Calcutta High Court
Karan Paul vs Ms. Kamala Jindal & Anr on 16 December, 2020
Author: Arindam Mukherjee
Bench: Arindam Mukherjee
IN THE HIGH COURT AT CALCUTTA
TESTAMENTARY AND INTESTATE JURISDICTION
ORIGINAL SIDE
Before:
THE HON'BLE JUSTICE ARINDAM MUKHERJEE
GA No.1839 of 2018
with
TS No.8 of 2017
IN THE GOODS OF :
JIT PAUL (Since deceased)
IN THE MATTER OF :
KARAN PAUL
...........Plaintiff
Vs.
MS. KAMALA JINDAL & ANR.
...........Defendant
For the plaintiff/ : Mr. Abhrajit Mitra, Sr. Advocate
petitioner Mr. Pranit Kr. Bag,
Mr. D. Sen
........Advocates
For Sushma Berlia : Mr. H. L. Tiku, Sr. Advocate
Ms. Yasmeet Kaur,
Ms. Debamitra Adhikary,
Mr. Rohit Banerjee,
Ms. Anindita Mukherjee
.......Advocates
Heard on : 25.11.2019, 13.12.2019 and 06.01.2020.
Judgment on : 16th December, 2020.
G.A 1839 of 2018
ARINDAM MUKHERJEE, J. :
1) A very reputed businessman, namely, Jit Paul Aggarwal, also known only as Jit Paul said to have left behind a Will dated 23rd May, 1990(hereinafter referred to as the said Will). Under the said Will, he appointed his brother Swaraj Paul to be the sole executor and trustee. The said Jit Paul died on 3rd June, 2009. The probate of the Will was not applied for by the named executor. Under such circumstances, one of the beneficiaries and a legatee, namely, Karan Paul applied for letters of administration over and in respect of the estate of Jit Paul, with the said Will annexed (hereinafter referred to as the said application). The said application for grant of letters of administration was objected to by Ms. Kamala Jindal and Mrs. Sushma Berlia. The said application for letters of administration being PLA No.263 of 2011 was set down as contentious cause and was thereafter marked as Testamentary Suit No.8 of 2017.
2) Before the testamentary number was allotted to the said proceedings for grant of letters of administration, an application was made therein being GA 1188 of 2016, inter alia, for appointment of an administrator pendente lite. The said GA being no.1188 of 2016 was disposed of by an order dated 7th February, 2017, wherein Mr. Shyamal Sarkar, a learned senior advocate, was appointed as administrator pendente lite to discharge all duties and functions in terms of the provisions contained in Section 247 of the Indian Succession Act, Page 2 of 11 G.A 1839 of 2018 1925 (hereinafter referred to as the Act of 1925). The said order provides as follows :
"The Administrator pendente lite is at liberty to appoint a Chartered Account of his choice for the purpose of the preparation of the accounts including the list of the debtors and creditors of the testator and shall also take possession of the assets comprised in the estate of the said testator. If any of the immovable property is in actual and physical possession of any properties of the family of the testator, such possession shall be allowed to continue under the said Administrator pendente lite and it is open to the Administrator pendente lite to take appropriate steps in this regard.
Apart from the administration and the management of the estate of the testator, the Administrator pendente lite shall also prepare the accounts with the help of the Chartered Accountant so appointed and shall see that the Returns are filed with the Income Tax Authorities. The Administrator pendente lite is further allowed to defend or prosecute any legal proceedings, if occasion so arises and shall submit the report before this Court on quarterly basis indicating the exact state of affairs."
3) By another order dated 20th December, 2016, passed in GA 2829 of 2016, Mr. Mahendra Parasrampuria was appointed to do the following :
"..................shall verify and scrutinize the records and the accounts pertaining to the estate of Jit Paul, since deceased and shall give a report of audit upon preparation of the Return to be submitted before the Income Tax Authority on or before 31st December, 2016. All the parties who are directly or indirectly in possession of any of the relevant documents are directed to cooperate, assist and help the Chartered Accountant in discharging such duties and shall not unnecessarily raise any objection which would either hamper the audit or filing of the Return on or before the said date. The remuneration of the Chartered Accountant shall be borne equally by the contesting parties before this Court in equal share. Only for the purpose of signing the Return which shall be filed before the Income Tax Authority prepared by the said Chartered Account, Mr.Karan Paul is authorized in this regard. Such authorisation is limited to this extent of filing the Return with the Income Tax Authority and shall not be construed to have bestowed any further power."
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G.A 1839 of 2018
4) The defendant no.2 (hereinafter referred to as the petitioner) has filed this instant application being GA 1839 of 2018, inter alia, for a declaration that the administrator pendente lite has the power to issue directions even to strangers to these proceedings who have according to the petitioner lodged claim to the movable and immovable assets of the deceased claiming to be a creditor of the deceased. The petitioner also prayed for an order that the administrator pendente lite should issue appropriate directions amongst others on Apeejay Private Limited (for short APL), Steel Crete Private Limited (for short Steel Crete) and UBS Securities India Private Limited (for short UBS) and the administrator pendente lite to assimilate, take over and preserve the estate of the deceased, for holding a special investigation / special audit by an independent agency with regard to the transactions carried out by the deceased during the period 1st April, 2008 till his death on 3rd June, 2009 and to provide the petitioner with necessary information / documents relating to all transactions stated to have been carried out by the deceased during his lifetime from 1st April, 2008 to 3rd June, 2009.
5) Contention of the petitioner a) It is submitted on behalf of the petitioner that the auditor appointed by
this Court prepared an income tax return of the deceased pertaining to the estate. The same has been filed on 30th December, 2016 at around 19:10 hrs. The last date for completion of assessment was 31st December, 2016 and, as such, the income tax department being left with no time to make enquiries and / or Page 4 of 11 G.A 1839 of 2018 to make proper assessment accepted the return vide their order dated 31st December, 2016. The tax demand according to the said order is Rs.44,34,759/-.
b) It is further submitted by the petitioner that the audit report for the period 1st April, 2008 to 31st March, 2009 was made over to the petitioner on 20th June, 2017. After scrutinizing the audit report, the petitioner allegedly found therein glaring errors or misstatements and irregularities.
c) The petitioner also submitted that the plaintiff did not make over all documents / bank passbook and / or statements, as a result whereof the auditor prepared the return on the basis of the available documents and, as such, the return so filed for the period 1st April, 2008 to 31st March, 2009 so filed is incorrect.
d) It is also the case of the petitioner that authenticity of certain transactions entered in the books of accounts during the period subsequent to the death of Jit Paul could not be verified by the auditor as necessary authorisations of documents were not made available to them. It was the responsibility of Karan Paul, the plaintiff to provide with such details which he deliberately failed to do so.
e) The petitioner alleges that the money pertaining to a security deposit of Rs.80,00,000/- receivable by Jit Paul, deceased, from UBS shown in the books of accounts for the period prior to the date of death of Jit Paul has been shown as Page 5 of 11 G.A 1839 of 2018 refunded by debiting the UBS account for the said sum of Rs.80,00,000/- and crediting the account of APL through journal entries in the books of accounts of the estate of Jit Paul. By various ways and means, APL according to the petitioner has received an aggregate of Rs.1,26,50,000/- which were to be received by Jit Paul from various persons / entities has been siphoned off from the estate by misappropriation. In this process, APL has depleted the value of the estate and, as such, the administrator pendente lite should either himself or through agencies be directed to probe into such alleged misappropriation of money due and payable to the estate of the deceased.
Plaintiff's contention
6) The plaintiff has used an affidavit in the instant application. The plaintiff has made the following submission:-
a) The allegation of misappropriation of the funds belonging to the deceased is baseless and, as such, no enquiry by the administrator pendente lite or through any person / entity engaged by him regarding such alleged misappropriation cannot and does not arise. In any event, the jurisdiction of the probate Court is very limited, it only looks into genuineness and validity of the Will, the testamentary capacity of the testator / testatrix. The probate Court does not decide on the title of the assets and properties forming part of the estate and covered by the Will. The petitioner in an indirect manner is seeking adjudication of rights in respect of the money said to have been received by Page 6 of 11 G.A 1839 of 2018 APL. The probate Court is invited to adjudicate as to whether the money was due to APL or should have come to the estate of the deceased from UBS. This adjudication can only be done by a competent Civil Court or Forum having jurisdiction to adjudicate upon these issues.
b) In respect of the jurisdiction of the probate Court, the respondents cited two judgments, one rendered in the case of Krishna Kumar Birla vs. Rajendra Singh Lodha & Ors. reported in (2008) 4 SCC 300 and the other rendered in the case of Kanwarjit Singh Dhillon vs. Hardyal Singh Dhillon reported in (2007) 11 SCC 357.
c) The plaintiff further submits that the power and authority of the probate Court as also that of the administrator pendente lite is provided in Part IX of the Act of 1925. The executor cannot be called for to issue appropriate direction upon the third parties so also the administrator. In the instant case, APL, Steel Crete and UBS are third parties, no direction can, therefore, be passed on them by the administrator pendente lite. The said APL, Steel Crete and UBS are neither necessary nor proper parties to this testamentary suit and, as such, they cannot also be made parties therein to authorise the administrator pendente lite to pass directions on them as prayed for by the defendant / petitioner.
d) It is also submitted on behalf of the plaintiff that the assessment return complained of by the petitioner is already under challenge in an appeal filed by Page 7 of 11 G.A 1839 of 2018 the administrator pendente lite. The amount demanded on account of tax by the income tax department is subject to the said appeal. Moreover, it is due to the resistance of the petitioner that the appointment of the administrator pendente lite got delayed which ultimately caused the delay in filing of the return for the period 1st April, 2008 to 31st March, 2009. The petitioner after being an instrumentality in such delay is complaining about the delay in filing of return.
That apart and in any event, the petitioner cannot complain of any loss to the estate left behind by the deceased unless the appeal is finally decided.
7) The petitioner in reply submits that APL being one of the creditors of the deceased and the estate left beyond by him was well-known to the plaintiff in view of the proceedings before the Hon'ble Delhi High Court. The said proceedings continued to the knowledge of the plaintiff. It cannot be said that the petitioner is seeking directions from this Court on the administrator pendente lite for proceeding against third parties. Since APL has claimed to be a creditor of the deceased and his estate it is necessary to verify the alleged claim of APL before it is paid. By making book adjustment money payable by UBS to the estate and money others have been paid to APL. APL having claimed itself to be a creditor has the right to object to the grant, has a caveatable interest and is, therefore, a necessary and proper party to the suit. The parties who owe to the estate should also be made parties to the suit.
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G.A 1839 of 2018 Court's view
8) i) After considering the rival contentions, the pleadings and the materials on record, I am of the opinion that there can be no dispute as to the jurisdiction of the probate Court. Krishna Kumar Birla (supra) and Kanwarjit Singh Dhillon (supra) have clearly laid down the jurisdiction of the probate Court which has been considered by a learned Single Judge of this Court in 2017 (4) CHN 114 [In the Goods of Abha Rani Sinha @ Abha Sinha (Deceased)]. That apart, Part IX of the 1925 Act is clear enough as to the testamentary jurisdiction of a Court. It is also a settled position that the probate Court is required to protect the estate of the deceased till the grant and ultimate distribution to the beneficiaries is over. In case of letters of administration, the same principle also applies.
ii) In the instant case, the Court exercising testamentary jurisdiction has passed necessary orders to protect the estate. So far as the money claimed by APL and paid from the money owed by UBS to the estate is concerned, the right as to the creditor in receiving such money is required to be adjudicated. Same is also the case in respect of other alleged misappropriation. Only on such adjudication, it can be said that the money which should form part of the estate and subject matter of the grant has been sequestered. This declaration and consequential direction to reverse the entries or the refund of the money to the estate can be made or given by a Civil Court. The Court exercising testamentary jurisdiction simply decides genuineness and validity of the Will, Page 9 of 11 G.A 1839 of 2018 the testamentary capacity or whether the will is a product of fraud, coercion, undue in future or whether the Will is tainted with suspicious circumstances for the purpose of grant of probate or letters of administration. It is not clothed with the authority to go into the title of the movables and immovables forming part of the estate. The probate Court though is obliged to protect the estate but cannot go into the issue as to who owed money to the estate or who is to receive money from the estate as sought for in the instant case. It may so happen that APL is not entitled to receive the money it has allegedly received from UBS or the money received by other alleged creditor were not payable by the deceased or that the money said to be receivable from UBS and other entities who owed to the deceased would come to the estate or remain with the estate on due adjudication by a competent Court. It is for this reason the executor or the administrator in whose favour the grant or letters of administration is issued has to file accounts stating the properties and assets which are ultimately received by him and available for distribution. The administrator pendente lite has no authority to distribute. The administrator or the executor even after the grant can be asked to collect and distribute the properties and assets after a declaration as to the title of the assets and properties of the estate by a competent Court is made. The scope and ambit of testamentary jurisdiction is evident from the 1925 Act as also the judgments of Krishna Kumar Birla (supra) and Kanwarjit Singh Dhillon (supra) and there can be no doubt about the same. The petitioner had approached the administrator pendente lite with the same set of allegations. Page 10 of 11
G.A 1839 of 2018
iii) The administrator pendente lite has given his findings on such application made by the petitioner and after considering the same, I find no reasons to differ or discredit the same. The appeal as against the assessment order is pending and it is correct that only after all statutory remedies as to the assessment orders for the period between 1st April, 2008 to 31st March, 2009 are exhausted, such order will achieve finality. It cannot also be said at this stage that the estate had suffered loss in view of any alleged misappropriation.
iv) The reliefs claimed by the petitioner, therefore, cannot be granted. The petitioner is, however, at liberty to avail any other remedy available to the petitioner in law with regard to the allegations as against the alleged misappropriation or as to the genuineness of the dues of the creditors and the money said to be due to the estate of the deceased but allegedly received by the creditors.
v) The application is accordingly disposed of. There shall, however, be no order as to costs.
Urgent photostat certified copy of this judgment and order, if applied for, be supplied to the parties on priority basis after compliance with all necessary formalities.
(ARINDAM MUKHERJEE, J.) Later:
The prayer for stay of operation of the judgment and order is considered and refused.
(ARINDAM MUKHERJEE, J.) Page 11 of 11