Calcutta High Court (Appellete Side)
Smt. Lakshmi Rani Dhar & Ors vs Falakata Industries Ltd on 17 August, 2022
Author: Soumen Sen
Bench: Soumen Sen
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
BEFORE:
The Hon'ble Justice Soumen Sen
And
The Hon'ble Justice Siddhartha Roy Chowdhury
F.A.T. No.1074 of 2007
Smt. Lakshmi Rani Dhar & Ors.
Vs.
Falakata Industries Ltd.
For the Appellants : Mr. Probal Kumar Mukherjee, Sr. Adv.,
Mr. Ayan Banerjee, Adv.,
Mr. Debdut Mukherjee, Ad.,
Mr. Uttam Kumar Bhattacharyya, Adv.
For the Respondent : Mr. Surojit Nath Mitra, Sr. Adv.,
Mr. Sagar Bandyopadhyay, Adv.,
Ms. Soma Kar Ghosh, Adv.,
Mr. Niladri Banerjee, Adv.,
Mr. Ashutosh Singh, Adv.
Hearing Concluded On : August 3, 2022
Judgment On : August 17, 2022
Soumen Sen, J.: The appeal is arising out of a judgment and decree
dated 19th October, 2006 passed by the learned Civil Judge (Sr. Div.),
Jalpaiguri in a suit for specific performance filed by Falakata Industries Pvt.
Ltd., (in short, "Falakata").
Briefly stated, the plaintiff filed a suit for specific performance of a
contract on the basis of Terms of a compromise forming a schedule to a
compromise petition alleged to have been entered into in a previously
2
instituted suit filed by Lakshmi Narayan Dhar, since deceased, against
Falakata being O.C. Suit no.90 of 1997.
Falakata alleged that Lakshmi Narayan Dhar, (in short "Lakshmi
Narayan") filed a suit being O.C Suit No.90 of 1997 in the month of May,
1997 before the learned Civil Judge (Jr. Div.), Jalpaiguri against Ajit Kumar
Agarwal &Ors. inter alia, praying for a decree for recovery of Khas
possession against the defendants by demolishing their illegal structures
from the suit land with other consequential reliefs. The plaintiff was the
defendant no.3 in the said suit.
In the suit Falakata has alleged that on 28th May, 1997, on the basis of
the terms of compromise as mentioned above, Falakata had paid to Lakshmi
Narayan a sum of Rs.3,60,000/-towards consideration.
The plaintiff alleged that the joint compromise petition containing the
said agreement was duly executed by and between the parties. The plaintiff
alleged that the defendant no.1 after receiving the said consideration
assured to execute a registered power of attorney in favour of the advocate
on record of the plaintiff, as due to his prolonged illness, he was unable to
move out of station. However, the said transaction could not be completed
within the agreed time and the time to complete the said transaction was
mutually extended from time to time and finally on or about 25th August,
2004 Lakshmi Narayan informed the plaintiff that he was unable to execute
the deed of conveyance in respect of the suit property unless the plaintiff
paid a further sum of Rs.3 lacs. The plaintiff having performed his part of
the obligation, and still being ready and willing to perform the essential
3
terms of the said agreement and having regard to the fact that the defendant
had denied execution of the sale agreement despite having received the
consideration amount, the suit for specific performance was filed.
Lakshmi Narayan died during the pendency of the suit.
The present appellants are the widow and younger son of Lakshmi
Narayan.
Lakshmi Narayan the original defendant, however, filed his written
statement in which he specifically denied the filing of any suit or any alleged
compromise petition or an agreement for sale of the suit property forming
part of the compromise petition. It is alleged that the compromise petition
containing the terms of settlement is a fabricated document. Lakshmi
Narayan further alleged that the compromise petition could not have been
signed at Dinhata by him as he never used to reside at Dinhata nor had he
engaged Mr. Tapan Sarkar on his behalf to file the suit or prepare any
compromise petition or any terms of settlement in the non-existent suit. It is
alleged that Mr. Ajit Kumar Agarwal (hereinafter referred to as "Ajit") and the
plaintiff tried to dispossess the defendant from the suit property for which
an application under Section 144 of the Code of Criminal Procedure was
filed before the executive Magistrate, Jalpaiguri on 7th July, 2000 being case
no 279 of 2000. In the written statement the defendant had alleged that the
suit and compromise petition containing terms of settlement are all forged
and fabricated documents. In any event it was alleged that the suit is barred
by limitation.
4
The learned Trial Judge on the basis of pleadings and documents
framed 14 issues. The learned Trial Judge accepted the contention of the
plaintiff that an agreement had been entered into by and between the
parties in a suit instituted by the original defendant and accordingly decreed
the suit in favour of the plaintiff.
Mr. Probal Kumar Mukherjee, learned Senior Counsel appearing on
behalf of the appellants has submitted that the judgment suffers from
various infirmities.
It is submitted that the plaintiff has failed to prove that there is any
privity of contract between the plaintiff and the original defendant. The suit
is also ex facie barred by limitation. The existence of the alleged agreement
for sale is not proved. Even if it is assumed that there is an agreement
between the plaintiff and the original defendant the plaintiff has failed to
prove that any consideration amount was paid to the original defendant in
terms of such alleged agreement.
Mr. Mukherjee has relied upon paragraphs 4, 8 and 9 of the plaint and
submits that the plaintiff alleged that after payment of the consideration
amount of Rs.3.60 lacs in terms of the agreement dated 28th May, 1997 the
original defendant was requested to execute the deed of conveyance and
thereafter at the request of Lakshmi Narayan time to complete the
transaction in terms of the said agreement was mutually extended as the
original defendant due to his alleged prolonged illness was unable to move
out of station to execute a registered power of attorney in favour of his
advocate on record in terms of the said agreement and on the basis of such
5
presumed request made by the original defendant on 25th April, 2000
further extension was granted to the defendant up to 31st December, 2000.
Mr. Mukherjee submits that suit was filed on 16th September, 2004
beyond the period of 3years from 31st December, 2000 and is barred under
Article 54 of the Limitation Act, 1963. It is submitted that even if it is
assumed that such extension was granted till 31st December, 2000, there is
no evidence on record to show that the time was extended beyond 31st
December, 2000.
In this regard, Mr. Mukherjee has relied upon the decision of the
Hon'ble Supreme Court in Ahmadsahab Abdul Mulla (2) (Dead) v. Bibijan
& Ors., reported in 2009 (5) SCC 462 paragraphs 11 and 12 which reads:
"11. The inevitable conclusion is that the expression `date fixed for the
performance' is a crystallized notion. This is clear from the fact that the second
part "time from which period begins to run" refers to a case where no such date
is fixed. To put it differently, when date is fixed it means that there is a definite
date fixed for doing a particular act. Even in the second part the stress is on
`when the plaintiff has notice that performance is refused'. Here again, there is
a definite point of time, when the plaintiff notices the refusal. In that sense both
the parts refer to definite dates. So, there is no question of finding out an
intention from other circumstances.
12.Whether the date was fixed or not the plaintiff had notice that performance
is refused and the date thereof are to be established with reference to materials
and evidence to be brought on record. The expression `date' used in Article 54 of
the Schedule to the Act definitely is suggestive of a specified date in the
calendar. We answer the reference accordingly. The matter shall now be placed
before the Division Bench for deciding the issue on merits."
(emphasis supplied)
6
Moreover, even if it is assumed that the parties had entered into an
agreement on 28th May, 1997, evidence on record would show that the
original defendant never accepted the plaintiff as the owner of the said
property and had denied any right of the plaintiff over and in respect of the
said property.
Mr. Mukherjee submits that the alleged compromise petition was
signed by one Mr. Rungta of Terai Tea Co. Ltd. being the defendant no. 3 in
OC suit no.90 of 1997 on 28th May, 1997.The said compromise petition was
not signed by Falakata. A suit for specific performance can be filed by a
person or a party, who has a privity of contract with the defendant. In the
absence of any evidence to show that Mr. Rungta was authorized to sign the
compromise petition said to contain an agreement for sale on behalf of
Falakata and that the consideration amount had been paid to Lakshmi by
Falakata the court could not have decreed the suit in favour of Falakata.
Mr. Mukherjee has taken us through the deposition of the witnesses of
the plaintiff and submits that none of the witnesses were able to prove the
execution of the compromise petition said to contain an alleged agreement
for sale or payment of consideration amount. In absence of any evidence to
establish due execution of the agreement or payment of consideration
amount under the said alleged agreement the learned Trial Court could not
have passed the decree in favour of the plaintiff.
Mr. Mukherjee submits that the existence of the so-called agreement
alleged to have been executed by and between Lakshmi and Terai Tea Co.
Ltd. in the previously instituted suit is the most vital document. Curiously
7
the said document was not annexed to the plaint. Mr. Mukherjee relied
upon the judgment of the Hon'ble Supreme Court in Church of Christ
Charitable Trust & Educational Charitable Society v. Ponniamman
Educational Trust, reported in 2012 (8) SCC 706to submit that the said
document having not been produced along with plaint, the suit is liable to
be dismissed for non-disclosure of cause of action. Moreover, it has not
been alleged by Falakata that they are the assignee of Terai and in absence
of any such pleading or document to show that Falakata is the assignee of
Terai in relation to the property forming the subject matter of the suit, the
suit is not maintainable at the instance of Falakata in view of Section 15(b)
of the Specific Relief Act, 1963.
Mr. Mukherjee submits that apart from the fact that the execution of
the said document is shrouded with mystery, Falakata has failed to prove
that the said consideration money was paid by Falakata to the defendant.
Mr. Mukherjee by referring to the deposition of PW 1 and PW 6 submits that
the plaintiff tried to prove payment of consideration money on the basis of a
certificate alleged to have been issued by its auditor. However, the witness
of the plaintiff, PW4 had admitted during his evidence that cash
transactions were not maintained regularly at the relevant point of time.
Although he stated in his evidence that a cash book is maintained by
Falakata which would show that payment was made to the original
defendant, but he admits that there is no document to show the receipt of
the said amount paid by the plaintiff. It is submitted that burden is on the
plaintiff to prove that the payment was made and received by the original
8
defendant. The entry in the records of Falakata would not be conclusive of
payment when existence of the said agreement and receipt of the said
amount are in dispute and were categorically denied by the original
defendant.
Mr. Mukherjee submits that there are certain unusual features in this
case. The plaint was presented on 21st May, 1997 and the alleged
compromise agreement and agreement for sale was entered into on 28th
May, 1997. The alleged compromise petition was alleged to have been
signed by Lakshmi Narayan on 28th May, 1997 at Dinhata. Mr. Rungta and
others put their signatures on 30th May, 1997. Rungta alleged to have
signed as Chief Executive Officer (CEO) and an authorized signatory of
Falakata Industry, the defendant no.3 company. The advocates for the
parties alleged to have signed on May, 30, 1997.
It is submitted that P.W.2,Court employee, comparing clerk, Copying
Department posted under District Judge, Jalpaiguri, deposed that the date
of application for the certified copy of the plaint was made on 22nd May,
1997 with urgent fees. It was delivered on 22nd May, 1997 itself. The suit
was filed for recovery of Khas possession of suit property. The suit was
dismissed for non-prosecution on 30th June, 1997. Mr. Mukherjee submits
that PW 6 could not say whether on the date of alleged execution of
agreement forming part of the compromise petition Mr. Lakshmi Narayan
Dhar was at Dinhata or not. There is no evidence to show that he is a
resident of Dinhata. The said witness also could not say whether Rungta
went alone to Dinhata or not and whether Lakshmi signed the document on
9
May, 28, 1997. Mr. Mukherjee submits that the evidence of Mr. Narayan,
PW6 would show that he was aware of the proceeding under Section 144 of
the Cr.P.C. initiated against Mr. Ajit, proprietor of Falakata Flour Mill. Mr.
Mukherjee, submits that the said evidence is crucial as Falakata by that
time had adequate notice that the original defendant did not accept Falakata
to be the owner of the property and the plaintiffs did not file any document
before the Judicial Magistrate to show that there was any agreement for sale
or by reason of such agreement, possession was delivered to Falakata. The
initiation of a proceeding under Section 144 in any event would show that
the relationship between the parties was bitter. The evidence of Narayan
would also show that within 2 to 3 days after filing of suit a draft settlement
in the form of compromise petition was prepared by Tapan Sarkar junior to
Mr. Bappaditya Hoare, Advocate and Mr. Narayan collected the same from
the law clerk of Mr. Hoare. The said draft agreement is crucial and vital but
was not produced at the trial. The said draft was alleged to have been
handed over to Mr. Gautam Das, Advocate representing Falakata, for his
opinion and after the said draft was alleged to have been settled by Gautam
Das in a joint meeting held at the chamber of Bappaditya Hoare and Tapan
Sarkar. On the request of Mr. Rungta, Mr. Tapan Sarkar put his signature.
Mr. Hoare is also alleged to have put his signature.
Mr. Mukherjee submits that the Learned Trial Court in utter disregard
to the evidence and unusual features of the matter decreed the suit solely on
the ground that the version of the Falakata is more acceptable than
Lakshmi Narayans' in relation to the execution of the agreement.
10
Per contra, Mr. Surajit Nath Mitra, learned Senior Counsel appearing
on behalf of the plaintiff/decree holder submits that the basis and/or
foundation of the defence of the appellants is non-existence of agreement for
sale. The said claim is false and untrue as the record would show that the
plaintiff had engaged Mr. Tapan Sarkar, Advocate to represent him in
various proceedings. Our attention is drawn to the petition filed under
Section 144 of the Cr.P.C to demonstrate that Tapan Sarkar was appointed
as the advocate to represent the original defendant on 7th July, 2000. Mr.
Mitra has relied upon pages 11 and 15 of Exbt.4 in support of his
submission. It is submitted that the evidence on record would show that
Falakata belongs to the Terai Group of Companies and Terai has not denied
the payment of any money to Falakatain enabling Falakata to discharge its
obligation under the said agreement. Although Mr. Rungta the signatory of
the said petition was an employee of Terai and he had died in the year 2002
before the suit was filed, the evidence of PW1 and PW6 would show that
Rungta was inextricably connected with Falakata as he frequently used to
visit the office of the plaintiff in order to guide and look after the legal affairs
of the plaintiff.
Mr. Mitra submits that the evidence of PW6 would prove the existence
of the said agreement as the said witness has clearly stated in great detail
the background, mode and manner of the agreement forming part of the
compromise petition. It is submitted that the evidence of DW2, the son of
the original defendant would also prove that Tapan Sarkar was frequently
consulted by his father even in 2003. It is submitted that the record of O.C.
11
Suit No. 90 of 1997 was maintained till 31st January, 2002 (Exbt.7) and the
certified copy of the register of the title suit would show that the suit was
filed by Mr. Tapan Sarkar on behalf of the defendant (Exbt.8). The evidence
of DW2, the son of the original defendant would show that Tapan Sarkar
used to be engaged and consulted by the original defendant. At least the
application under Section 144 of the Cr.P.C in the year 2000 establishes
that the original defendant used to engage Tapan Sarkar for legal matters.
In the year 2003 he was consulted in relation to some family matters as
deposed by DW2. Once it is established that the defendant is not truthful
with regard to the involvement of Tapan Sarkar, the court may disbelieve the
defence with regard to the non-execution of the agreement and the payment
of consideration amount.
It is submitted that the plaintiff has purposely selected 2003 as his
date of knowledge of the earlier suit being OC Suit no.90 of 1997 after
destruction of the original record but he could not explain the occasion for
him to consult Mr. Sarkar regarding the subject matter of the previously
instituted suit. Mr. Mitra has referred to the deposition of the Court
employee Mr. Prasenjit Kumar Saha, the Bench Clerk Mr. Dipak Karmakar
and Typist-cum-Copist attached to the Copying Department, District Judge,
Jalpaiguri, Shri Siddharta Sankar Sen in order to demonstrate that the suit,
was in fact, filed by the original defendant against Ajit and others. It is
submitted that the documents regularly maintained by the Court carry a
much higher evidentiary and probative value than any other document. It is
submitted that all the aforesaid witnesses in their evidence have stated that
12
there is an existence of the suit in the suit register of the Title suits being
O.C Suit no.90 of 1997 and the certified copies of the documents being
Exbt.3 and Exbt.3/1 are the copies that are available on the record of the
Court. The existence of the said documents coupled with the fact that
Tapan Sarkar used to frequently represent the original defendant and no
evidence being adduced to show that any complaint was made against
Tapan Sarkar or such complaint being filed was pursued by the original
defendant or by the substituted defendants, it should be presumed that the
agreement was entered into between the plaintiff and the defendant no.3 in
the previously instituted suit. Mr. Mitra submits that the principal witness
on behalf of the original defendant to deny filing of the suit, the compromise
petition containing the terms of settlement and failure of consideration was
Tapan Sarkar. The original defendant on the basis of the evidence available
on record could not have denied that Mr. Tapan Sarkar was his advocate in
various proceedings. Tapan would have been the principal witness for the
original defendant to prove that the suit was not filed by Lakhsmi Narayan
or that any compromise petition existed. Tapan was the best person to deny
the agreement. The original defendant having failed to call Mr. Tapan
Sarkar, as his witness, the principal person involved in the transaction, who
was in a position to give a first-hand account of the matters in controversy
and throw light on them and who could have refuted all the allegations of
the plaintiff concerning the previous suit, it is legitimate to draw adverse
inference against the defendants having failed to produce such a principal
witness. Mr. Mitra submits that Section 114(g) of the Indian Evidence Act
has empowered the Court to draw an adverse inference in the event the
13
Court comes to a finding that a party has withheld important documents in
his possession which can throw light on the facts and issue even if the
burden of proof does not lie on the party. Mr. Mitra made the aforesaid
submission based on the observation made in paragraph 17 of Bajranglal
Poddar v Sitaram Kedia reported at AIR 1949 Cal 457, paragraph 5 of
Gopal, Krishnaji Ketkar v Mahomed Haji Latif & Others reported at AIR
1968 SC 1413 and Nand Kishore v State of Madhya Pradesh reported in
(2011) 12 SCC 120.
Mr Mitra submits that the payment of consideration to Lakshmi
Narayan has been adequately proved by the certificate issued by the
chartered accountant of Falakata (Exbt. 6) and an extract showing the list of
details of advances and security deposits of Falakata Industries Limited
dated 31st March 1998 (Exbt. 6/1) forming part of the certificate issued by
Messrs. P.K. Shah and Co., chartered accountants. Mr. Mitra has also relied
upon the evidence of Mr. Rajendra Kanodia, PW 4 who according to Mr.
Mitra has proved the said transaction by producing the annual reports of
Falakata Industries Ltd. (Exhibit 5) and the auditors' certificate along with
annexures that were marked as Exhibit 6 series. Mr. Mitra submits that
accounts maintained in the course of business are to be taken as correct
unless there are strong and sufficient reasons to indicate that they are
unreliable as per Justice Kapadia in Commissioner of Income Tax, Delhi v
Woodward Governor India Private Limited reported at(2009) 13 SCC 1,
referred to and relied upon in paragraph 28 and Gian Chand and Brothers
v Ratan Lal reported at2013 (2) SCC 606.
14
On the question of limitation, Mr. Mitra has submitted that when no
date is fixed for the performance of the contract, the suit is to be governed
by the second alternative clause of Article 54 of the Limitation Act when the
plaintiff gets 'notice' of the refusal of performance. In this regard, Mr. Mitra
has relied upon a decision of the Jammu and Kashmir High Court in
Kharku&Ors. v. Rasil Singh &Ors. reported in AIR 1954 J&K 33
(paragraph 4 and 5) and the Hon'ble Supreme Court in Rathnavathi v.
Kavita Ganasham Das report at 2015 (5) SCC 223 (paragraphs39 to 45).
In a suit for specific performance the burden of proof is on the plaintiff
to prove the agreement based on which the prayer for specific performance
is made. When the agreement is reduced to writing, the task of the plaintiff
becomes easy as the suit would be based on a written agreement. However,
when the existence of the written agreement is in dispute the plaintiff has
first to prove that there was an agreement between the parties and in spite
of the plaintiff having performed and being ready and willing to perform its
obligation, the defendant has refused, failed or neglected to discharge or
perform its obligation. The burden of proof is on the plaintiff first to prove
the existence of the agreement. The doubt surrounding the existence and
execution of the agreement and suspicious circumstances surrounding its
execution will not be removed if the plaintiff is unable to offer evidence of
circumstances leading to a probable conclusion of the existence of an
agreement.
If the first hurdle is crossed the second would be the question of
limitation. The defendant, in the instant case, has raised a plea of limitation
15
which according to us has not been satisfactorily addressed by the learned
Trial Judge.
If the aforesaid two issues are decided in favour of the plaintiff on the
preponderance of probabilities, as a civil suit is required to be decided on
such basis, the plaintiff may consider the prayer for specific performance to
be decided in its favour. We used the word 'may' as the relief is discretionary
and all factors including the belated filing of the suit on the verge of
limitation and rise in the price of the property would be the other relevant
considerations in exercising discretion in favour of the plaintiff. [See: U.N.
Krishnamurthy (since deceased) through LRS v. A.M. Krishnamurthy
reported in 2022 SCC OnLine SC 840.]
The oral and documentary evidence give us an impression that Tapan
Sarkar may not have been engaged at all by Lakshmi Narayan for filing the
suit as the relationship between Lakshmi and Ajitat the relevant time was
acrimonious. However, whether Lakshmi had agreed to sign any
compromise petition said to contain a terms of settlement as pleaded in the
suit is not at all free from doubts.
An interesting feature is the address of Lakshmi Narayan in the cause
title of the so-called suit. In the cause title of the previous suit the place of
residence of Lakshmi Narayan was mentioned as "Dhupguri, District
Jalpaiguri and at present residing at Balarampur Road, P.O and P.S
Dinhata, District Cooch Behar (West Bengal)". Interestingly all other
documents previous to the institution of the alleged suit and subsequent
thereto there is no mention of any Dinhata address of Lakshmi Narayan.
16
The plaintiff could not prove that at the relevant point of time the defendant
was residing at Dinhata. Mr. Narayan Prasad Sharma, (hereinafter referred
to as "Sharma") PW 6 in his affidavit in chief has stated that during a joint
meeting held between the learned advocates of both parties in the presence
of Mr. Rungta, Mr. Tapan Sarkar advocate on record of Lakshmi represented
that Lakshmi Narayan due to acute illness was confined to bed and Mr.
Rungta was requested to make a programme to go to Dinhata for the
purpose of execution of the compromise petition and according to the said
programme Mr. Rungta and Mr. Tapan Sarkar went to Dinhata. Lakshmi
Narayan had executed the compromise petition in the presence of Mr.
Rungta and Mr. Sarkar. This occurred within 2 to 3 days of filing of the suit
at the time of settlement of the draft petition for compromise as claimed by
Sharma in his chief. There is no evidence that Lakshmi was unwell at the
relevant point of time besides his apparent stay at Dinhata at the relevant
point of time. Mr. Sharma did not accompany Mr. Rungta of Mr. Sarkar to
Dinhata for the purpose of execution of the agreement. His evidence to the
extent of illness of Lakshmi Narayan and Lakshmi Narayan staying at
Dinhata at the relevant time is hearsay evidence. He has no direct
knowledge of the illness of Laskhmi Narayan or his residential status at
Dinhata at the relevant point of time.
Furthermore, there is no evidence on record to show that Falakata had
authorised Mr. Rungta to sign the alleged compromise petition on behalf of
Falakata. The board resolution of Falakata was not produced. The power of
17
attorney in favour of Rungta was also not produced. This is relevant as Mr.
Rungta had died in the year 2002 prior to the filing of the suit by Falakata.
The execution of the Terms of Compromise is also not proved and
shrouded with suspicious circumstances as Narayan (PW 6) had fairly
stated in his deposition that he was not present at the time of execution of
the draft agreement. Mr. Goutam Das would have been the principal witness
for the plaintiff to prove the existence of the suit, compromise petition and
Terms of Compromise. Mr. Das is the principal person in the matter to prove
the agreement as he was in a position to give information and explain the
matters in controversy and throw light on them. He was the person involved
at the time of preparation and finalisation of the draft agreement. According
to Sharma, PW 6, he settled the draft agreement which forms part of the
compromise petition. An agreement is not proved merely by marking it as an
exhibit. The plaint in the previously instituted suit and the compromise
petition were marked as 3 and 3/1 respectively, with objection. Mr. Das
would have been the right person for the plaintiff to prove the existence and
contents of the terms of settlement and to affirm the transaction mentioned
therein and it is only thereafter the onus would have shifted to the original
defendant to prove otherwise. The contents of the compromise petition or
the terms of compromise were never proved.
Dinhata episode suggests two issues viz., (i) Laxmi Narayan used to
stay there (ii) Tapan Sarkar accompanied Mr. Rungta to Dinhata for making
payment and getting the petition signed.
18
Unless it is proved that Lakshmi had his abode at Dinhata, motor ride
of Tapan Sarkar together with Mr. Rungta, to that house of Lakshmi
Narayan for whatever purpose, assumes no relevance.
Since plaintiff has failed to prove the first point, the second narrative
that Tapan Sarkar, Advocate of Lakshmi Narayan together with Mr. Rungta
went to Dinhata and the petition was signed by Lakshmi Narayan upon
receipt of Rs. 3,60,000/- appears to be concocted and absurd. Therefore, no
adverse presumption can be drawn against the defendants/appellants for
non-examination of Sri Tapan Sarkar under Section 114 (g) of the Evidence
Act, as suggested by Mr. Mitra, learned Senior Counsel.
Even, if we accept that a suit has been filed by the original defendant
against Falakata and others, the agreement alleged to have been entered
into between the original defendant and Falakata on the basis of which a
compromise petition was drafted and intended to be filed in the pending suit
of O.C. Suit No.90 of 1997 is required to be proved by the plaintiff. The
evidence of Narayan would show that there was a discussion at the chamber
of one Mr. Hoare, Advocate senior of Tapan Sarkar where a draft agreement
alleged to have been prepared. One Mr. Goutam Das an advocate was also
involved on behalf of Falakata at the time of preparation of the draft
agreement. Mr. Das was alleged to have settled the draft agreement. The
draft agreement was never produced nor was Goutam Das called as a
witness by the plaintiff to prove the existence of the suit and the
compromise petition.
19
It is interesting to note that the learned trial Judge failed to take into
consideration that Goutam Das, advocate who was engaged by the plaintiff
and according to the deposition of PW.6 Goutam had settled the draft
agreement, was never called as a witness by the plaintiff. Goutam is the only
person who could have a direct knowledge of the alleged discussion
culminating in the draft agreement and thereafter a final agreement which is
claimed to have been signed by three advocates and Rungta on behalf of
Falakata on 30th May, 1997 and Lakshmi at Dinhata on 28th May, 1997.
Lakshmi in his written statement has stated that the suit property is
surrounded by properties belonging to Falakata and one Terai Tea Co. Ltd.
Ajit and Rajendra Kanodia are the directors in both the plaintiff's company
and Terai Tea Co. Ltd. Ajit along with Rajendra tried to take possession of
the property of Lakshmi. On 20th August, 1986. Lakshmi entered into an
agreement for sale of suit property with one Mahendra at a consideration of
Rs.9 lacs. However, Mahendra did not complete the transaction, for which
Lakshmi cancelled the said agreement dated 20th August, 1987. In May
1987 Rajendra filed a suit against Mahendra and Anr. in which on the basis
of the application filed by Rajendra on 20th May, 1987 a receiver was
appointed in respect of the suit property. Lakshmi alleged a collusion
between Mahendra and the directors of Falakata and Terai Tea Co. Ltd. and
also that on 13th December, 1988 Lakshmi found said Rajendra and
Mahendra were colluding and conspiring with Ajit and had procured huge
quantity of building material for the purpose of raising construction thereby
preventing Lakshmi from enjoying his own property. In the written
20
statement Lakshmi had disclosed copies of plaint and had referred to an
application filed by him in the said suit for appropriate reliefs. The aforesaid
facts would show that the relationship between Lakshmi and Ajit and/or
Falakata and/or Terai Tea Co. Ltd. was not cordial. The recital in the
alleged terms of settlement forming terms of the compromise petition
adequately ventilates Lakshmi's stand in relation to the conduct of Ajit and
Falakata. It was in the said background that it is highly unlikely that
Lakshmi would enter into a compromise with Ajit within 2-3 days of filing of
the suit. The suit was dismissed on the ground for non-prosecution which is
extremely surprising as for the purpose of finality of the proceeding, a decree
on the terms of settlement would have been logical and probable.
The oral and documentary evidence on record would show that at the
time of institution of the present suit by Falakata, the original suit record of
the previously instituted suit was destroyed on 31st January 2002.
According to the information available, the previous suit was alleged to have
been instituted on 22nd May 1997 by Lakshmi Narayan through his advocate
Mr. Tapan Sarkar. Curiously, without service of any summons, on the self-
same date i.e., 22nd May 1997, one or some of the plaintiffs obtained a
certified copy of the plaint upon making an application with urgent fees. The
copy of the application for the certified copy has not been exhibited. We
could not find from the evidence which of the plaintiff/s has/have applied
for the certified copy of the plaint with urgent fees. What could be the
urgency was not explained. None of the witnesses of the present
respondent/plaintiff could explain the knowledge of the plaintiff with regard
21
to the filing of the previous suit. They have also not deposed that the
plaintiffs had entered appearance in the suit. The procedure under Order 5
Rule 9 for service of summons or other procedure prescribed under the said
provision was not followed.
In fact, the judgements relied upon by Mr. Mitra for drawing an adverse
inference supports the case of the appellant/defendants more than that of
the plaintiff/respondents having regard to the matter in controversy and
discharging the burden of proof.
There is a categorical denial by Lakshmi Narayan about his stay at
Dinhata at any point of time and particularly on the date when he was
alleged to have signed the said petition i.e., 28th May 1997. There is no
evidence on record to show that Lakshmi was a resident of Dinhata at any
point of time. The ailment of Lakshmi shown as a ground for Rungta to
travel at least 4 to 5 hours by vehicle to Dinhata for getting the agreement
signed by Lakshmi within 6 days from the date of filing of the suit is quite
unusual. Sharma had not seen Lakshmi executing the alleged compromise
petition at Dinhata. He did not accompany Rungta. That Lakshmi signed the
agreement at Dinhata is also not proved. Sharma had no personal
knowledge about the residential address of Lakshmi Narayan. During Cross-
examination he volunteered to say: "Tapan Sarkar did not say (to) me that
Lakhsmi Narayan Dhar was at Dinhata". Sharma admittedly did not
accompany Rungta.
The compromise petition contains terms of compromise. The
paragraphs 2 and 3 of the compromise petition are interesting, which reads:
22
"2. The common friends and well wishers of both parties have intervened into
the matter to settle the dispute and on their intervention and after discussion to their
respective lawyers the parties to this suit have agreed between themselves to have
the suit settle on the terms and conditions mutually agreed upon by and between the
parties as set out in the schedule hereunder.
3. The terms and conditions mutually agreed by and between the parties
hereto are in no way void or voidable under the Indian Contract Act, 1872 and those
are lawful agreement and liable to be accepted by this learned Count on satisfaction
and in the circumstances there is no necessity of the case being proceeded with
further."
The "common friends" or "well-wishers" of either of the parties at
whose instance the parties presumably agreed to settle their dispute on the
terms mentioned in the compromise were not examined. The plaintiff could
not produce any witness who was a "common friend" or "well-wisher" of both
parties. The recitals have been carefully worded with a view to perfect the
title of Falakata in respect of the suit property. This would be clear from the
following recitals of the terms of compromise.
"The plaintiff admits the exclusive possession of the defendant no.3 in respect
of the suit property and also the plaintiff admits that he was actually dispossessed
by the defendant no.3 in the year 1986 and the possession of the defendant no.3 at
all materials times and still the hostile possession expressly in denial of the title of
the plaintiff and the possession of the defendant no.3 is an actual and exclusive
possession under a claim of right, adequate continuity, in publicity and in extent so
as to adverse to the plaintiff and the possession of the defendant no.3 in denial of the
suppose title of the plaintiff and also is peaceable, open and continuous and in the
circumstances, the defendant no.3 and its officers and successors have acquired the
absolute right, title, interest and lawful possession by prescription of law vis-a-vis by
virtue of adverse possession." (emphasis supplied)
The joint compromise petition was placed as an evidence of payment of
consideration. No one has proved the contents of the aforesaid statement or
23
any of the statements in the compromise petition. Even if one stretched his
imagination to believe that Lakshmi Narayan had filed the suit, which we
are convinced had never happened, the existence of such agreement has not
been proved at all.
The distinction between the admissibility of a document as evidence of
a transaction and the admissibility of a document in proof of a statement
contained therein, though refined, but of a fundamental character is yet
frequently overlooked as observed by our Division Bench in Lakshan
Chandra Mondal v. Takim Dhali & Ors. reported in 28 CWN 1033.
Curiously, Falakata offered 3.60 lacs as the consideration money for
purchasing the land in question from the original defendant. The plaintiff
was unable to produce any acknowledgment or receipt of payment of any
such amount by Lakshmi, the original defendant. Although it is stated in
the agreement that a sum of Rs.3.60 lacs has been paid by defendant no.3
Falakata to the original defendant simultaneously with the execution of the
said agreement and Lakshmi alleged to have admitted and acknowledged the
said payment, no evidence of any payment of consideration save and except
a certificate from a chartered accountant has been disclosed in the evidence
to prove such payment. Mr. Sharma (PW 6) in his evidence has stated that
he has heard that a sum of Rs.3.60 lacs was paid to Lakshmi in cash at
Dinhata by Mr. Rungta in presence of Mr. Tapan Sarkar. The payment of
cash transaction was attempted to be proved by PW4, Rajendra Kanodia. He
was one of the directors of Terai Tea Co. Ltd. He stated that Falakata is one
of the group companies of Terai and he produced an extract of the cash
24
book of Falakata Industries Ltd., and details of advance and security
deposits of Falakata Industry Ltd. as on 31st March, 1998 supported by a
certificate from one P.K. Shah and Company, chartered accountant
certifying that the said list has been verified from the books of accounts of
the company for the year 1997-98. The chartered accountant was never
produced as a witness by the plaintiff. On what basis such certificate was
issued referring to payment of 3.60 lacs to Lakshmi Narayan by Falakata
has remained unclear. According to Mr. Kanodia, the plaintiff company
maintained electronic cash book prior to 1997 and M/s. P.K. Shah & Co.
was the auditor of the plaintiffs company for the year 1997-98.
During his cross-examination he has stated that on 28th May, 1997 he
was a director of Falakata and he could produce the cash book of Falakata
for the year 1997-98. This cash book was never produced. He admitted that
cash book of Falakata does not contain any signature of Lakshmi. He also
admitted that he does not have "any scrap of paper" acknowledging the
receipt of any money by Lakshmi from Terai or Falakata.
We wonder how a chartered accountant could certify that Falakata had
paid a sum of Rs.3.60 lacs to Lakshmi in terms of the sale agreement
without having a scrap of paper or document available on record to prove it.
The primary books of accounts of Terai and Falakata were not produced.
The date of such transfer according to the chartered accountant was 28th
May, 1997. The said certificate mentions the following:
"This is to certify that the total amount of Advances and Security Deposits
as reflected in the audited Balance Sheet of Falakata Industries Limited as
25
on 31st March, 1998 is Rs.23,28,071.39. which includes as advanced of
Rs.3,60,000/- given to Laxmi Narayan Dhar on A/c of land.
The said amount of Rs.360000/- was received in cash from Terai Tea Co.
Limited and given to Laxmi Narayan Dhar in cash on 28.05.1997, which
has been verified from the cash book of the company for the year 1997-98.
The information given above is true and correct."(emphasis supplied)
Mr. Mitra has submitted that the payment of consideration is
adequately proved by the certificate issued by the chartered accountant on
examination of the accounts. He has relied upon the decision of the Hon'ble
Supreme Court in this regard namely Commissioner of Income Tax (supra)
and Gian Chand (supra).
Section 34 of the Indian Evidence Act 1872 refers to entries in the
books of accounts. The said Section reads:
"Sec.34 Entries in books of account, including those maintained in an
electronic from, regularly kept in the course of business, are relevant whenever
they refer to a matter into which the Court has to inquire, but such statements
shall not alone be sufficient evidence to charge any person with liability."
The said Section is based upon the principle that entries made
regularly in the course of business can be presumed to be accurate. In all
such entries the writer has full knowledge, there is no motive to falsehood,
and there is the strongest improbability of untruth. The said Section
suggests the circumstances when entries in the books of accounts are
relevant. The entries in the books of the accounts regularly kept in the
course of business are relevant in a court of law but these entries are not by
themselves sufficient to charge any person with liability. (See State of
Andhra Pradesh v Cheemalapati Ganeswara Rao reported in AIR 1963
26
SC 1850) The book of accounts should be full proof and above suspicion.
The court is required to examine the whole state of accounts at the material
time to come to a definite conclusion that there is no improbability of
untruth in the transaction. It is interesting to note that according to the
certificate, on 28th May 1997 Terai transferred 3.60 lacs in favour of
Falakata and the said amount was given in cash to Lakshmi on 28th May
1997 itself presumably at Dinhata which was claimed to have been verified
from the cash book of Falakata in the year 1997-98, though no such book of
accounts was ever produced at the trial. Terai has not produced any books
of accounts to show transfer of fund to Falakata and neither has Falakata
produced its primary books of accounts. Falakata has also not produced the
chartered accountant alleged to have certified the payment to Lakshmi
Narayan. The transaction is not proved by the evidence of Rajendra Prasad
who has no direct knowledge of the said transaction and who had not seen
the said transaction at all. His evidence is completely hearsay in relation to
the said transaction or with regard to the entries made in the books of
Falakata. He has clearly acknowledged that there was no acknowledgement
in writing by Lakshmi Narayan of the amount received by him under the
compromise petition. It is unbelievable that Mr. Rungta who claimed to have
travelled for 4 to 5 hours by vehicle to Dinhata to get the signature of
Lakshmi Narayan at Dinhata did not feel it necessary to have any document
signed by Lakshmi Narayan at Dinhata acknowledging receipt of the said
payment under the terms of the compromise. What vouchers and/or
documents were examined by the chartered accountant before issuing the
certificate is unknown and unclear. Under such circumstances, we are
27
unable to accept the submission of Mr. Mitra that the said certificate would
show that consideration has passed to Lakshmi Narayan on 28th May 1997.
The circumstances are such that it makes the certificate tailor-made with no
evidentiary or probative value.
Notably, the matter moved with an extraordinary fast pace. The suit
was filed on 22nd May, 1997.The facts and circumstances surrounding the
filing of the suit, drawing up of a compromise petition said to contain terms
of settlement and the dismissal of the suit for non-prosecution in the
presence of Mr. Rungta are shrouded in mystery. The thickening cloud
hovering over the plaintiff surrounding the so called previously instituted
suit and compromise petition was not satisfactorily removed by Falakata in
its suit. There are certain unusual and extraordinary features which we
have indicated above which seem to have escaped the attention of the
learned Trial judge resulting in erroneous application of law with regard to
burden and onus of proof. Within 2-3 days time from the date of filing of the
suit a compromise petition was prepared and Lakhsmi Narayan alleged to
have signed it on 28th May, 1997 at Dinhata and rest of the persons on 30th
May, 1997. The suit was however, dismissed on 30thJune, 1997 for non
prosecution. The plaintiff did not offer any explanation for not bringing it to
the attention of the learned trial Court about the said petition of
compromise. Sharma, PW6 in his deposition has said that at the time of
dismissal Mr. Rungta was present. The plaintiff claimed that Lakshmi
Narayan and Falakata have filed the compromise petition in the said suit in
accordance with Order 23 Rule 3 of the Code of Civil Procedure. It is
28
completely unbelievable that Falakata having claimed to have paid Rs.3.6
lacs would remain passive and would not seek an adjournment or invite the
court to dispose of the suit on the basis of the compromise petition.
The learned Single Judge decided the issue number 6, 9, 10, 11, 13
and 14 together. The said issues are:
6. Whether the original defendant entered into an agreement with the plaintiff
on 28.05.1997 in the form of application for compromise made under Order 23 Rule 3
read with Section 151 of the C.P.C. in O.C. suit no. 90/97 in the court of Civil Judge
(Jr. Div.) Jalpaiguri?
9. Whether the alleged compromise in a suit which has been dismissed for
default is binding on any of the alleged parties to the suit?
10. Whether the defendant's predecessor in interest had ever instituted the
alleged O.C. suit no. 90/97 in the court of Civil Judge (Jr. Div.) at Jalpaiguri or had
taken any step therein?
11. Whether the plaintiff was/is in adverse possession of the suit property at
any point of time?
13. Whether the plaintiff paid the alleged sum of Rs.3,60,000/- or any other
sum to the defendant's predecessor in interest?
14. Whether there was/is any contract of agreement between the plaintiff and
the defendant's predecessor in interest?
The learned Judge proceeds on the basis of Order 23 Rule 3 of the
C.P.C. without realising that the said petition was never moved before the
trial Court and there was no occasion for the trial Court to consider the said
petition in terms of the aforesaid provision. Moreover, the very existence of
the joint compromise petition which said to contain the terms of
compromise is in dispute. The mere admission of the signature of Lakshmi
Narayan, by DW 2 during his cross examination in connection with a
29
completely different proceeding under Section 144 of Cr.P.C. does not
necessarily lead to the conclusion that the compromise petition was signed
by Lakshmi. The learned Judge seems to have been swayed by the
submission that Lakshmi raised the issue of the existence of O.C suit no. 90
of 1997 only after the destruction of the case record. Lakshmi appointed
Shri Sindhu Roy for ascertaining the status of the suit alleged to have been
instituted by him being O.C. suit no. 90 of 1997 after Lakshmiduring his
conversion with Tapan Sarkar in relation to some other matters was
informed by Mr. Sarkar. Admittedly Lakshmi did not engage Tapan Sarkar
for the aforesaid purpose. If Lakshmi had trusted Mr. Sarkar, he could have
engaged Tapan to defend him in the latest suit. The presumption could be
that he lost faith in Tapan Sarkar and that could be the reason for which
Tapan was not called upon to give evidence on behalf of Lakshmi. The
learned Trial Judge merely summarised the evidence of the respective
parties in deciding the aforesaid issues and then arrived at the following
conclusion:
During the argument the parties to this suit did not press for the point of
adverse possession. We have Considered the submission of both sides, perused the
relevant documents as above said and considered the authority as above mentioned.
I find that the argument advanced by the learned advocate for the plaintiff is more
convincing and acceptable. Hence these issues are decided in favour of the plaintiff.
The said issues were decided in favour of the plaintiff as the learned
Judge found the argument advanced by the learned Advocate for the
plaintiffs more convincing and acceptable. It seems as if the learned trial
Judge approached the issue by trying to eliminate the impossible and
whatever remained, however, improbable was accepted as truth. No judge
30
would like to decide a case on burden of proof if he can legitimately avoid
having to do so. However, owing to the unsatisfactory state of evidence or
otherwise the court may decide the issue on the burden of proof as that
could be the only just course for him to take. The reasoning of the learned
Trial Judge can only apply when all factors are known, so that all possible
explanations except a single extremely improbable one, can properly be
eliminated. The legal concept of proof of a case on a balance of probabilities
must be applied with common sense. It requires a judge of instance before
he finds that a particular event occurred, to be satisfied on the evidence that
it is more likely to have occurred than not. If such a judge concludes, on a
whole series of cogent grounds, that the occurrence of an event is extremely
improbable, a finding by him that it is nevertheless more likely to have
occurred than not, does not accord with common sense. This is especially
so when it is open to the judge to say simply that the evidence leaves him in
doubt whether the event occurred or not, and that the party on whom the
burden of proving that the event occurred lies has therefore failed to
discharge such burden (See Rhesa Shipping CO SA v Edmunds reported
in [1985] 2 All ER 712 followed in Kanti Devi Bhutoria and Others v
Srila Dutta and others reported in MANU/WB/0884/2015).
The Court can only enforce specific performance contract if it is based
on a valid and enforceable contract. Where a valid and enforceable contract
has not been made, the Court would not pass an order for specific
performance. The specific performance of the contract stipulates the terms
for execution and the Courts direct the party in default to do the very thing
31
which he contracted to do and the acceptance must be observed
corresponding to the terms of the offer.
A Civil suit is decided on the preponderance of probabilities. The
standard of proof in civil trial has been lucidly explained recently by the
Hon'ble Supreme Court in M. Siddiq (D) thr. L.Rs. v. Mahant Suresh Das
&Ors., reported in 2020(1) SCC 1paragraphs 720-725 which reads:
"720. The court in a civil trial applies a standard of proof governed by a
preponderance of probabilities. This standard is also described sometimes as
a balance of probability or the preponderance of the evidence. "Phipson on
Evidence" formulates the standard succinctly: If therefore, the evidence is such
that the court can say "we think it more probable than not", the burden is
discharged, but if the probabilities are equal, it is not.114 In Miller v. Minister
of Pensions (1947) 2 ALL ER 372, Lord Denning, J. (as the Master of Rolls then
was) defined the doctrine of the balance or preponderance of probabilities in
the following terms:
(1)... It need not reach certainty, but it must carry a high degree of
probability. Proof beyond reasonable doubt does not mean proof
beyond the shadow of doubt. The law would fail to protect the
community if it admitted fanciful possibilities to deflect the course of
justice. If the evidence is so strong against a man as to leave only a
remote possibility in his favour which can be dismissed with the
sentence, "of course it is possible, but not in the least probable" the case
is proved beyond reasonable doubt, but nothing short of that will
suffice.
721. The law recognises that within the standard of preponderance of
probabilities, there could be different degrees of probability. This was
succinctly summarized by Denning, LJ in Bater v. Bater [1951] P. 35, where he
formulated the principle thus:
32
So also in civil cases, the case must be proved by a preponderance of
probability, but there may be degrees of probability within that
standard. The degree depends on that subject matter.
722. The definition of the expression 'proved' in Section 3 of the Evidence Act
is in the following terms:
3. ..... "Proved".--A fact is said to be proved when, after considering the
matters before it, the Court either believes it to exist, or considers its
existence so probable that a prudent man ought, under the
circumstances of the particular case, to act upon the supposition that it
exists.
723. Proof of a fact depends upon the probability of its existence. The finding
of the court must be based on:
723.1. The test of a prudent person, who acts under the supposition that a
fact exists;
723.2. In the context and circumstances of a particular case.
724. Analysing this, Y V Chandrachud J (as the learned Chief Justice then
was) in Dr. N G Dastane v. S Dastane (1975) 2 SCC 326 held:
The belief regarding the existence of a fact may thus be founded on a
balance of probabilities. A prudent man faced with conflicting
probabilities concerning a fact-situation will act on the supposition that
the fact exists, if on weighing the various probabilities he finds that the
preponderance is in favour of the existence of the particular fact. As a
prudent man, so the court applies this test for finding whether a fact in
issue can be said to be proved. The first step in this process is to fix the
probabilities, the second to weigh them, though the two may often
intermingle. The impossible is weeded out at the first stage, the
improbable at the second. Within the wide range of probabilities the
court has often a difficult choice to make but it is this choice which
ultimately determines where the preponderance of probabilities lies.
Important issues like those which affect the status of parties demand a
closer scrutiny than those like the loan on a promissory note: "the
nature and gravity of an issue necessarily determines the manner of
33
attaining reasonable satisfaction of the truth of the issue [Per Dixon, J.
in Wright v. Wright, (1948) 77 CLR 191, 210] "; or as said by Lord Denning, "the degree of probability depends on the subject-matter. In proportion as the offence is grave, so ought the proof to be clear [Blyth v. Blyth, (1966) 1 AER 524, 536] ". But whether the issue is one of cruelty or of a loan on a pronote, the test to apply is whether on a preponderance of probabilities the relevant fact is proved. In civil cases this, normally, is the standard of proof to apply for finding whether the burden of proof is discharged.
725. The Court recognised that within the standard of preponderance of probabilities, the degree of probability is based on the subject matter involved.] (emphasis supplied) Lakshmi during his lifetime filed an affidavit in chief in which he has categorically denied the existence of the suit and the agreement. Lakshmi Narayan filed the written statement on 20th May, 2005. It was supported by an affidavit affirmed on 18th May, 2005. Prior thereto, he filed an affidavit in opposition to the injunction application on 10th March, 2005 affirmed on 17th March, 2005. The written statement was quite detailed as the affidavit in opposition. In the written statement he had categorically denied the existence of the suit, compromise petition or any instruction given to Tapan to file a suit. Unfortunately, Lakshmi died during the trial and he was substituted by the present appellants. The present appellants have filed their respective affidavits in chief and were cross-examined. It cannot be disputed that to some extent, the evidence of the said two substituted defendants/appellants were hearsay, however, the younger son of Lakshmi, DW2 had categorically stated that he had assisted his father in connection with the present suit and that Tapan was never instructed to file any earlier suit. DW 2 has also corroborated the statement of his father 34 about the acrimonious relationship between Ajit and his father. This evidence has remained unshaken. The statements made in the written statement cannot be totally discarded although it may have a weak evidentiary value. There is nothing in the Evidence Act which would render such evidence inadmissible. The written statement was duly affirmed by the original defendant during his life time. It is certainly a piece of evidence whose evidentiary and probative value is required to be examined by taking into consideration the circumstantial and attending facts concerning the validity, authenticity and credibility of the earlier alleged suit. In our view, the evidence is admissible but the weight to be attached to such evidence should depend upon the facts and circumstances of the case. It ought not to be rejected entirely. The only difficulty would be that the witness was not examined in open court upon oath or that he has filed an affidavit in chief which can be a reiteration of his written statement. Considering the fact that the written statement was accompanied by an affidavit for the present purpose we will consider it as his chief and assess the evidentiary and probative value of the statements made in the said pleading. In fact under the amended provision of Order 6, Rule 5, Sub Rule 4 the person verifying the pleading is mandatorily required to furnish an affidavit in support of his pleading. By reason of such amendment it has changed the complexion of the written statement and increased its evidentiary value.
We have discussed earlier that the plaintiff has failed to prove due execution of the compromise petition and the terms of compromise. The consideration amount paid to Lakshmi is also not proved. These factors 35 seem to have been overlooked by the learned trial Judge and the evidence adduced on behalf of Lakshmi or even the witnesses on behalf of plaintiff were diluted and interpreted in a manner which could not be accepted for the reasons we have indicated above.
The case could not have been decided by the process of elimination of the impossibility and the remaining improbable could not have been treated to be the truth so as to form the basis of finding in favour of the plaintiff when the probability of existence of the suit, compromise petition and its execution are not for removed from doubt. The ingenuity and the mechanism adopted by the plaintiff in perfecting its title by giving an impression of a suit filed by Lakshmi was overlooked and ignored by the learned trial Judge while appreciating the evidence.
We find substance in the argument of Mr. Probal Kumar Mukherjee learned Sr. Counsel appearing on behalf of the appellant that the suit is barred by limitation. This issue in our view has not been correctly decided by the learned Trial Court and we hardly find any discussion on this issue. If it is accepted for the purpose of argument that a compromise petition was entered into on 28thMay, 1997, the said agreement in Clause B mentions execution of a deed of conveyance in favour of the plaintiff. Admittedly, no deed of conveyance was executed during the pendency of the suit. On the contrary, the suit was dismissed on 30th June, 1997 for non prosecution in presence of the representative of Falakata. Thereafter, on 7th June, 2000 an application was filed by Lakshmi against Ajit and Ors. under Section 144 of the Cr. P.C alleging threatened dispossession.
36
The agreement unless registered could not have transferred any interest in favour of Falakata as it involves creation and extinction of rights in the property. By reason of the suit being dismissed for non-prosecution no interest could have accrued in favour of Falakata in respect of the property in question unless a deed of conveyance is registered. Falakata could not explain the reason for not going ahead with the compromise petition and allowing the suit to be dismissed for non-prosecution. The filing of the suit, compromise petition and dismissal of the suit for non- prosecution happened between 22ndMay 1997 and 30th June 1997. This gives a clear impression that Falakata was more interested to create a document in their favour to be used as a ruse against the defendant at an appropriate point of time. Although, the proceeding under Section 144 of the Criminal Procedure Code may not have related to the suit property, it undoubtedly shows that in 2000, the relation between Falakata and Lakshmi Narayan was bitter and acrimonious. In such background, it is very difficult to accept that Lakshmi had agreed to extend the time for execution of the agreement for sale either contemporaneously or till 31stDecember 2000 as claimed by Falakata. There is no evidence as to whether Lakshmi had executed any power of attorney in favour Tapan Sarkar. If it were not executed in terms of the compromise petition then it logically follows that Lakshmi was unwilling to execute any power of attorney in favour of Tapan and had denied his obligation under the said compromise petition. This holds good even if Lakshmi had knowledge of the compromise petition and he had signed the said document. This is important for the purpose of deciding the issue of limitation. 37
Mr. Mitra has relied upon the decision of the Apex Court in Rathnavati & Anr. (supra) and decision of the Jammu and Kashmir High Court in Kharku & Ors.(supra) to impress upon us that the suit was filed within the period of limitation. The judgement in Kharku & Ors.(supra) is based on an interpretation of Article 84 of the earlier Limitation Act which corresponds to Section 54 of the Limitation Act, 1963. It is clear from a reading of the said Article that if a date is fixed for performance of an agreement, then non-compliance of the agreement on that date would give a cause of action to file a suit for specific performance within 3 years from the date so fixed. However, when no such date is fixed the limitation of 3 years to file a suit for specific performance would begin when the plaintiff has "noticed" that the defendant had refused the performance of the agreement. In the present case, if we accept that there is an agreement between the parties on 28th May 1997, the refusal to execute the said conveyance would be 30th June 1997 when the suit was dismissed for non-prosecution without the conveyance being executed by and between the parties. Mr. Sharma PW 6 in his deposition has stated that so far as he could recollect, Mr. Rungta had appeared before the court on 30th June 1997 but neither had Lakshmi appeared nor had his advocate taken any steps in the learned Court and consequently, the suit was dismissed for non-prosecution. This is a clear notice of refusal of performance by Lakshmi Narayan under the second clause of Article 54 of the Limitation Act.
There is no contemporaneous evidence to show that beyond June 1997, the time to execute the conveyance was mutually extended or 38 extended at the request of Lakshmi Narayan. In fact, the evidence is to the contrary as we find from documentary evidence that Lakshmi initiated a proceeding under Section 144 of the Criminal Procedure Code on 7th June 2000. Notice was served upon the accused persons which include Ajit. PW 3 and PW 6 in their deposition have confirmed that a proceeding was initiated against Ajit and Falakata under Section 144 of the Cr.P.C and PW6 specifically in his deposition has admitted to have taken steps in the said proceeding on behalf of Falakata. This acrimonious relationship between Lakshmi and the present plaintiff clearly runs contrary to the fabric of the case made out by the plaintiff for extension of time to complete the transaction and any mutuality between the parties on this score.
The plaint in paragraph 9 has stated that on the basis of the request of Lakshmi the performance of the agreement was extended till 31st December, 2000.It was further claimed that the said time was however, mutually extended until on 25th August, 2004, Lakshmi refused to execute the deed of conveyance unless he is paid a further sum of Rs.3 lacs. Between December 2001 till the date of alleged denial, the contentions are all based on oral assertion and there is no evidence of the person with whom Lakshmi had conversation in this regard in which he agreed to extend the said time. There is not a single scrap of paper between the date of execution of the alleged agreement on 28th May, 1997 till the date of filing of the suit calling upon Lakshmi to execute the deed of conveyance in favour of the plaintiff on the basis of such alleged terms of settlement. From the aforesaid it can be safely concluded that the plaintiff had due notice of the refusal if 39 not in June 1997 but positively by June 2000 or by the end of the year 2000. It is surprising that the plaintiff has not demanded performance of the said agreement in writing between the date of alleged execution of the agreement for sale till the date of filing of the suit by Falakata i.e. 16th December 2004. In view thereof, we are unable to accept the submission of Mr. Mitra that the suit for specific performance was filed within the period of limitation.
The question that would obviously arise is what prevented Falakata from appearing in the said suit and appraising the learned Court of the compromise petition and the existence of terms of compromise. According to Falakata, Mr. Rungta was present when the suit was dismissed for non- prosecution. The burden of showing the existence of the terms of compromise is on the plaintiff. The plaintiff is a company involved in commercial activities. In a normal situation and as expected in a case of this nature, the plaintiff would not have allowed the suit in which such a compromise petition is claimed to have been filed by the parties, to be dismissed for non-prosecution when the deed of conveyance was not executed although the consideration amount was claimed to have been paid to Lakshmi Narayan. This was expected from Falakata in view of clause B and clause C of the proposed terms of compromise which reads:
"B. The plaintiff in consideration of the sum of Rs.3,60,000/- (Rupees three lac sixty thousand) only paid by the defendant No.3 to the plaintiff simultaneously with the execution of this Solenama (the receipt whereof the plaintiff hereby admits and acknowledges and of and from the same release and discharge the plaintiff) and the plaintiff has beneficial owner do hereby grant, convey, transfer, assign and assure unto and to the use of the defendant no.3 free from all encumbrances together with 40 the structures and building whereupon or on particular whereof the same is erected and built by the defendant no.3 together with all building, trees, conveyances, hedges, ditches, ways waters, water course, lights privileges, easement and appurtenances whatsoever supposed to belonged or be a appurtenant thereto and the plaintiff, his heirs, administrators or assigns further covenant that he or they shall at the request and cost of the plaintiff and his assigns do or execute or cause to be done or executed a proper deed of conveyance and all such lawful acts, deeds and things whatsoever for further and more perfectly conveying and assuring the suit property and every part thereof in the manner aforesaid according to true intent and meaning of this decree.
C. The plaintiff do herein relinquishes unto the defendant no.3 all his suppose right, title, interest and beneficial claim over the suit property to the extent that the same was henceforth ceased and be extinguished to all intends and purpose and such relinquishment may be deemed to be absolute relinquishment in consideration of the sum of Rs.3,60,000/- (Rupees three lac sixty thousand) now paid by the defendant no.3 to the plaintiff, the receipt of which sum the said plaintiff hereby acknowledges.
A prudent business man having regard to the nature of the dispute and having claimed to have paid the consideration could not have remained a mute spectator when it is evident that his dream to have the property is going to be shattered. This is extremely unusual and something more than what meets the eyes. The contents of the compromise petition would show that Falakata was claiming adverse possession although the period for claiming such right had fallen short of 12 years from the date of claim of hostile and continuous possession. Falakata was trying to legitimize and legalise its wrongful act and had orchestrated the litigation only for the purpose of creating a document to claim ownership. The earlier suit and compromise petition are artifice and designed to create a legal right in 41 favour of Ajit and Falakata. It reminds us of the proverbial words- "What is apparent is not real and what is real is not apparent."
The plaintiff wants the existence of the previous suit, compromise petition and the terms of compromise to be believed. These assertions are to be proved by the plaintiff. For the court to give judgment in favour of the plaintiff as to his legal right to claim execution of the deed of conveyance the existence of all the aforesaid facts must be proved by Falakata as the burden of proof that those facts exist is on the plaintiff. The burden of proof on the pleadings never shifts and it remains constant. The initial burden of proving a prima facie case in his favour is cast on the plaintiff, when he gives such evidence as will support a prima facie case, the onus shifts on to the defendant to adduce evidence rebutting the case made out by the plaintiff. As the case continues to develop the onus may shift back to the plaintiff. It may not be easy in all cases to decide at what particular stage in the course of evidence the onus shifts from one side to the other. When after the entire evidence is adduced, the court feels it cannot make up its mind as to which of the versions is true, it will held that the party on whom the burden lies has not discharged the burden. [See: K. Lakshmanna v T. Venkateswarlu reported at AIR 1949 PC 278].
Section 101 of the Evidence Act lays down the rule that "whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exits." In other words it is the same as saying that the burden of proof lies on the party who substantially asserts the affirmative of the issue and 42 not on the party who denies it. The burden of proof in any particular case depends on the circumstances in which the claim arises.
The elementary rule in Section 101 is inflexible. In terms of Section 101, Evidence Act, 1872, ordinarily, the burden of proving the fact rests on the party who substantially asserts the affirmative of the issue and not on the party who denies it. The said rule may not be universal in its application and there may be exception thereto.
Burden of proof would mean that a party has to prove an allegation before he is entitled to a judgment in his favour.
The tests that can conveniently be adopted for ascertaining on whom the burden of proof lies are first, to consider which party would succeed if no evidence were given on either side, and secondly to examine what would be the effect of striking out of the record the allegations to be proved; bearing in mind that the burden of proof must be on the party that would fail, if either of these steps were pursued.
Bowen, L.J., in the well-known case of Abrath v. N. E. Railway Co., 11 Q.B.D. 440 at 456, lays down the canons of this subject as follows:-
"Whenever litigation exists, somebody must go on with it; the plaintiff is the first to begin; if he does nothing he fails; if he makes a prima facie case, and nothing is done to answer it, the defendant fails. The test, therefore, as to the burden of proof or onus of proof, whichever term is used, is simply this; to ask oneself which party will be successful if no evidence is given, or if no more evidence is given than has been given at a particular point of the case, for it is obvious that, as the controversy involved in the litigation travels on, the parties from moment to moment may reach points at which the onus of proof shifts, and at which the tribunal will have to say that, if the case stops there, 43 it must be decided in a particular manner. The test being such as I have stated, it is not a burden that goes on forever resting on the shoulders of the person upon whom it is first cast. As soon as he brings evidence which, until it is answered, rebuts the evidence against which he is contending, then the balance descends on the other side, and the burden rolls over until again there is evidence which once more turns the scale. That being so, the question of onus of proof is only a rule for deciding on whom the obligation of going further, if he wishes to win, rests. It is not a rule to enable the jury to decide on the value of conflicting evidence. So soon as a conflict of evidence arises it ceases to be a question of onus of proof."
The burden of establishing a case is initially on the plaintiff but shifts as soon as a party adduces sufficient evidence to raise a presumption in its favour.
The plaintiff lost at the threshold of this test.
To sum up, the plaint and the terms of settlement of the alleged previous suit O.C. 90 of 1997 set up by the plaintiff were subject to proof by the persons setting them up and would affect the result of the suit based on what is proved. Mere production of the certified copy is not conclusive evidence of the filing of the suit as there is no means to ascertain its authenticity in absence of production of the original pleadings and documents. The original record of the Court was destroyed on 31st January, 2002. The plaintiff did not take any steps to enforce the said compromise prior to the destruction of the said record and failed to establish the reason for not pursuing it until the suit was filed on 16th September, 2004. The probability of a suit being filed by Lakshmi Narayan against Ajit in 1997 and thereafter allowing it to be dismissed for non-prosecution is improbable and unnatural. Lakshmi Narayan faced with such hostility from Mahendra and 44 Ajit who had teamed up against him at the relevant point of time makes the existence of the suit, compromise petition and the subsequent dismissal of the suit for non prosecution highly improbable. The plaintiff has failed to establish the preponderance of probability in his favour of the existence of the suit and the compromise petition.
Under such circumstances we set aside the judgment and decree dated October 19, 2006. The appeal succeeds.
The respondent shall pay Rs.1 lac to the appellants by Pay Order/Demand Draft in the name of the appellant No.1 towards cost and a further sum of Rs.1 lac to the State Legal Services Authority to be earmarked for Juveniles for utilisation by the Juvenile Justice Committee, High Court within three weeks from date.
The department is directed to send down the LCR to the trial Court.
I agree (Soumen Sen, J.)
(Siddhartha Roy Chowdhury, J.)
Later:
Prayer for stay is considered and declined.
(Siddhartha Roy Chowdhury, J.) (Soumen Sen, J.)