Delhi High Court
Kusum Sanghi And Ors. vs Raj Kishan Das on 19 September, 2013
Author: Reva Khetrapal
Bench: Reva Khetrapal, Pratibha Rani
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA(OS) 2-5/2006
KUSUM SANGHI AND ORS. ..... Appellants
Through: Ms. Anusuya Salwan and Mr. Vikas
Sood, Advocates.
versus
RAJ KISHAN DAS ..... Respondent
Through: Mr. Amit S. Chadha, Sr. Advocate
with Mr. Kunal Sinha, Advocate.
% Date of Decision : September 19, 2013
CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL
HON'BLE MS. JUSTICE PRATIBHA RANI
JUDGMENT
: REVA KHETRAPAL, J.
1. This appeal is directed against the order dated 2 nd January, 2006 passed by the learned Single Judge in CS(OS) 538/2005.
2. The facts giving rise to the appeal are that on 19th December, 1995, the Respondent/Plaintiff filed a suit for mandatory and permanent injunction initially against the Appellant No.1 (Defendant No.1) in respect of property bearing No.9, Western Avenue, Maharani Bagh, New Delhi admeasuring about 233.31 sq. yds. After the written statement was filed by the Appellant No.1, the Appellant No.2 (daughter of Appellant No.1), Appellant No.3 (husband of Appellant No.2) and Appellant No.4 (son of Appellant No.1) were also impleaded as Defendant Nos.2, 3 and 4 respectively.
RFA (OS) 2-5/2006 Page 1 of 263. In the suit, the Plaintiff claimed to be the original perpetual sub-lessee in respect of the aforesaid plot of land in pursuance to a sub-lease executed in favour of the Plaintiff. The perpetual lease was in favour of the Maharani Bagh Co-operative House Building Society dated 6.1.1982. The sub-lease dated 7.1.1982 is in favour of the Plaintiff. The aforesaid sub-lease was registered in the office of the Sub-Registrar, Delhi on 11.1.1982.
4. It is averred in the plaint that the Plaintiff and his family members used to reside at 3, Pusa Road, New Delhi. The Defendant No.1 is the elder sister of the Plaintiff who was married to Shri O.P. Sanghi (since deceased) and was stated to be residing at 4, Ring Road, Kilokri, New Delhi.
5. It is alleged that the Plaintiff had paid all the dues under the lease from time to time as also the dues of the Society. As per the terms of the lease, the Plaintiff was to construct a residential unit on the property in question within two years of the execution of the lease, for which he got various extensions of time and paid various dues for the grant of such extensions. Finally, the Plaintiff got the plan of the property sanctioned vide sanction letter dated 28.10.1994. The Plaintiff started construction as per the sanction in or about November-December, 1994. A basement, ground floor, first floor and a barsati floor were constructed. C-Form was granted on 23.9.1995 and D-Form on 9.10.1995.
6. The Plaintiff claims that since 4, Ring Road, Kilokri, New Delhi, residence of Defendant No.1 and her son, was in proximity to the suit property, the same was being used as a convenient place for RFA (OS) 2-5/2006 Page 2 of 26 coordinating the construction on the property and the keys used to be left by the Plaintiff with his sister (the Defendant No.1).
7. It is further asserted in the plaint that the Plaintiff wanted to stay in the first floor and the barsati and let out the basement and the ground floor to enable the Plaintiff to re-pay the loans that he had taken for re-constructing this property. In total, the Plaintiff had taken about ` 9 Lacs as loan for constructing this property. Accordingly, the Plaintiff shifted into the first floor to enable him to complete the basement and other finishing work. It is stated that on 18.12.1995, the Plaintiff realized that the intentions of the Defendant No.1 had become dishonest as she did not give the keys of the ground floor to him which had been given to her, in trust, for convenience. The Plaintiff also realized that during the time construction was going on, the Defendants seem to have attempted to create some evidence in their favour for claiming some rights in the property. These rights are stated to be claimed on the basis of the fact that the Defendant No.2 is having half share in the property by virtue of a trust created in her favour by the Plaintiff and his father Shri Jai Kishan Dass. It is stated that the Defendants do not have any right, title or interest in the property and were not handing over the keys of the ground floor and basement and further threatening to induct third persons in the property. In view of the aforesaid facts, a decree of permanent/prohibitory injunction had been prayed for to restrain the Defendants from interfering with the possession of the Plaintiff in the property in suit. A further decree of mandatory injunction had been RFA (OS) 2-5/2006 Page 3 of 26 prayed for handing over the keys of the ground floor and the basement to the Plaintiff.
8. The defence of the Defendants as it emerges from the written statement of the Defendant No.1 Mrs. Kusum Sanghi is that in the year 1981-82, her husband Shri O.P. Sanghi had suggested to her father Shri Jai Kishan Dass that there was an opportunity to invest in a residential plot of land in Maharani Bagh, New Delhi and pursuant to the same, a plot of land, i.e., the suit premises was applied for, in the name of the Plaintiff, with an understanding that the plot would be acquired partly for the benefit of the Plaintiff, and partly for the benefit of her children as and when they attained majority and that Shri Jai Kishan Dass would designate one of her children who would be the beneficiary of the half share in the said property. It was claimed that a sum of ` 8,000/- was paid by her on behalf of her daughter Priya (Defendant No.2) to the said Shri Jai Kishan Dass. It was further claimed that after the Defendant No.2 attained majority on 27th January, 1988, Shri Jai Kishan Dass, in the presence of near relations, declared that half share of the suit property was being held in trust by the Plaintiff for the benefit of the Defendant No.2, who would first construct a residential building on the said plot against her half share, i.e., basement and the ground floor, and thereafter the Plaintiff could carry out further construction, i.e., first floor and second floor against his half share.
9. It was further asserted in the written statement filed by the Defendant No.1 that Shri Jai Kishan Dass and the Plaintiff confirmed delivery of the possession of the suit land to Defendant No.2, who, in RFA (OS) 2-5/2006 Page 4 of 26 turn, in March, 1988 took the possession of the plot of land. Thereafter, on or about July, 1988, Defendant No.2 approached Mr. H.V. Mahendru of M/s. Designs Atelier Architects, for drawing up the plans of the residential building on the said property. All expenses in connection with the same were paid and discharged by the Defendant No.2. The Defendant No.2 got the signature of the Plaintiff on the plot plan and then made application to the Municipal Corporation for sanction of the building plans. The building plans were initially sanctioned for residential building on the ground floor, first and barsati floors in 1989.
10. The written statement also states that at all times it was clearly agreed and understood that the residential plot of land standing in the name of the Plaintiff was held in trust in respect of the half share in the property for the benefit of Defendant No.2. It is further stated that after obtaining the sanction of the building plans in October, 1991, Defendant No.2 appointed M/s. Gannon Dunkerly & Co. for undertaking the construction of the residential unit falling to her share. M/s. Gannon Dunkerly & Co. duly carried out the construction of the building. The liability of the Defendant No.2 for the total cost of construction of the structure of the basement and ground floor worked out to ` 3,39,864/-. In addition to the above, Defendant No.2 incurred a liability of ` 3,57,459/- towards electrical, plumbing, wood work, flooring and other material for the basement and ground floor in the property. The Plaintiff did not incur any expenses in connection with the construction or for any other purposes in the building on the basement and ground floor.
RFA (OS) 2-5/2006 Page 5 of 2611. It is asserted in the written statement that after completion of the construction of the basement and the ground floor, Defendant No.2 moved into the suit premises on 25 th November, 1995 and started living there with her husband. After shifting to the suit property, Defendant No.2 obtained for herself a ration card, which was issued to her on 18.12.1995 by the Ration Office, Okhla, New Delhi. A domestic gas connection, a telephone connection and an insurance cover by the New India Assurance Company Limited were also obtained by the Defendant No.2. Defendant Nos.2 and 3 were thus continuously living in the said premises and in possession and occupation of the said portion of the property. After the completion of construction of the basement and ground floor, the Plaintiff began to undertake the construction on the first and barsati floor, which commenced in November-December, 1994 and was completed in November, 1995. In the first week of December, 1995, the Defendant No.1, the mother of Defendant No.2, approached the Plaintiff on behalf of the Defendant No.2 with a request that necessary application be made to Maharani Bagh Cooperative Society for proper mutation of the property in the name of Defendant No.2 and Plaintiff. At this stage, the Plaintiff seems to have had an afterthought in view of the substantial rise in property prices during the last few years. The Plaintiff filed the present suit immediately thereafter with the malafide intention of taking away the share of the Defendant No.2 in the plot of land as well as the basement and ground floor constructed portion.
RFA (OS) 2-5/2006 Page 6 of 2612. A perusal of the record shows that when the suit came up for hearing, the learned trial court examined the plaintiff and defendants 1 and 2 under Order 10 Rule 2 of the Code with a view to elucidate the controversy in the suit. Their respective statements read as under:-
Plaintiff Raj Kishan Dass stated as follows :-
"In the year 1991, construction of one room on the land in suit was made in order to get away from the penal rules of DDA. Thereafter in the year 1994, the basement in the property in dispute was constructed. The construction were on and the ground floor, first floor and barsati of the property in dispute were completed by the end of December, 1995. I had engaged a labour contractor, Zamir Ahmed, who provided labour, and the material was purchased by me and in that purchase, I had taken the help of defendant No.1 to get the material at the right price. The entire money was paid by me. The plans of the entire building on the property in dispute were prepared by architect Mahendroo to whom defendant No.1 had taken me and helped me in getting the plans prepared. I took a loan of Rs.9 Lakhs from different financiers. The details of loans have been filed through documents.
RO & AC Sd/-
Sd/-
JUDGE"
Defendant No. 2 Ms. Priya Gupta stated as follows :-
"The trust about which pleadings have been made in para 12 of the written statement filed by me was not written. It was only oral. I never paid any money to Maharani Bagh Cooperative House Building Society. Since the land of the property in dispute was in the RFA (OS) 2-5/2006 Page 7 of 26 name of plaintiff, the sanction plans were got in the name of Plaintiff as the same could not have been in my name. Since under the trust right to construct the basement and the ground floor was with me and the right to construct the first floor was with the plaintiff, I never made any attempt to get the land in dispute partitioned.
RO & AC Sd/-
Sd/-
Judge"
Defendant No. 1 Ms. Kusum Sanghi stated as follows :-
"The trust about which pleadings have been made in para 12 of the written statement filed by me was not written. It was only oral.
RO & AC Sd/-
Sd/-
Judge"
13. It may be noticed at this juncture that the Plaintiff had filed an application for appointment of a Receiver and the said application was decided by the learned Single Judge vide order dated 2.4.1997, whereby a Receiver was appointed to take possession from the Defendants of the basement and ground floor. This order was upheld in appeal by the order of the Division Bench dated 9.4.1997. A Special Leave Petition against the said order was dismissed on 18.2.2000.
14. On 2nd February, 1999, on the basis of the pleadings, issues were framed. Issue No.2 relating to the validity of the trust created in RFA (OS) 2-5/2006 Page 8 of 26 favour of the Defendant No.2 was directed to be treated as a preliminary issue. On 17.7.2001, Issue No.2 was decided in favour of the Plaintiff and it was held that the trust set up by the Defendants was legally not a valid trust. However, simultaneously it was observed that any observations made in the order that may have any effect or bearing in respect of the facts pertaining to the remaining issues will not tantamount to expression of opinion on merits.
15. After the aforesaid findings were rendered on Issue No.2, the matter was posted before the learned Single Judge for hearing on the remaining issues on 15.9.2005. On the said date, the learned Single Judge was of the opinion that the order deciding the preliminary issue was not an interim order but "a final adjudication of the suit" and required the counsel for the Defendants to satisfy the Court as to whether other issues really survived for consideration especially when the nature of the suit was one of injunction.
16. It may be noted at this juncture that an application had been filed by the Defendants to bring on record documents to show that the Defendants had been following up the matter in respect of construction of the ground floor and basement with the Delhi Development Authority and other authorities. The said application came up for consideration before the learned Single Judge on January 2, 2006, i.e., the date on which the impugned judgment was passed decreeing the suit.
17. The relevant portion of the said judgment, for the sake of ready reference, is extracted hereinbelow:-
RFA (OS) 2-5/2006 Page 9 of 26"12. Learned counsel for the defendants submits that defendants have filed even an application to bring on record documents to show that they were following up the matter in respect of construction with the DDA and other authorities. Learned counsel further states that if issue no.1 was the only issue to be considered, there would have been no occasion to frame issue no.3.
13. I am unable to persuade myself to agree with this submission of learned counsel for the defendants. It must be appreciated that all the rights of the defendants' claim arise from the preliminary plea of there being a trust created in favor of defendant no.2 by the father of the plaintiff and defendant no.1 The written statement is replete with these averments. The written statement goes on to state that after defendant attained majority, father of the plaintiff in a family function put forth this creation of trust. It is in pursuance thereto that in para 19 of the written statement averments have been made that the basement and ground floor of the premises were created and used for occupation of defendant no.2 and her family members.
14. Once issue no.1 itself is decided against the defendants and the said decision is accepted, it is obvious that there is no creation of any valid trust in favour of defendant no.2. The defendant no.2 thus cannot claim any rights in the property."
18. Aggrieved by the aforesaid order, the present appeal has been preferred by the Defendants. We have heard Ms. Anusuya Salwan, Advocate on behalf of the Appellants/Defendants and Mr. Amit Chadha, Senior Advocate on behalf of the Respondent/Plaintiff.
19. Assailing the impugned order, it is contended on behalf of the Appellants that the learned Single Judge erred in holding that once RFA (OS) 2-5/2006 Page 10 of 26 Issue No.2 was decided against the Defendants, no other issue survived for consideration. Learned counsel submits that in case the only issue was with respect to the creation of the trust then there would have been no necessity for framing Issue No.3. It is further submitted that at the time of framing of issues, the counsel for the Plaintiff/Respondent had argued that in view of Section 5 of the Indian Trust Act, no other issue would arise for consideration. However, the said plea had been rejected by the learned Single Judge by order dated 2.2.1999 in view of the averments made in para 19 of the written statement and it was for this reason that Issue No.3 was framed.
20. We deem it appropriate to reproduce the averments made in para 19 of the written statement, which according to us are crucial for determining the controversy between the parties. The said paragraph of the written statement reads as under:-
"19. Defendant No.2 states that till the end of November 1995 the Plaintiff herein duly acknowledged and accepted that the basement and the ground floor of the property belong to and vest in Defendant No.2. The Plaintiff did not raise any claim adverse to the right, title and interest of Defendant No.2 in the basement and ground floor as well as in 1/2 share in the plot of land."
21. A look now at the order dated 2.2.1999, which reads as under:-
"2.02.99 Present : Mr.Arun Mohan, Sr.Adv. with Ms.Vaishalee Mehra for the Plaintiff.
Mr.P.Nandrajog for the defendants.RFA (OS) 2-5/2006 Page 11 of 26 S. No. 2968/95
Heard learned counsel for the parties. Learned counsel for the plaintiff states that on the pleas made in the written statement filed by defendant 1 to 3 no issues arise. The main thrust of his argument is that in view of Section 5 of the Indian Trusts Act there cannot be a plea of oral trust. He further says that there is no plea either of benami transaction or of licence coupled with interest. He further says that there is no plea of any written agreement between the plaintiff/defendants.
On the other hand learned counsel for the defendants says that in that in fact the prayers made in the plaint also relate to the basement and the ground floor constructed on the land in dispute. He further says that he would be making submission on Section 5 of the Indian Trusts Act on the grounds of principles of resultant trust arising out of proprietary stock.
On perusal of written statement filed by defendants 1 to 3 it transpires that there is a plea that defendant No. 2 appointed M/s Gannon Dunkerly & Co. for undertaking the construction of the residential units falling to her share. M/s Gannon Dunkerly & Co. duly carried out the construction of the building. Learned counsel for the defendants says that this construction related to basement and ground floor. It is further averred in the written statement that in the constructions, defendant No. 2 incurred an expenditure of 3,39,864/-. It is also stated that defendant No. 2 incurred a further liability of R. 3,57,459/ towards electrical, plumbering, woodswork, flooring etc. for the basement and the ground floor of the property in dispute. It is also stated that the plaintiff did not incur any expenditure in connection with the construction in the building on the basement and ground floor. In para 19 of the written statement it has further been state that till the end of November, 1995, the plaintiff duly acknowledged and accepted that the basement and the RFA (OS) 2-5/2006 Page 12 of 26 ground floor of the property belonged to and vest in defendant No.2 and the plaintiff did not raise any claim adverse to the right, title and interest of defendant No.2 in the basement and ground floor of the property as well as in ½ share in the plot of land.
In the aforesaid circumstances, it cannot be said that no issues arise. Accordingly, the following issues are framed:
1. Whether any trust was created in favour of defendant No.2 as alleged in the written statement?
2. Whether a trust as alleged could be a valid trust in view of the provisions of Section 5 of the Indian Trust Act?
3. Whether the defendant No. 2 has right, title or interest as owner in the basement and ground floor of the property in dispute and whether the plaintiff did not raise any claim adverse to any right, title and interest of defendant No. 2 in this case the same as well as in 1/2 share in the land in dispute?
4. In case the issue 1 and 2 are decided against the defendants, whether the defendants can still raise the plea of ownership of the basement and ground floor in the property in dispute?
5. Relief.
Issues read over. No other issue is pressed.
List on 10th August, 1999 for hearing and disposal or Issue No.2 as preliminary issue. Parties may file written submission, if they so choose. Counsel for the defendants states that he will file written submissions within 6 weeks with advance copy to learned counsel for the plaintiff. Learned counsel for the plaintiff may file written submissions within 2 weeks thereafter with advance copy to counsel for the defendants."
RFA (OS) 2-5/2006 Page 13 of 2622. Learned counsel for the Appellants further contends that the Appellants were in possession of the suit property, i.e., basement and the ground floor on the date of the institution of the suit on 19 th December, 1995. The Appellants had carried out construction in the suit property with the knowledge of the Respondent, which is now being sought to be explained away by the Respondent by contending that the Appellant No.1 in view of her close proximity to the suit property was coordinating the construction work at the site and the keys had, therefore, been handed over by the Respondent to the Appellant No.1 (his sister) for the aforesaid purpose.
23. It is submitted that the Appellants have placed unimpeachable documents on record in support of their case that the basement and ground floor of the suit property were got constructed by them from their own resources and the Appellant No.2 had paid penalties towards the late construction to the DDA from her own account. All this time, the Respondent/Plaintiff stood by and allowed them to raise the construction. The keys of the basement and the ground floor throughout this period were admittedly with the Appellants. The Appellants not only raised the aforesaid construction from their own resources but entered into agreements with M/s. Gannon Dunkerly & Co. for the aforesaid purpose.
24. The Appellants had also received show cause notices from the MCD in the name of the Appellant No.2, Ms. Priya Sanghi in respect of the excess coverage on the basement, dated 22.10.1992 and 13.7.1992. The aforesaid show cause notices also bear out the contention of the Appellants that the Appellants had commenced RFA (OS) 2-5/2006 Page 14 of 26 construction in the suit premises in 1991 and the building plans, which were got re-validated on 16.10.1994, reflect that a basement and ground floor was in existence at that time, and belie the Respondent's case that construction was commenced in 1994. Further, the correspondence with M/s. Gannon Dunkerly & Co. showing construction of superstructure of basement and ground floor done by it during 1991 to 1994 has been placed on record as also the construction record maintained at site by M/s. Gannon Dunkerly & Co. filed by the said company to prove that it had effected civil construction. The bills and vouchers of suppliers, showing purchase of materials by Appellant No.2 used in the building, and proof of occupation by Appellant No.2 and her husband (Appellant No.3) of the basement and ground floor in November, 1995, viz., gas connection, ration card and insurance documents, have been placed on record in this regard. The learned Single Judge, however, without considering the aforesaid documents proceeded to pass the impugned order, which has resulted in grave prejudice to the Appellants.
25. Reliance was placed by learned counsel for the Appellants on the following judgments:-
(i) Hari Mohan & Anr. vs. Smt. Maya Devi & Anr., AIR 2012 DELHI 24.
(ii) Vijayalakshmi vs. Sulochana (Deceased) and Ors., 2010 Law Suit (Mad) 2487.
(iii) B.L. Sreedhar and Ors. vs. K.M. Munireddy (dead) and Ors., 2002 (9) SCALE 183 = (2003) 2 SCC 355.RFA (OS) 2-5/2006 Page 15 of 26
(iv) Mukhinder Singh (Deceased) through LRs and Others vs. Gurbux Singh and Others, ILR (2012) IV DELHI 578.
26. Mr. Amit S. Chadha, learned senior counsel for the Respondent/Plaintiff, on the other hand, sought to rebut the contentions of the Appellants that:
(i) Issue No.3 is independent of and not dependent on Issue Nos.1 and 2 and
(ii) the Appellants have constructed ground floor and basement which the Respondent has allowed them to construct and, therefore, the Respondent is estopped from denying the Appellants' title in the suit property.
27. Learned counsel contended that the foundation and edifice of the Appellant No.2's case is that a trust was created in her favour. Once it is held by this Court that there was no trust, in law, the Appellant No.2 has no right or title in the property and her status is that of a trespasser. Learned counsel further contended that the whole story of trust is a concocted one with a view to get out of the provisions of the Benami Transactions (Prohibition) Act, 1988. He heavily relied upon the findings rendered by the learned Single Judge in his order dated 17.7.2001 pertaining to Issue No.2. Learned counsel submitted that the plea of estoppel is a plea in equity and there would be no question of equity in favour of a person who falsely takes a plea of creation of trust. He also contended that the right of pleading trust, being legally unenforceable, the plea of estoppel must also fail since for estoppel also there has to be a right which is legally RFA (OS) 2-5/2006 Page 16 of 26 enforceable. Finally, he contended that the only right which the Appellants could have claimed was not of ownership but the right to recover money for the construction carried on by them but they had filed no counter-claim in this regard. He placed reliance upon the decision of the Supreme Court in R.S. Maddanppa (Deceased) after him by his Legal Representatives vs. Chandramma & Anr., AIR 1965 SC 1812 to urge that the Appellants are in effect putting forth a case of family settlement, which case was never set up by the Appellants before the trial court and the Appellants cannot be allowed to set up a new case for the first time in appeal. He also relied upon the aforesaid judgment to contend that when a man knowing fully well that he has no title to property spends money on improving it, he cannot be permitted to deprive the original owner of his right of possession of the property.
28. We have carefully considered the rival submissions of the parties and scrutinized the record.
29. We note at the outset that no evidence has been adduced in the instant case. Issue No.2 was treated as a preliminary issue and decided by the learned Single Judge and thereafter the impugned judgment was rendered decreeing the suit on the ground that once Issue No.2 is decided against the Appellants and it is held that there is no creation of any valid trust in favour of Appellant No.2, the Appellant No.2 cannot claim any rights in the suit property.
30. In our opinion, the aforesaid contentions of the counsel for the Respondent are misconceived. If, in fact, the Appellants had no right, title or interest in the suit property, the Respondent who claims to be RFA (OS) 2-5/2006 Page 17 of 26 the sole owner of the property would not have stood by and allowed the Appellants to raise construction on the suit property. On one hand, the Appellants claim to have incurred the complete cost of construction of the basement and ground floor on the plot and also paid all the charges to the local authorities with respect to the construction thereof and on the other, the Respondent has contended himself by vaguely denying that claim. Then again, the documents filed by the Appellants along with the written statement have not been denied by the Respondent nor any documents to rebut the aforesaid documents have been placed on record. The bundle of documents filed by the Appellants to prove that the construction of the basement and ground floor was carried on by the Appellants and the possession of the suit property was throughout with the Appellants (which fact is again not denied in the plaint) in our opinion, deserve consideration.
31. As regards the plea of estoppel, the basis of the same has been laid down in paragraph 19 of the written statement reproduced hereinabove. In the said para of the written statement, the Appellant No.2 has made a categorical statement that till the end of November, 1995 the Respondent/Plaintiff duly acknowledged and accepted that the basement and ground floor of the property belonged to and vested in the Appellant No.2. It is further pleaded that the Respondent/Plaintiff did not raise any claim adverse to the right, title and interest of the Appellant No.2 in the basement and ground floor as well as in half share of the plot of land. If this be so, Section 115 of the Evidence Act, 1872, in our opinion, is clearly attracted, for it is trite that once a person having a belief that he is the owner of a plot RFA (OS) 2-5/2006 Page 18 of 26 constructs on a plot and the real owner stands by, then such real owner is stopped from claiming any title in the plot, inasmuch as by standing by he has given a representation that the person who has constructed on the plot had complete entitlement to construct, though formally there may not be title papers in his name with respect to the plot in question. It is equally well settled that estoppel may itself be a foundation of a right as against the person stopped and may with equal justification be described both as a rule of evidence and as a rule of creating or defeating rights. Nearly six decades ago, in the case of Depuru Veeraraghava Reddi vs. Depuru Kamalamma, AIR 1951 MAD 403, the illustrious Vishwanatha Sastri, J. observed:-
"The estoppel though a branch of the law of evidence is also capable of being viewed as a substantive rule of law insofar as it helps to create or defeat rights which would not exist and be taken away but for that doctrine."
32. Recently, the Supreme Court in the case of B.L. Sreedhar and Ors. vs. K.M. Munireddy (supra), relying upon the aforesaid observations held as follows:-
"15. Estoppel is a rule of evidence and the general rule is enacted in Section 115 of the Indian Evidence Act, 1872 (in short "the Evidence Act") which lays down that when one person has by his declaration, act or omission caused or permitted another person to believe a thing to be true and to act upon that 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. [See Sunderabai and Anr. v. Devaji Shankar Deshpande (AIR 1954 SC 82)].RFA (OS) 2-5/2006 Page 19 of 26
16. "Estoppel is when one is concluded and forbidden in law to speak against his own act or deed, yea, though it be to say the truth" -- Co. Litt., 352(a), cited in Ashpital v. Byron, 3B and S.474 (489); Simmon v. Anglo American Telegraph Co., (1879) 5 Q.B.D. 188 C.A., per Bramwell L.J. at p.202; Halsbury, Vol. 13, para 488. So there is said to be an estoppel where a party is not allowed to say that a certain statement of fact is untrue, whether in reality it be true or not. Estoppel, or conclusion, as it is frequently called by the older authorities, may therefore be defined as a disability whereby a party is precluded from alleging or proving in legal proceedings that a fact is otherwise than it has been made to appear by the matter giving rise to that disability - Halsbury, Vol. 13, para 448. The rule on the subject is thus laid down by Lord Denman, in Pickard v. Sears, 6 Ad. & E. 469 at p. 474:
"But the rule is clear, that, where one by his words or conduct wilfully causes another to believe the existence of a certain state of things, and induces him to act to that belief, so as to alter his own previous position, the former is concluded from averring against the latter a different state of things as existing at the same time."
"The whole doctrine of estoppel of this kind, which is a fictitious statement treated as true, might have been founded in reason, but I am not sure that it was. There is another kind of estoppel -- estoppel by representation -- which is founded upon reason and it is founded upon decision also." Per Jessel, M.R. in General Finance & Co. v. Liberator, L.R. 10 Ch. D. 15 (20). See also in Simon v. Anglo-American Telegraph Co., L.R. 5 Q.B.D. 202 Bramwell, L.J. said "An estoppel is said to exist where a person is compelled to admit that to be true which is not true and to act upon a theory which is contrary to the truth."
17. On the whole, an estoppel seems to be when, in consequences of some previous act or statement to RFA (OS) 2-5/2006 Page 20 of 26 which he is either party or privy, a person is precluded from showing the existence of a particular state of facts. Estoppel is based on the maxim, allegans contraria non est audiendus (a party is not to be heard to allege the contrary) and is that species of presumption juries et de jure (absolute or conclusive or irrebuttable presumption), where the fact presumed is taken to be true, not as against all the world, but against a particular party, and that only by reason of some act done, it is in truth a kind of argumentum ad hominem.
............................................
20. Estoppel though a branch of the law of evidence is also capable of being viewed a substantive rule of law insofar as it helps to create or defeat rights, which would not exist or be taken away but for that doctrine.
............................................
25. Though estoppel is described as a mere rule of evidence, it may have the effect of creating substantive rights as against the person estopped. An estoppel, which enables a party as against another party to claim a right of property which in fact he does not possess is described as estoppel by negligence or by conduct or by representation or by holding out ostensible authority.
26. Estoppel, then, may itself be the foundation of a right as against the person estopped, and indeed, if it were not so, it is difficult to see what protection the principle of estoppel can afford to the person by whom it may be invoked or what disability it can create in the person against whom it operates in cases affecting rights. Where rights are involved estoppel may with equal justification be described both as a rule of RFA (OS) 2-5/2006 Page 21 of 26 evidence and as a rule creating or defeating rights............"
33. In the case of Hari Mohan & Anr. vs. Smt. Maya Devi & Anr. (supra), while rejecting the contention of the counsel for the Appellant that the Regular Second Appeal gave rise to a substantial question of law, a learned Single Judge of this Court observed as follows:-
"In my opinion, the Appellate Court is also otherwise correct because as per Section 115 of the Evidence Act, 1872, once a person having a belief that he is the owner of a plot, constructs on a plot and the real owner stands by then such real owner is estopped from claiming any title in the plot inasmuch as by standing by he has given a representation that the person who constructs on the plot had complete entitlement to construct. Further, since the respondent No.1 has admittedly made entire construction on the plot in question, she is definitely the owner of the building which has been constructed on the plot though formally there may not be title papers in the name of the respondents with respect to the plot in question."
34. In the case of Mukhinder Singh (Deceased) through LRs and Others vs. Gurbux Singh and Others (supra) also, a similar view was taken. In the said case, the Respondent No.1 (Defendant in the suit) was held to be the owner of the property on the basis of the principle of estoppel enshrined in Section 115 of the Evidence Act, 1872. Para 18 of the said judgment, which is relevant to the present case, is reproduced hereunder:-
"18. In my opinion, the trial Court has also rightly decided issue no.8 by holding that the RFA (OS) 2-5/2006 Page 22 of 26 appellants/plaintiffs are estopped from filing the subject suit. Though, the Trial Court has not given a very detailed reasoning, in my opinion, really the reasoning of the Trial Court is based upon Section 115 of the Evidence Act, 1872. As per the provision of Section 115 of the Evidence Act, if a person has a belief that he is the owner of a plot, and such person thereafter builds on the plot having the impression that he is the owner of the plot, and the real owner stands by and allows him to construct on the plot, the real owner is then estopped in law from claiming any rights on the plot once the third person has made the construction on the plot................"
35. In the case of Lata Chauhan vs. L.S. Bisht & Ors., 2010 (117) DRJ 715, the Plaintiff claimed partition and other consequential reliefs. The defence of the contesting defendants was that one of the two properties of which partition was claimed was purchased by Defendant No.1 out of his own funds and construction was raised by him from his own resources and, therefore, he was the absolute owner of the suit property. An issue arose as to whether the Plaintiff and the supporting Defendants were estopped from claiming any right to the property or the right to dispossess the Defendants. A learned Single Judge of this Court upon considering the said issue and after noting that the Plaintiff and the supporting Defendants had nowhere disputed that construction was put up on the suit property by the Defendants, held that the inference which followed from this reality was that the Plaintiff and the supporting Defendants were conscious of the construction carried out by the contesting Defendants and their possession of the property. It had nowhere been suggested that they RFA (OS) 2-5/2006 Page 23 of 26 were misled into believing that the construction enured to their benefit or that they had even paid for the construction of such building or house. This being so, the Plaintiff was estopped and barred from claiming the relief sought in the suit.
36. As regards the plea of Benami Transaction sought to be raised by learned counsel for the Respondents, it is well settled that Section 4 of the Benami Transactions (Prohibition) Act, 1988 is not attracted in cases where property is held by the person standing in a "fiduciary" capacity for the benefit of another. It is equally well settled that existence of fiduciary relationship has to be determined in the fact situation of a particular case [See Marcel Martins vs. M. Printers & Ors., (2012) 5 SCC 342 and P.V. Sankara Kurup vs. Leelavathy Nambiar, (1994) 6 SCC 68].
37. A perusal of the written statements filed by the Appellants in the instant case, in our opinion, shows that it is the case of the Appellants that the suit property was purchased in the name of the Respondent/Plaintiff as a consequence of an understanding that the Respondent would hold the same as a trustee for the benefit of the Appellant No.2. The acquisition of the plot in question in the name of the Respondent appears to have been made pursuant to this understanding, and not that the plot shall vest exclusively in the Respondent. In other words, though the Respondent is not the trustee in the strictest sense but he was holding over the suit property for the benefit of the Appellant No.2. The construction of the suit premises was made by the Appellants only on the reliance of this implied and constructive trust based upon the promise made in the context of the RFA (OS) 2-5/2006 Page 24 of 26 family. In such kind of cases, the theory of proprietary estoppel may be invoked, which may be quoted from Chitty on Contract as under:-
"Scope of proprietary estoppel. - Proprietary estoppel operates in a variety of cases to disparate that it has been described as "an amalgam of doubtful utility".
The cases can be divided broadly into two categories.
In the first, one person acts under a mistake as to the existence or as to the extent of his rights in or over another's land. Even though the mistake was in no way induced by the landowner, he might be prevented from taking advantage of it, particularly if he "stood by"
knowing of the mistake, or actively encouraged the mistaken party to act in reliance on his mistaken belief. These cases of so-called "acquiescence" do not raise any questions as to the enforceability of promises and therefore do not call for further discussion in this chapter.
In the second situation, there is not merely "acquiescence" by the landowner, but "encouragement". The other party acts in reliance on the landowner's promise (or on conduct or a representation from which a promise can be inferred) that the promisee has a legally recognised interest in the land or that one will be created in his favour. The question then arises, to what extent such a promise can be enforced, even though it may not be supported by consideration, or fail to satisfy the other requirements (such as certainty) of a binding contract. Expenditure on another's land in reliance on a promise.....................
Cases of this kind can be explained on the basis of unjust enrichment : in all of them, the landowner would benefit unjustly if he were allowed to disregard his promise and to take back the land after having induced the promisee to make improvements to it. This explanation is, perhaps, reflected in statements found RFA (OS) 2-5/2006 Page 25 of 26 in some modern cases that the liability is based on "an implied or constructive trust". But the unjust enrichment explanation will not account for cases in which the doctrine has been applied even though the promisee's expenditure on another's land did not result in any benefit at all to the owner of that land. It follows that, although unjust enrichment of the promisor may be the most obvious basis of proprietary estoppel, it cannot provide complete explanation of the doctrine."
38. Axiomatically, whether such an implied and constructive trust, based upon the promise made in the context of the family and not with any contractual intention and not the trust as defined in Section 5 of the Indian Trust Act exists, would depend upon the evidence adduced by the parties. This being so, we are of the opinion that the matter needs to be remanded back to the learned Single Judge for the trial of the remaining issues. We, however, hasten to add that no observation made by us in this order shall be construed as an expression of opinion on the merits of the case.
39. The appeal stands allowed to the aforesaid extent.
REVA KHETRAPAL JUDGE PRATIBHA RANI JUDGE September 19, 2013 km RFA (OS) 2-5/2006 Page 26 of 26