28.2.1995. We are surprised, that the Deputy Registrar, Co-operative

Societies adopted the same stance, as was adopted by the Society.

When the letter dated 22.3.1995 was addressed to the Deputy

Registrar, Co-operative Societies, it had not yet granted approval to the

recommendations made by the Society. The receipt of the letter dated

28.2.1995, by the Society (as also the receipt of the letter dated

22.3.1995, by the Deputy Registrar, Co-operative Societies) is not in

dispute. It is imperative for us therefore to conclude, that the decision

taken by the Deputy Registrar, Co-operative Societies was, without

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Page 57 reference to the withdrawal letter dated 28.2.1995 (which was enclosed

with the letter dated 22.3.1995 addressed to the Deputy Registrar, Co-

operative Societies). The determination by the Deputy Registrar,

Cooperative Societies, cannot therefore be treated as a valid and

legitimate consideration. Acceptance or rejection on merits is another

matter, but non-consideration is just not understandable. The instant

non-consideration clearly invalidates the approval granted by the

Deputy Registrar, Co-operative Societies.

(viii)The veracity of the execution of the documents dated 11.11.1992

and 13.11.1992 by Pratima Chowdhury, was also examined by the

Arbitrator. In the above examination, the Arbitrator arrived at the

conclusion, that Pratima Chowdhury was in Bombay and not in Calcutta

when the above documents were executed. The above finding was

recorded on the basis of three witnesses produced on behalf of the

complainant (before the Arbitrator). While rejecting the conclusion

drawn by the Arbitrator, the Co-operative Tribunal overlooked the

statements of the witnesses produced by Pratima Chowdhury, merely

because the notary was an Advocate. The Co-operative Tribunal

reasoned, that the statement of S.N. Chatterjee, an Advocate, had to be

given more weightage, than the witnesses produced by Pratima

Chowdhury. The above determination at the hands of the Co-operative

Tribunal, besides being perverse, is also totally unacceptable in law. In

the facts and circumstances of the present case, the statement of the

notary should have been rejected and discarded, simply because the

notary in his deposition had acknowledged, that he did not issue any

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Page 58 notarial certificate in terms of Section 8 of the Notary Act. In the

absence of issuance of any such certificate, notarization of the

document dated 13.11.1992 was clearly subject to suspicion. The

conclusion drawn by the Co-operative Tribunal as also the High Court,

to the effect that the document dated 13.11.1992 was executed at

Calcutta, is therefore, based on no evidence whatsoever. The fact that

the document dated 13.11.1992 had not been executed in Calcutta, was

also sought to be substantiated by showing, that the registration number

of the Society was not depicted in the said letter, even though the said

letter was shown to have been executed at the residence of the

Secretary of the Society. It was reasoned, that the Secretary of the

Society would have supplied the aforesaid number, if the above

document had been executed at his residence. Having rejected the

credibility of the statement of S.N. Chatterjee (the notary), and having

not accepted the fact that the above document was executed at the

residence of Anil Kumar Sil, the Secretary of the Society, we find no

reason for not accepting the statements of the three witnesses

produced by Pratima Chowdhury, to show that she (Pratima

Chowdhury) was at Bombay on 11.11.1992, as well as, on 13.11.1992.

Herein again, the Cooperative Tribunal and the High Court, erred on the

face of the record, by not taking into consideration material facts,

available on the file of the case.

(ix)In the background of the factual position emerging from the

deliberations recorded hereinabove, it is also necessary to notice, that

the Arbitrator had placed heavy reliance on the fact, that Kalpana

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Page 59 Mukherjee had deposited rent on 21.10.1993 (payable to Pratima

Chowdhury), into the account of Pratima Chowdhury, by herself, filling

up the bank deposit voucher. Accordingly, the Arbitrator inferred, that

the property in question, even to the knowledge of Kalpana Mukherjee,

had not actually been transferred to her name by Pratima Chowdhury

(at least upto 21.10.1993). That was the reason, why Kalpana

Mukherjee had continued to deposit rent for flat no. 5D, into the account

of Pratima Chowdhury upto 21.10.1993. Coupled with the aforesaid

factual aspect, the Arbitrator placed great reliance on the letter dated

28.10.1993 addressed by Partha Mukherjee to Colgate Palmolive

(India) Limited, wherein, he described Pratima Chowdhury as the

“landlady”. Undoubtedly, if the documents relied upon by Kalpana

Mukherjee were genuine, Partha Mukherjee would not have

acknowledged the ownership of Pratima Chowdhury over flat no. 5D (on

28.10.1993). These aspects of the matter were totally overlooked by

the Co-operative Tribunal, as well as, by the High Court. These were

vital facts, and needed to be examined, if the order passed by the

Arbitrator was to be interfered with. In the absence of such

consideration, the findings of fact recorded by the Co-operative Tribunal

and by the High Court, are bound to be considered as perverse. Since

the factual position attributed to the actions of 21.10.1993 and

28.10.1993, which emanated and emerged from Kalpana Mukherjee

and Partha Mukherjee respectively, we are of the view that entire

sequence of transfer, is rendered doubtful and suspicious.

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Page 60 (x)The determination of the Arbitrator, on the subject of the transfer

of the covered garage, to the name of Kalpana Mukherjee was also

overlooked by the Co-operative Tribunal, as well as, by the High Court.

From the facts already narrated above, it is clear that Pratima

Chowdhury, had one covered garage space also. Whilst reference was

made about the details of the flat sought to be transferred, in the

transfer documents, no reference was made to the covered garage

space. Based on the letter dated 11.11.1992, and the document dated

13.11.1992, flat no. 5D was transferred to the name of Kalpana

Mukherjee. The instant transfer however did not include the covered

garage space. Thereafter, based on an agreement executed between

Kalpana Mukherjee (on the one hand), and the Society (on the other),

the said covered garage space was transferred to the name of Kalpana

Mukherjee, on 25.4.1995. The said transfer was not at the behest of, or

with the concurrence of Pratima Chowdhury. Therefore, according to

the view expressed by the Arbitrator, the covered garage space, must

be deemed to have never been transferred to Kalpana Mukherje by its

erstwhile owner. The Arbitrator also expressed the view, that the

agreement dated 25.4.1995 could not have been executed without the

participation of Pratima Chowdhury. The above factual position has not

been disputed at the hands of Kalpana Mukherjee, before this Court.

The above reasoning, in our considered view, was fully justified. The

instant aspect of the matter was also totally overlooked by the Co-

operative Tribunal, as well as, by the High Court. For the above reason

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Page 61 also, the findings of the fact, recorded by the Co-operative Tribunal and

by the High Court, are bound to be treated as perverse.

29.For all the reasons recorded by us in foregoing sub-paragraphs,

we are of the view that the Co-operative Tribunal as well as the High

Court, seriously erred in recording their conclusions. We are satisfied in

further recording, that the Arbitrator was wholly justified in allowing the

Dispute Case filed by Pratima Chowdhury, by correctly appreciating the

factual and legal position.

30.The Co-operative Tribunal as well as the High Court, had invoked

the principle of justice and equity, and the doctrine of fairness, while

recording their eventual findings in favour of Kalpana Mukherjee. It is,

therefore, necessary for us, to delve upon the above aspect of the

matter. Before we venture to examine the instant controversy in the

above perspective, it is necessary to record a few facts. It is not a

matter of dispute, that for a long time Pratima Chowdhury had been

residing at Bombay. She was residing at Bombay in the house of H.P.

Roy and Bani Roy. Bani Roy, as stated above, is the sister of Pratima

Chowdhury. H.P. Roy is a wealthy person. Partha Mukherjee son of

Kalpana Mukherje, is an engineering graduate from IIT, Kharagpur. He

also possesses the qualification of MBA, which he acquired from

Ahmedabad. Originally Partha Mukherjee was employed as Sales

Manager/Regional Manager with Colgate Palmolive (India) Limited, at

Bombay. Partha Mukherjee married Sova Mukherjee (the daughter of

H.P. Roy), whilst he was posted at Bombay in 1987. Soon after his

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Page 62 marriage, Partha Mukherjee and Sova Mukherjee also started to live in

the house of H.P. Roy (father-in-law of Partha Mukherjee). The

evidence available on the record of the case reveals, that Pratima

Chowdhury treated Sova Mukherjee as her daughter, and Partha

Mukherjee as her son. In 1992, Partha Mukherjee was transferred from

Bombay to Calcutta. Immediately on his transfer, Pratima Chowdhury

accommodated him in flat no. 5D. Subsequently, Colgate Palmolive

(India) Limited entered into a lease and licence agreement, in respect of

flat no. 5D with Pratima Chowdhury, so as to provide residential

accommodation to Partha Mukherjee (as per the terms and conditions

of his employment). Obviously, Partha Mukherjee was instrumental in

the execution of the above lease and licence agreement. In order to

deposit monthly rent payable to Pratima Chowdhury (by Colgate

Palmolive (India) Limited), Partha Mukherjee opened a bank account in

the name of Pratima Chowdhury, jointly with himself. He exclusively

operated the above account, for deposits as well as for withdrawals.

Not only that, the findings recorded by the Arbitrator indicate that the

letter dated 11.11.1992 written by Pratima Chowdhury was drafted by

Partha Mukherjee. The aforesaid conclusion was drawn from the fact

that the manuscript of the original was in the handwriting of Partha

Mukherjee. All the above facts demonstrate, a relationship of absolute

trust and faith between Pratima Chowdhury and Partha Mukherjee. The

aforesaid relationship emerged, not only on account of the fact that

Partha Mukherjee was married to Sova Mukherjee (the niece of Pratima

Chowdhury), but also on account of the fact, that Partha Mukherjee and

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Page 63 his wife Sova Mukherjee soon after their marriage lived in the house of

H.P. Roy (husband of the sister of Pratima Chowdhury). They resided

together with Pratima Chowdhury till 1992, i.e., for a period of more than

a decade, before Partha Mukherjee was transferred to Calcutta. In our

considered view the relationship between Partha Mukherjee and

Pratima Chowdhury would constitute a fiduciary relationship. Even

though all the above aspects of the relationship between the parties

were taken into consideration, none of the adjudicating authorities dealt

with the controversy, by taking into account the fiduciary relationship

between the parties. When parties are in fiduciary relationship, the

manner of examining the validity of a transaction, specifically when

there is no reciprocal consideration, has to be based on parameters

which are different from the ones applicable to an ordinary case.

Reference in this behalf, may be made to the decision rendered by this

Court in Subhas Chandra Das Mushib vs. Ganga Prosad Das Mushib,

AIR 1967 SC 878, wherein this Court examined the twin concepts of

“fiduciary relationship” and “undue influence” and observed as under:

“We may now proceed to consider what are the essential in-

gredients of undue influence and how a plaintiff who seeks relief

on this ground should proceed to prove his case and when the

defendant is called upon to show that the contract or gift was not

induced by undue influence. The instant case is one of gift but it

is well settled that the law as to undue influence is the same in

the case of a gift inter- vivos as in the case of a contract.

Under s. 16 (1) of the Indian Contract Act 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. This shows that the

court trying a case of undue influence must consider two things to

start with, namely, (1) are the relations between the donor and

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Page 64 the donee such that the donee is in a position to dominate the will

of the donor and (2) has the donee used that position to obtain an

unfair advantage over the donor'?

Sub-section (2) of the section is illustrative as to when a person is

to considered to be in a position to dominate the will of another.

These are inter alia (a) where the donee holds a real or apparent

authority over the donor or where he stands in a fiduciary relation

to the donor 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.

Sub-section (3) of the section throws the burden of proving that a

contract was not induced by undue influence on the person

benefiting by it when two factors are found against him, namely

that he is in a position to dominate the will of another and the

transaction appears on the face of it or on the evidence adduced

to be unconscionable.

The three stages for consideration of a case of undue influence

were expounded in the case of Ragunath Prasad v. Sarju Prasad

and others (AIR 1924 PC 60) in the following words :- "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-namely, 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. If the

transaction appears to be unconscionable, then 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.”

(emphasis is ours)

The subject of fiduciary relationship was also examined by this Court in,

Krishna Mohan Kul alias Nani Charan Kul vs. Pratima Maity, (2004) 89

SCC 468, wherein it was held as under:

“…..When fraud, mis-representation or undue influence is alleged

by a party in a suit, normally, the burden is on him to prove such

fraud, undue influence or misrepresentation. But, when a person

is in a fiduciary relationship with another and the latter is in a

position of active confidence the burden of proving the absence of

fraud, misrepresentation or undue influence is upon the person in

the dominating position and he has to prove that there was fair

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Page 65 play in the transaction and that the apparent is the real, in other

words that the transaction is genuine and bona fide. In such a

case the burden of proving the good faith of the transaction is

thrown upon the dominant party, that is to say, the party who is in

a position of active confidence. A person standing in a fiduciary

relation to another has a duty to protect the interest given to his

care and the Court watches with jealously all transactions

between such persons so that the protector may not use his

influence or the confidence to his advantage. When the party

complaining shows such relation the law presumes everything

against the transaction and the onus is cast against the person

holding the position of confidence or trust to show that the

transaction is perfectly fair and reasonable, that no advantage

has been taken of his position. This principle has been engrained

in Section 111 of the Indian Evidence Act, 1872 (in short the

'Evidence Act'). The rule here laid down is in accordance with a

principle long acknowledged and administered in Courts of Equity

in England and America. This principle is that he who bargains in

a matter of advantage with a person who places confidence in

him is bound to show that a proper and reasonable use has been

made of that confidence. The transaction is not necessarily void

ipso facto, nor is it necessary for those who impeach it to

establish that there has been fraud or imposition, but the burden

of establishing its perfect fairness, adequacy and equity is cast

upon the person in whom the confidence has been reposed. The

rule applies equally to all persons standing in confidential

relations with each other. Agents, trustees, executors,

administrators, auctioneers, and others have been held to fall

within the rule. The Section requires that the party on whom the

burden of proof is laid should have been in a position of active

confidence where fraud is alleged, the rule has been clearly

established in England that in the case of a stranger equity will

not set aside a voluntary deed or donation, however, improvident

it may be, if it be free from the imputation of fraud, surprise,

undue influence and spontaneously executed or made by the

donor with his eyes open. Where an active confidential, or

fiduciary relation exists between the parties, there the burden of

proof is on the donee or those claiming through him. It has further

been laid down that where a person gains a great advantage over

another by a voluntary instrument, the burden of proof is thrown

upon the person receiving the benefit and he is under the

necessity of showing that the transaction is fair and honest.

13. In judging of the validity of transactions between persons

standing in a confidential relation to each other, it is very material

to see whether the person conferring a benefit on the other had

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Page 66 competent and independent advice. The age or capacity of the

person conferring the benefit and the nature of the benefit are of

very great importance in such cases. It is always obligatory for

the donor/beneficiary under a document to prove due execution

of the document in accordance with law, even de hors the

reasonableness or otherwise of the transaction, to avail of the

benefit or claim rights under the document irrespective of the fact

whether such party is the defendant or plaintiff before Court.

14. It is now well established that a Court of Equity, when a

person obtains any benefit from another imposes upon the

grantee the burden, if he wishes to maintain the contract or gift, of

proving that in fact he exerted no influence for the purpose of

obtaining it. The proposition is very clearly started in Ashburner's

Principles of Equity, 2nd Ed., p.229, thus:

"When the relation between the donor and donee at or

shortly before the execution of the gift has been such as to

raise a presumption that the donee had influence over the

donor, the court sets aside the gift unless the donee can

prove that the gift was the result of a free exercise of the

donor's will."”

(emphasis is ours)

The above conclusions recorded by this Court, came to be reiterated

recently in Anil Rishi Vs. Gurbaksh Singh, (2006) 5 SCC 558.

31.While deciding the proposition in hand, we must keep in mind the

law declared by this Court on the subject of fiduciary relationship. We

will also proceed by keeping in mind, what we have already concluded

in the preceding paragraph, i.e., that relationship between Partha

Mukherjee and Pratima Chowdhury was a relationship of faith, trust and

confidence. Partha Mukherjee was in a domineering position. He was

married to Sova Mukherjee. Sova Mukherjee is the daughter of H.P.

Roy. Pratima Chowdhury has lived for a very long time in the house of

H.P. Roy. During that period (after his marriage) Partha Mukherjee also

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Page 67 shared the residential accommodation in the same house with Pratima

Chowdhury, for over a decade. In Indian society the relationship

between Partha Mukherjee and Pratima Chowdhury, is a very delicate

and sensitive one. It is therefore, that Pratima Chowdhury extended all

help and support to him, at all times. She gave him her flat when he

was transferred to Calcutta. She also extended loans to him, when he

wanted to set up an independent business at Bombay. These are

illustrative instances of his authority, command and influence.

Instances of his enjoying the trust and confidence of Pratima

Chowdhury include, amongst others, the joint account of Pratima

Chowdhury with Partha Mukherjee, which the latter operated

exclusively, and the drafting of the letters on behalf of Pratima

Chowdhury. In such fact situation, we are of the view, that the onus of

substantiating the validity and genuineness of the transfer of flat no. 5D,

by Pratima Chowdhury, through the letter dated 11.11.1992 and the

document dated 13.11.1992, rested squarely on the shoulders of

Kalpana Mukherjee. Because it was only the relationship between

Partha Mukherjee and Pratima Chowdhury, which came to be extended

to Kalpana Mukherjee. The document dated 13.11.1992 clearly

expressed, that the above transfer was without consideration. Kalpana

Mukherjee in her written reply before the Arbitrator asserted, that the

above transfer was on a consideration of Rs.4,29,000/-. The Arbitrator

in his order dated 5.2.1999 concluded, that Kalpana Mukherjee could

not establish the passing of the above consideration to Pratima

Chowdhury. The Cooperative Tribunal, as well as, the High Court,

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Page 68 despite the factual assertion of Kalpana Mukherjee were of the view,

that passing of consideration was not essential in determination of the

genuineness of the transaction. We are of the view, that the

Cooperative Tribunal, as well as, the High Court seriously erred in their

approach, to the determination of the controversy. Even though the

onus of proof rested on Kalpana Mukherjee, the matter was examined

by requiring Pratima Chowdhury to establish all the alleged facts. We

are of the view, that Kalpana Mukherjee miserably failed to discharge

the burden of proof, which essentially rested on her. Pratima

Chowdhury led evidence to show, that she was at Bombay on

11.11.1992 and 13.11.1992. In view of the above, the letter dated

11.11.1992 and the document dated 13.11.1992, shown to have been

executed at Calcutta could not be readily accepted as genuine, for the

said documents fell in the zone of suspicion, more so, because the

manuscript of the letter dated 11.11.1992 was in the hand-writing of

Partha Mukherjee. Leading to the inference, that Partha Mukherjee was

the author of the above letter. It is therefore not incorrect to infer, that

there seems to be a ring of truth, in the assertion made by Pratima

Chowdhury, that Partha Mukherjee had obtained her signatures for

executing the letter and document referred to above. We find no

justification whatsoever for Pratima Chowdhury, to have transferred flat

no. 5D to Kalpana Mukherjee, free of cost, even though she had

purchased the same for a consideration of Rs. 4 lakhs in the year 1987.

Specially so, when she had no direct intimate relationship with Kalpana

Mukherjee. By the time the flat was transferred, more than a decade

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Page 69 had passed by, during which period, the price of above flat, must have

escalated manifold. Numerous other factual aspects have been

examined by us above, which also clearly negate the assertions made

by Kalpana Mukherjee. The same need not be repeated here, for

reasons of brevity. Keeping in mind the above noted aspects, we are of

the considered view, that invocation of the principle of justice and

equity, and the doctrine of fairness, would in fact result in returning a

finding in favour of Pratima Chowdhury, and not Kalpana Mukherjee.

32. For the reasons recorded hereinabove, the instant appeal is

allowed, the order dated 16.5.2002 passed by the Co-operative

Tribunal, and the order dated 14.2.2006 passed by the High Court, are

hereby set aside. The determination rendered by the Arbitrator in his

award dated 5.2.1999, is hereby affirmed. Kalpana Mukherjee is

directed to handover the possession of flat no. 5D to Pratima

Chowdhury, within one month from today. The Society is also directed

to retransfer the shares of the Society earlier held by Pratima

Chowdhury, and the ownership rights of flat no. 5D to the name of

Pratima Chowdhury, without any delay.

………………………… .CJI.

(P. Sathasivam)

…………………………….J.

(Jagdish Singh Khehar)

New Delhi;

February 10, 2014.

69