IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 23.11.2011 C O R A M THE HONOURABLE MR.JUSTICE K.MOHAN RAM AND THE HONOURABLE MR.JUSTICE G.M.AKBAR ALI A.S.Nos.281 of 2000 & 332 of 1999 & C.M.P.Nos.13167, 12013 & 12014 of 2004 & C.M.P.No.974 of 2011 R.Janakiammal ... Appellant in A.S.No.281 of 2000 & 7th respondent in A.S.No.332 of 1999 -Vs.- S.R.Somasundaram ... 1st respondent in A.S.No.281 of 2000 & Appellant in A.S.No.332 of 1999 S.K.Kumaraswamy (died) ... 2nd respondent in A.S.No.281 of 2000 & 1st respondent in A.S.No.332 of 1999 K.Sundarambal ... 3rd respondent in A.S.No.281 of 2000 & 2nd respondent in A.S.No.332 of 1999 K.Kandavadivel ... 4th respondent in A.S.No.281 of 2000 & 3rd respondent in A.S.No.332 of 1999 S.K.Chinnaswamy ... 5th respondent in A.S.No.281 of 2000 & 4th respondent in A.S.No.332 of 1999 C.Kamalam ... 6th respondent in A.S.No.281 of 2000 & 5th respondent in A.S.No.332 of 1999 C.Senthilkumaravel ... 7th respondent in A.S.No.281 of 2000 & 6th respondent in A.S.No.332 of 1999 S.Saraswathy ... 8th respondent in both Appeal Suits C.M.Kumaraswamy ... 9th respondent in both Appeal Suits S.R.Shanmugavelayutham ... 10th respondent in both Appeal Suits E.N.Sivaswamy ... 11th respondent in both Appeal Suits E.N.Othiswamy ... 12th respondent in both Appeal Suits E.N.Ramaswamy ... 13th respondent in both Appeal Suits E.N.Palaniswamy ... 14th respondent in both Appeal Suits S.Kamalam ... 15th respondent in both Appeal Suits O.Rukmani ... 16th respondent in both Appeal Suits R.Rajalakshmi ... 17th respondent in both Appeal Suits P.Savithri ... 18th respondent in both Appeal Suits K.Subbian ... 19th respondent in both Appeal Suits Shri Mookambiga Spinning Mills Ltd., ... 20th respondent in both Appeal Suits 20th Century Finance Corporation Ltd., ... 21st respondent in both Appeal Suits Sri Vasudeva Textiles Ltd.... 22nd respondent in both Appeal Suits E.O.Sathishkumar ... 23rd respondent in both Appeal Suits E.R.Elango ... 24th respondent in both Appeal Suits P.Rukmani ... 25th respondent in both Appeal Suits M/s. Sangeeth Textiles Ltd., ... 26th respondent in both Appeal Suits https://hcservices.ecourts.gov.in/hcservices/ S.Vasanthakumari, D/o. Late Kumaraswamy ... 27th respondent in both Appeal Suits R.Chitra Devi, D/o. Late Kumaraswamy ... 28th respondent in both Appeal Suits K.Santhalakshmi, D/o. Late Kumaraswamy ... 29th respondent in both Appeal Suits P.Krishnaveni, D/o. Late Kumaraswamy ... 30th respondent in both Appeal Suits (R-27 to R-30 brought on record as Legal Representatives of the deceased, S.K.Kumaraswamy, vide order of Court, dated 13.02.2008 made in CMP Nos.10793 & 10792 of 2005) Prayer:- Appeal Suits filed under Section 96 of the Code of Civil Procedure against the judgment and decree, dated 30.09.1997, made in O.S.No.1101 of 1987 on the file of the Principal Subordinate Court, Coimbatore. For Appellant in A.S.No.281 / 2000 : Mr. S.Parthasarathy, Sr. Counsel, for, Mr. J.Ramakrishnan For Respondents in A.S.No.281 /2000: Mr. Srinath Sridevan, for R-1 Mr. T.R.Rajagopalan, Sr. Counsel, for, Mr. T.R.Rajaraman, for R-3 and R-4 Mr. T.R.Mani, Sr. Counsel, for, Mr. K.R.A.Muthukrishnan, for R-7 Mr. S.Thangavel, for R-8 Mr. M.S.Krishnan, Sr. Counsel, for, M/s. Sarvabhavman Associates, for, R-11 to R-20 & R-22 to R-26 Mr. T.R.Rajagopalan, Sr. Counsel, for, Ms. Pushpa Sathyanarayanan, for R-27 to R-30 No Appearance : R-5, R-6, R-9, R-10, R-21. For Appellant in A.S.No.332 / 1999 : Mr. Srinath Sridevan For Respondents in A.S.No.332 /1999: Mr. T.R.Rajagopalan, Sr. Counsel, for, Mr. T.R.Rajaraman, for R-2 and R-3 Mr. T.R.Mani, Sr. Counsel, for, Mr. K.R.A.Muthukrishnan, for R-6 Mr. S.Raghavan, for R-7 Mr. S.Thangavel, for R-8 Mr. M.S.Krishnan, Sr. Counsel, for, M/s. Sarvabhavman Associates, for, R-11 to R-26 Mr. T.R.Rajagopalan, Sr. Counsel, for, Ms. Pushpa Sathyanarayanan, for R-27 to R-30 No Appearance : R-4, R-5, R-9, R-10 and R.21 https://hcservices.ecourts.gov.in/hcservices/ C O M M O N J U D G M E N T The plaintiff and the seventh defendant, being aggrieved by the judgment and decree, dated 30.09.1997, passed in O.S.No.1101 of 1987 on the file of the Subordinate Court, Coimbatore, have filed A.S.Nos.332 of 1999 and 281 of 2000, respectively. 2. For the sake of convenience, the parties to the appeals are referred to as per their ranking in the suit. 3. The case of the plaintiff in O.S.No.1101 of 1987 is as follows:- Late Rangasamy, Kumarasamy, the first defendant and K.Chinnasamy, the fourth defendant are the sons of late Kandasamy Gounder. They constituted a Hindu Joint Family which possessed ancestral properties, which are shown as Item Nos.1 and 2 of plaint Schedule 'A'. Inspite of a Deed of Partition, the brothers continued to live jointly and carried on business jointly, led by elder brother Rangasamy, the brothers jointly ventured into several businesses like running a rice mill, match factory, sizing unit, power looms etc., the brothers were also carrying on business in timber and had taken coup contracts. The ancestral lands and enormous income there from contributed the capital and nucleus for the aforesaid businesses. From the income and profits derived by joint exertion from the aforesaid businesses and ancestral properties, numerous investments were made and several properties were acquired in Karumathampatti, Poomalur, Samalapuram, Veerakeralam, Coimbatore, Coonoor and other places by the family. In 1954, the brothers, purchased a rice mill named and known as 'Lakshmi Rice Mills', which was subsequently named as 'Lakshmi Rice Mills and Match Factory'. The premises was ultimately converted into a Spinning Mills (now known as Swamy Textiles) in the year 1977, which property is shown as Item No.1 in Schedule 'B'. Item No.2 in Schedule 'B' was purchased by the brothers from the joint income in the year 1958 in the name of all the three brothers. Item No.3 of Schedule 'B' was purchased in 1962- 1963 in the name of all the brothers from the joint family income. In 1963 a site was purchased and a palatial construction was put up wherein the brothers continued to live jointly from 1964 and the same is shown as Item No.4 of Schedule 'B'. 4. The eldest brother Rangasamy was the President of Karumathampatti Town Panchayat for ten years and Chairman of Sulur Panchayat Union for five years. He was a successful businessman. He was killed in a motor accident on 27.05.1967, when he was only 44 years, leaving behind a widow, the seventh defendant. The seventh defendant was not much educated beyond the school level. The plaintiff and the tenth defendant are the sons of Rangasamy and the seventh defendant. The eighth defendant is their daughter. At the time of the death of Rangasamy, the plaintiff was aged about 11 years and studying in school and the tenth defendant who was then aged 19 years was was undergoing training at National Defence Academy at Kadakavalsa at Pune. All the properties, assets and businesses came into the hands of the first defendant. The heirs of late Rangasamy https://hcservices.ecourts.gov.in/hcservices/ left themselves and their properties under control and protection of the first defendant in utmost faith, reposing trust and confidence in him. The plaintiff looked upon the first defendant as their protector and guardian and obeyed his instructions and directions without any question or demur. A sum of Rs.1,00,000/- received from the Life Insurance Corporation on the demise of Rangasamy was handed over to the first defendant which was also ploughed into the assets and business of the family. The said amount was mainly responsible in the growth and development of the business and the properties. In 1968, the plaintiff took up an LIC Policy for Rs.25,000/- wherein he has designated the first defendant as the nominee. The seventh defendant was taken as a partner in the place of Rangasamy. 5. In 1969, a land was purchased and a factory was put up wherein a sizing unit in the name of 'Sri Ranga Vilas Warping and Sizing Factory' is functioning, which is shown as Item No.5 of Schedule 'B'. In 1972, a Tea Estate popularly known as 'High Field Estate' in the name of defendants 1, 4, 10 and plaintiff was purchased and the same is shown as Item No.6 of Schedule 'B'. A private limited company, known as Swamy and Swamy Plantations (P) Ltd., was promoted and the company purchased Spring Field Estate and High Field Tea Factory. The share holdings in the company are shown as Item No.7 of Schedule 'B'. In 1975, 50 acres of lands were purchased in Vedapatti Village, in Coimbatore, in the names of defendants 1, 4 and plaintiff which is shown as Item No.8 of Schedule 'B'. In 1975-1976, about 6 acres of agricultural lands were purchased in Samalpuram Village in the name of the second defendant out of the joint family funds, which is shown as Item No.9 of Schedule 'B'. In 1978, a palatial bungalow was purchased in Tatabad, Coimbatore, which is shown as Item No.10 of Schedule 'B' and the same was acquired with the funds of joint family and for the benefit of the family. 6. All the aforesaid acquisitions and businesses continued to be under the dominant control of the first defendant. The tenth defendant was unable to get a transfer from Kashmir and he resigned from the defence services only on the advice of the first defendant. In 1973, he was married at Muthugoundanpudur. The plaintiff completed graduation in 1979 and came and settled down at Coimbatore. The plaintiff and the tenth defendant were living under the shelter and domination of the first defendant. The plaintiff had utmost trust and confidence on the first defendant and hence he obeyed all his decisions and directions. The first defendant used to take the signatures of the plaintiff in several documents, blank papers and blank stamp papers under the pretext and representations that they are required for tax purposes and for administrations of the properties and several partnership firms which are constituted for the purpose of tax concessions and benefits. The partnership firms were only intended for tax benefits and concessions and there is no change either in the attitude and intentions of parties, who continued to live jointly treating all the properties, assets and businesses as joint family property. 7. The first defendant with an enormous cash and resources on hand took over sick units to revive them and took advantage on the taxation side. Sri Vasudeva Industries Limited was one such unit, https://hcservices.ecourts.gov.in/hcservices/ which had never seen a bright day nor made profits at any time from its inception. The said Industry went into liquidation in 1967. The first defendant took it on lease from the Official Liquidator of Madras High Court and he managed to acquire a seizable shares which are worthless and redeemed the company from liquidation by siphoning the family funds. The name of the company was changed to 'Sri Vasudeva Textiles Limited' in 1984. The company continued to work only on loss. The shares of the company are worthless. In 1973, the first defendant moved to Coimbatore from Somanur for the purpose of educating his children and moved into Item No.10 of Schedule 'B' in 1978. The fourth defendant continued to live in Somanur house. The plaintiff and the tenth defendant began to live in a rented house in Saibaba Colony in 1984. As the first defendant never denied the plaintiff's right to 1/3rd share in all the properties, assets, income and business of the family, he did not suspect him. The plaintiff was always treated and recognised as co-owners and they are in joint possession of the properties. 8. In 1983, the first defendant arranged to secure a loan from Punjab National Bank for 'Sri Vasudeva Industries Limited'. The defendants 1 and 4 and the plaintiff and the tenth defendant were the Directors on the Board of the Company. At the directions of the first defendant, the plaintiff and the tenth defendant signed the documents of personal guarantee to the Punjab National Bank in 1983. The entire administration and management of Sri Vasudeva Industries Limited continued to be in the hands of the first defendant, though the proceedings are shown to be at the instance of the Managing Directors. 9. In the beginning of 1984, the first defendant represented that since the plaintiff and the tenth defendant have given personal guarantee to the Bank for the loans of several lakhs, it would be risky and not expedient to have the family properties in the names of the plaintiff and the tenth defendant and it would be advantageous and safe to keep off the names of the plaintiff and the tenth defendant on records as owners. Thereagain, they did not question the direction and wisdom of the first defendant. The first defendant represented that the entire family properties would be kept in the name of defendants 1 and 4 for the purpose of record and to avoid the risk of any bank claim and he assured that this arrangement would not affect or extinguish the legitimate share of the plaintiff and the tenth defendant in the properties. The first defendant arranged to file a suit in Sub Court, Coimbatore, through the family lawyer. It was a collusive suit and a mere make believe affair. There was no misunderstanding or provocation for any one of the members of the family to go to a court of law for partition. 10. The suit in O.S.No.37 of 1984 on the file of the Sub Court, Coimbatore, was filed by the sixth defendant, who is the son of the fourth defendant. He was aged 21 years and he was a bachelor and was a college student at Madras. He sought for partition of joint family properties. The plaint was infact prepared at the instances and instructions of the first defendant. Even the schedule of properties were not complete. The plaintiff and the tenth defendant did not go to any lawyer nor took step to assert their claim for partition and they did not file any written statement in that case. The first https://hcservices.ecourts.gov.in/hcservices/ defendant, represented that O.S.No.37 of 1984 is intended only to preserve and safeguard the family properties from any possible risk or danger from the claims of the creditors of a defunct and sick textile unit. 11. On 06.08.1984, the first defendant took the plaintiff to the Court, his signature was taken and made to stand before the Presiding Officer and say that he is accepting the contents of the compromise petition. The plaintiff obeyed the directions of the first defendant, but he had not gone to any lawyer independently nor gave any instructions to represent him in the above suit. The plaintiff learnt that lawyers of the same office have signed and filed a compromise petition into court and secured a decree thereon on 06.08.1984. The entire proceedings in O.S.No.37 of 1984 was a collusive one and the entire proceedings is a make believe affairs. The first defendant has abused the process of the Court. The entire proceedings and the decree secured from the court is a fraud played not only on the plaintiff, but also against the Court. The decree is void as per Section 44 of the Evidence Act also. The plaintiff never even thought of relinquishing or giving up his rights in valuable properties. The so called decree obtained from the court confers only the worthless shares in a defunct company which had not seen any profit ever since its inception. Inspite of the so called decree and compromise all the properties, assets, investments and business continued to be in the hands of the first defendant. The compromise decree which was intended only to secure and safeguard the properties is sham and nominal besides being fraudulent. There is a change in the attitude of the first defendant, who is giving a go by to this assurance and want to press the compromise decree against the plaintiff to deprive his legitimate share in the estate. The illegal and irregular nature of transactions can be assessed from the fact that the family members who did not have any share in the property were allotted properties and that too disproportionately by allotting negligible and useless shares to the plaintiff's mother who was a sharer and allotting substantial immovable properties to defendants 2 and 5 who were not even sharers. 12. The plaintiff has come to know recently that some alienations have taken place with regard to the portions of joint family properties at the instance of the first defendant and the same are not strictly binding on the plaintiff and hence the plaintiff is seeking for relief of accounting in respect of the alienation. The first defendant is refusing to give proper accounts. There is vast disparity in the value allotted to each group and no member in his sense would have accepted. A perusal of the extent of properties allotted to each branch of the joint family will show huge disparity in the allotment. The plaintiff's group is allotted no shares in immovable properties and only shares in the sick / public limited company, which are unmarketable alone have been allotted to them. The disparity in value is so great and the division is so unfair on the face of it and that the decree could not have been a real transaction seriously intended to be operative. The compromise decree came into existence on account of collusion on suggestion by the first defendant. Hence the plaintiff is obliged to come forward with this suit claiming a partition in respect of the entire suit properties into three equal shares and for allotment of one such https://hcservices.ecourts.gov.in/hcservices/ share. 13. Late Rangasamy was entitled to an 1/3rd share in the entire properties, in which the plaintiff is entitled to 1/9th share. The remaining 1/9th share of late Rangasamy has devolved on the plaintiff, their mother and sister. The remaining 2/9th share has devolved on the tenth defendant, seventh defendant and the eighth defendant. The mother and sister of the plaintiff have expressed their desire not to take any share. Hence the plaintiff is entitled to 1/3rd share. The plaintiff is seeking for dividing the entire suit properties into three equal shares and for allotment of one such share to the plaintiff and the tenth defendant. The plaintiff is also seeking a declaration that the decree passed in O.S.No.1101 of 1987 on the file of the Sub Court, Coimbatore, is ultra vires, collusive, invalid, unsustainable and unenforceable. 14. As per the orders passed in I.A.No.191 of 1991, the ninth defendant, who was the party in O.S.No.34 of 1984, has been impleaded as a party to the suit. As I.A.Nos.129 and 214 of 1996 filed by the defendants were allowed, the defendants 11 to 26 have been impleaded as defendants in the suit in order to have an effective adjudication of the disputes involved in the suit, though strictly speaking they are not necessary parties. 15. It is false to state that the impugned decree was acted upon. It was only the first defendant, who was dealing with the shares alleged to have been allotted to the plaintiff and his branch even after the so called alleged partition. The plaintiff has included shares allotted to the first defendant also in compliance with the directions of the High Court. On account of some bonus shares issued and alienation effected by some of the defendants the share holding pattern has undergone a change and the share holding position as on date have been separately furnished by defendants 1 to 3 in Item No.13. The Wealth Tax Returns for the years 1983-84, 1984- 85 and 1985-86 show that the shares held by the plaintiff and the tenth defendant in M/s. Sri Vasudeva Textiles Limited has no value whatsoever and the said Wealth Tax Returns has been accepted by the Wealth Tax Department. 16. Recently the plaintiff's elder brother, Sri S.R.Shanmuga Velayudham has entered into some sort of arrangements with the first defendant and therefore he is no longer interested in the suit and hence he has been transposed as tenth defendant, as per the orders passed in I.A.No.89 of 1993. Pending the suit, defendants 1 and 2 have effected certain alienations, which are shown as Item No.6 (a). The aforesaid alienations are hit by doctrine of lispendense. 17. On the aforesaid pleadings, the plaintiff sought for the following reliefs:- (a) Declaring that the decree passed in O.S.No.37 of 1984 on the file of the Sub Court, Coimbatore, is sham and nominal, ultravires, collusive, unsustainable, invalid, unenforceable and not binding on the plaintiffs. (b) Granting a decree for division of the entire schedule https://hcservices.ecourts.gov.in/hcservices/ mentioned properties by dividing the suit properties into three equal shares and allotting one such share to the plaintiff. (c) Directing the first defendant or such of those defendants who are found liable to furnish true and proper accounts to the plaintiff with regard to the income from the joint family properties and ascertain the amount payable to the plaintiff. 18. As the plaint underwent number of amendments, the defendants 1 to 3, besides filing a written statement, have also filed additional written statements, inter-alia contending as follows:- The suit is false, frivolous, vexatious and unsustainable both in law and on the facts. The allegations in paragraph 3 of the plaint are not true and correct. Only till 1960, Late Rangasamy, the first defendant and the fourth defendant were members of a joint family. Even when they were members of a joint family and even during the life time of their father Kandaswami Gounder, the three brothers had begun to do business in partnership and had also acquired properties jointly. On 07.11.1960 the three brothers became divided from one another by a registered deed of partition in and by which they divided all their family properties, but they continued to do business in partnership as before. Thus from and after 1960 they were not members of the joint family, but only partners. All acquisitions subsequent to the date were acquired by them only as co- owners and not as members of a joint family. 19. The allegations in paragraph 4 to 4 (d) of the plaint are not wholly correct. The properties were purchased in the names of all the three brothers, but it is not correct to state that they lived jointly from the year 1964. 20. The allegations in paragraph 5 of the plaint are not correct. All the three brothers took an equal part in the conduct of the business. The allegation that on the death of Rangaswami all the properties, assets and businesses came into the hands of the first defendant is untrue. It is also not true to state that the heirs of the late Rangaswami left themselves and their properties under the control and protection of the first defendant and they obeyed the instructions of the first defendant without question or demur. The plaintiff's mother though not well educated is a capable lady and she was taken in as a partner in the business. It is incorrect to state that the Life Insurance amount was handed over to the first defendant, but the amount was credited in the name of the seventh defendant in the firm. The allegation that the said amount was mainly responsible for the growth and development of the business is not true and not correct. 21. The allegations in paragraph 6 of the plaint are not wholly true. Item No.10 of Schedule 'B' was purchased by the first defendant in an auction and the amount necessary for payment of the price was drawn by the first defendant from Swamy & Company and the amount was debited against him in the accounts of Swamy & Company. https://hcservices.ecourts.gov.in/hcservices/ The building is not a palatial building. The first defendant has made additions and improvements after the purchase. The first defendant was contesting all legal proceedings for his own properties. The said property, being a separate property of the first defendant, nobodyelse has got any share. 22. The allegations in paragraph 7 of the plaint are denied. The fourth defendant was in management of the business in Somanur. It is false to suggest that the first plaintiff resigned from the Defence Services on the first defendant's advice. It was only at the instance of the seventh defendant, he resigned his job.