* IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on February 19, 2008 Pronounced on April 07,2008 + IA No.1604/1999 in CS(OS) 2167/1993 SH. AJIT SINGH ..... Plaintiff Through Mr. Madan Bhatia, Sr. Advocate with Mr. M.L.Bhargava, Advocate versus SMT.ADARSH KAUR GILL ..... Defendant Through Mr. C.A.Sundaram, Sr. Advocate with Ms. Malavika Rajkotia and Mr. Bandan Kumar, Advocates Coram: Mr. Justice S. Ravindra Bhat 1. Whether reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes Mr. Justice S. Ravindra Bhat: 1. This order will dispose off IA No. 1604/99 moved under Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereafter “the CPC”) through which the Defendants seek an order rejecting the plaint. The defendant has sought for rejection of this suit on the ground CS(OS) 2167/1993 page No.1 of 23 that it is barred in law, as the claims are time barred. 2. The plaintiff, in the present suit, has sought the following reliefs: a) Pass a preliminary decree of partition of the property bearing No.3, south end Road, New Delhi, more particularly shown ion the plan, and, thereafter, pass a final decree partitioning the said property by mete and bounds and put each of the parties to the suit in actual physical possession of the portion of the property allotted to him/her. If the partition of the property by metes and bounds is not feasible, then the property by metes and bounds is not feasible, then the property may ordered to be sold by public auction through Court and proceeds thereof be divided between the parties to the suit in accordance with their share and entitlement; b) Pass a preliminary decree for partition of the movable assets belonging to the estate of Smt. Abnash Kaur, as mentioned in the Schedule to the plaint and, thereafter, pass a final decree and give to each of the party to the suit his/her share of the said property. In case it is not feasible to distribute the movable assets belonging to the estate of Smt. Abnash Kaur in the in the hands of defendants Nos.1 & 2 to each of the beneficiaries, as per the share and entitlement, then the said movable assets may be ordered to be sold by public auction through this Hon’ble Court and the proceeds thereto may be divided amongst the parties, as per their share and entitlement; c) Pass a decree for rendition of accounts and enquiry into the same with respect to the rental income of the property received by defendant NO.1 from the tenant of property bearing No.3, south End Road, New Delhi, w.e.f. 1.1.1980 to 30.11.1990; d) Pass a decree for rendition of accounts and enquiry into the same with respect to the profits made by defendant Nos. 1 & 2 from the business which they have been carrying on by investing the funds from the estate of Smt. Abnash Kaur; e) Pass a decree for declaration that there has been no lease deed executed by Smt. Abnash Kaur in favour of Defendant No.1 and that defendant No.1 is not a lessee in the property, 3, South End Road, New Delhi, and she is not entitled to give the said property to any person on sub-lease basis; CS(OS) 2167/1993 page No.2 of 23 f) Pass a decree of declaration to the effect that defendant No.1 is not a subrogatee of the mortgage deeds executed by late Smt. Abnash Kaur with respect to the property in favour of Smt. Sushila Daphtary and her son Mr. Anil Daphtary said mortgage deeds have been redeemed out of the estate left by Smt. Abnash Kaur. g) Pass a decree of declaration to the effect that defendants Nos.1 & 2 have dis-entitled themselves form getting any share in the estate left by Smt. Abnash Kaur and tthat the plaintiff and defendants No.3, 4 and 5 are the only befeficiaries under the Will of Smt. Abnash Kaur and are entitled to get the entire estate left by Smt. Abnash Kaur divided and partitioned in four equal shares; h) Pass a decree for permanent injunction against Defendant No.1 restraining her permanently from transferring, alienating, letting out or parting with the possession of the property, 3 South End Road, New Delhi, or any part thereof and from making any additions and alterations in the same in any manner whatsoever. i) Any relief which this Hon’ble Court may deem fit and proper in the circumstances of the case may also be granted to the plaintiff and other beneficiaries under the Will of Smt. Abnash Kaur.” 3. The plaint may be summarized as follows. One Ms. Abnash Kaur was the Plaintiff’s elder sister, as also of the first and third Defendants, mother of the fifth defendant and the aunt of the second and fourth defendant. She was married to one Mr. Shiva Prasad, who had, it is averred, given cash running into several lakhs of rupees and jewellery as gifts, in addition to the amount paid by him for running the household. It is submitted that he transferred the shares in Lord Krishna Mills Ltd. in her name as consideration for the marriage. It is also averred that out of the said amounts she purchased property No. 3, South End Road, New Delhi in 1956 for a total consideration of Rs. 2, 50, 000 and the sale deed was duly registered. CS(OS) 2167/1993 page No.3 of 23 The present suit is being filed in relation to this property. 4. It is averred that Smt. Abnash Kaur was in exclusive possession of the said property and was residing therein, until it was handed over to the Vietnam Embassy on rental basis in the name of her sister-the first Defendant. A part of the property was also rented out to Lord Krishna Sugar Mills Ltd. in the year 1956. In the year Mr. Shiva Prasad passed away leaving behind Abnash Kaur, the fifth Defendant - her minor son, and seven sons from the first marriage as his only heirs. It is also alleged that the sons from the first marriage fraudulently obtained her signatures, came into complete control of the Mill and misappropriated huge sums of money. She informed them that she would not tolerate the mismanagement of funds, objected to the HUF status given to the estate of the deceased and threatened legal action for winding up the company. She also informed them that along with her son and the step sons she would have claim to the property and each of the nine people were entitled to 1/9th share in the property. 5. It is also averred that when she refused to stand guarantee for the company, being one its directors, Mr. Seth Bimal Pershad and his brothers (her stepsons) tried to pacify her by assuring her that the company would be managed by a committee of which she would be a part and no decision would be taken without consulting her. They also clarified that they had fraudulently obtained her signatures to ensure that no estate duty was to be paid on the their father’s estate, and that they were aware that she was the exclusive owner of the of the said CS(OS) 2167/1993 page No.4 of 23 property in South end Road as well as precious jewellery and other amounts lying in the bank accounts and lockers. Through a letter dated 14th April 1958 it was also agreed that all of them were entitled to 1/9th share in the deceased’s property, pursuant to which Ms. Abnash Kaur signed the bank guarantee required by the bankers of the company. 6. It is submitted that after the death of Seth Bimal Pershad in 1959, his brothers did not adhere to the aforesaid arrangement and continued to embezzle the Company's funds, using various devices. When Abnash Kaur threatened to initiate winding up proceedings and take legal steps to protect her, and her son’s interest in the estate, they retaliated by threatening her to initiate proceedings claiming the existence of a “Seth Shiv Prasad HUF”, which included the properties exclusively owned by Abnash Kaur. To meet legal and other expenses, she decided to construct a floor on the aforesaid property and for financing the same, she mortgaged the said property in favour of Sushila Daphtary and Anil Daphtary, by mortgage deeds dated 19.1.1959 and 24.2.1959, for a sum of Rs. 1, 98, 000. At the time of the said mortgage she was residing in the property along with her son and other family members. The said property along with the additional construction, the furniture and other household items were insured by Abnash Kaur for a total value of Rs. 2, 50, 00 for a year. This insurance policy also noted that the she was in exclusive possession of the said property in November 1959. CS(OS) 2167/1993 page No.5 of 23 7. It is submitted that while Ms. Abnash Kaur was contemplating seeking permission from various authorities, to construct the first floor. After having obtained the necessary finances, on 11th July 1960 officials from the Recovery Department of the District Collection Officer, Delhi visited the property for attaching it towards the recovery on Income Tax amounting to Rs. 23, 37, 547.45 from the alleged Seth Shiv Prasad HUF. In order to overcome the situation it was agreed by Abnash Kaur, the first and third Defendants, in the presence of lawyers, that the said property would be shown as being let out to the two aforesaid defendants with a right to sub-let the same. Later, it was decided that the lease would be in favour of the first defendant only. Cash and jewellery were also similarly entrusted to the first Defendant. It is admitted by the Plaintiff that no lease deed was filed as part of the objection before the District Collection Officer nor were any placed before the Income Tax Officer at Meerut. 8. Abnash Kaur received a notice whereby her step sons alleged that the said property belonged to the pool of properties in the HUF and objected to her mortgaging it. Perturbed by the notice she filed a winding up Petition in relation to the company which was contested by her step sons. It is submitted that the property was given on a leave and license basis to the Vietnam Embassy on behalf of Abnash Kaur by the first Defendant. In order to overcome the legal hurdles, she was advised to make the said lease in favour of the first Defendant on a stamp paper prior to 1959 was which was accordingly procured and the leased deed prepared. CS(OS) 2167/1993 page No.6 of 23 The Plaintiff also submits that the lease deed in favour of the first Defendant was a sham and was done only to overcome the attachment of the said property and the movables in it. This deed, it is submitted, remained in the possession of Abnash Kaur and the possession of the said property also was never transferred to the first defendant. It is also averred that Ms. Abnash Kaur had been receiving the rent from the Vietnam Embassy. At the time of the lease it was also agreed in writing by the first Defendant that she would never lay a claim to the said property and that she would never deal with property in any manner without the leave of Abnash Kaur. Meanwhile, several rounds of litigation were going between the Abnash Kaur and step sons in relation to the said property. 9. It is also submitted that the Ms. Abnash Kaur entered into an agreement in 1963 for sale of the said property to Jaswant Rai for a consideration of Rs.9,35,000/-. It was disclosed to the purchaser that there was sham lease deed in respect of the property and that the property was also mortgaged. In 1963, the mortgagees filed a suit in which a compromise decree was passed, and the mortgage redeemed in favor of the first Defendant. This was done to increase the charge of the first Defendant on the property, since the allegedly fake lease deed was still valid, and this was necessary in order to thwart the claims in the suits pending between the step sons and Abnash Kaur. The property was later leased out to the Embassy of the German Democratic Republic. 10. The Plaintiff also mentions instances of various Income Tax Returns filed by the first CS(OS) 2167/1993 page No.7 of 23 Defendant and Abnash Kaur to submit that rent from the said property was being given to Abnash Kaur and not to the first Defendant. Reliance was also placed on the records submitted during the various rounds of litigation between Abnash Kaur and her step sons. It is also submitted that the Plaintiff acted as the first Defendant’s General Power of Attorney in collecting rents from the Embassy of the GDR and especially when the first Defendant had been abroad to settle differences with her husband. Further, it is submitted that the first Defendant never claimed the rents from the property since she knew that the entire lease deed was sham. 11. While drawing up her will on 6th February 1993, Abnash Kaur was advised not to disclose the investments made by her in the name of the first Defendant. It is submitted, that she was further advised to write, in her will about a lease agreement between herself and the first Defendant in relation to the said property. The will was also signed by the first Defendant among others, wherein they undertook that all assets movable and immovable belonged to Abnash Kaur and they would not be entitled to any share as a beneficiaries, in the event anyone claimed ownership of the assets. It is submitted that since the Plaintiff was familiar with the aforesaid arrangement and had been looking after the estate of Abnash Kaur he was named the administrator and executor of the will. It is further submitted that the first Defendant conspired with the advocate of Abnash Kaur to claim that she was the subrogatee in terms of the compromise decree passed in the suit filed by the mortgagees and that the CS(OS) 2167/1993 page No.8 of 23 lease deed was in fact a valid one, whereas the property was redeemed in the name of the first Defendant in order to avoid complications in proceedings filed by the step sons (of Abnash Kaur) which were pending at the time of the compromise. It is also submitted that the payment made to the mortgagees were in fact from the estate of Abnash Kaur. The Plaintiff further avers that the Will, and other documents are in the possession of the advocate of Abnash Kaur, Mr. GC Mittal and that he was unwilling to return them. However, the Plaintiff served a notice to Mr. Mittal after coming to know that he and the first Defendant had received huge sums of money from the Embassy of GDR in lieu of compensation for the said property. After coming to know that the leave and license agreement in favour of the GDR embassy was renewed, the Plaintiff served a notice on the first Defendant as well as the Embassy authorities that under the Will of Abnash Kaur there were six beneficiaries and that he was entitled to recover all profits on account of his being the administrator and executor of the will. Further, he also notified the embassy that the first defendant being a non resident Indian no property could be leased out by her. Through the notice, the first Defendant was asked to render accounts of the amounts received by her and to desist from entering into fresh agreement in relation to the said property. A copy of the said notice was also served on the other defendants. It is submitted that the Embassy, disregarding the aforesaid notice, further renewed the leave and license agreement. The plaintiff also points out to the affidavit filed by him and the fifth Defendant in Suit No. 2084/1980 disclosing the actual state of affairs in CS(OS) 2167/1993 page No.9 of 23 relation to the said property and the benamidar status of the first defendant. 12. It is averred that in September 1980 the plaintiff, as the administrator and executor of the will, had made relevant disclosure under the Amnesty Scheme before the Income Tax Commissioner, Delhi disclosing the facts in order to save income accruing from Abnash Kaur’s estates. He also disclosed the transactions entered into between the first Defendant and the Embassy. In the appeals preferred against the order of the ITO concerning the above disclosure, the Plaintiff submitted the list of jewellery which belonged to Abnash Kaur and also alleged that the first Defendant had made insufficient disclosure in this regard while filing her wealth tax returns. He further alleged that all businesses started by the first Defendant in India and abroad were from the funds of the estate of Abnash Kaur and that it was evident from the income tax returns filed by the first Defendant during the period 1966- 1979 that she had no wealth whatsoever in her hands in the form of cash or any other property. The Income Tax authorities, pursuant to these applications ordered a investigation. 13. It is also submitted that due to the legal hassles created for the first Defendant and other interested parties including the Plaintiff, in February 1991 the Plaintiff and the first defendant agreed to settle the disputes. The terms for settlement allegedly given by the first Defendant are reproduced in the suit; they are as follows : "a ) All the beneficiaries should agree that there is no dispute about the rental income of the properlty 3 South End road, New Delhi, upto December 1979, as the entire rental income was received by Smt. Abnash Kaur in my CS(OS) 2167/1993 page No.10 of 23 name, either through me or through you, on the basis of the General Power of Attorney executed by me in your favour on the asking of Smt. Abnash Kaur, through Smt. Abnash Kaur had been showing the said rental income in my income tax and wealth tax returns. b) I have received the rental incoem of South End Road with effect from 1.1.1980 to 31.10.1990 and I agree to render the account of the same. I also agree to pay due share to all the beneficiaries of the said rental income. The rental income will be calculated on the basis of the agreements executed between me and the G.D.R. Embassy for the abovesaid period. I shall produce the said agreements for calculating the rental income. The amounts paid by me to the Income Tax Department after the death of Smt. Abnash Kaur, on the rental incoem of 3 South End road, which has been shown either in my income tax returns or in the wealth tax returns, shall be deducted from the rent received by me with effect from 1.1.1980; c ) I will not claim any charge on the property 3 South End Road for the two mortgages redeemed in my name from Smt. Shushila Daphtary and Mr. Anil Daphtary, as the amounts paid for redeeming the said mortgages were paid from the estate of Smt. Abnash Kaur. d ) The possession of property 3 South End Road has been taken by me from the G.D.R. Embassy on 1st November, 1990. I will continue to stay in the property upto 30th November, 1992, as I have to alternative arrangements for residence as per my requirements and thereafter I will surrender the possession of the property to you for effecting partition. I will not encumber or part with the possession of the property to any body in any manner nor I will rent out the property in part of whole to any other person. I will not encumber or part with the possession of the property to any body in any manner, nor I will rent out the property in part or whole to any other person. I will not claim any tenancy right or charge in the said property, either on the basis of the clause in the Will of Smt. Abnash Kaur or on the basis of the stand taken by me or by Smt. Abnash Kaur or by any beneficiary in any proceedings in the Courts or before the Income Tax authorities or any other authority to the effect that there was a lease in my favour with respect to the property 3 South End Road, as the said stand was taken by Smt. Abnash Kaur and by all of us in order to save her property and its income from the false claim of the steps sons of Smt. Abnash Kaur. e) A part of the jewellary declare by Smt. Abnash Kaur in her wealth tax CS(OS) 2167/1993 page No.11 of 23 retuns is with me, out of which I have declared some jewllary in my wealth tax returns under the Amensty Scheme. I will hand over to you all the said Jewellary for distribution amongst all the beneficiaries; f) The above mentioned offer is being made by me subject to the following conditions : i) That one of the beneficiaries, including you, would lay a claim or file any litigation for the share in any of the assets acquired by me in my name or in the names of the companies or in the names of my nominees or in the income of my business in India and abroad, which is as floated by me out of the estate of Smt. Abnash Kaur in my hands. (ii) That you or any other beneficiary will not pursue the complaint filed by you against me with the Income Tax Department. I am giving this offer in the light of the discussion which we held and in view of the serious consequences which may result if the complaint filed by you before the Income Tax Authorities is further pursued. The final settlement on the basis of the terms suggested will also avoid the litigation amongst the beneficiaries if the matter is amicably settled as it will save the estate of Late Smt. Abnash Kaur from heavy tax liabilities, penalties and payment of interest and will also save both of us from serious consequences. If other beneficiaries are agreeable to these terms, you may work out the scheme to partition the estate of Smt. Abnash Kaur amongst all the beneficiaries and arrange a meeting for finalizing the settlement once for all. I am giving this offer on my behalf as well as on behalf of Nina and Venu" 14. It is submitted, that in March 1992 the Plaintiff was surprised to find fresh ongoing construction on the property. He was informed that in 1990 the Embassy had vacated the premises and that first Defendant was occupying it since then. He submits that under the conditions of the settlement, the first Defendant was to hand over possession of the property by November 30th 1992. He also alleges that alterations were being made to the property CS(OS) 2167/1993 page No.12 of 23 with malafide intention and that the first Defendant had invested profits earned from the said property in her business abroad and has made huge profits. But being aware of the attitude of the first Defendant, the Plaintiff decided to file a suit which was delayed due to his ill health and finally the present suit came to be filed. 15. The first Defendant contends that suit is not maintainable. She does not dispute the following facts; that there was a duly registered will dated 8.2.1973 with six beneficiaries; the said will related to assets of the late Smt. Abnash Kaur, which were self-acquired and not part of the Seth Shiv Prasad HUF; there was a lease deed dated 18.11.1958 executed in favour of the first Defendant by late Smt. Abnash Kaur, for the said property under and by virtue of which