Pares Nath Thakur vs Smt. Mohani Dasi And Others

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 655 of 1957

Decision Date: 12 May 1959

Coram: Bhuvneshwar P. Sinha, P.B. Gajendragadkar, K.N. Wanchoo

In the matter of Pares Nath Thakur versus Smt Mohani Dasi and others, the judgment was delivered on 12 May 1959 by the Supreme Court of India. The bench that heard the appeal consisted of Justice Bhuvneshwar P. Sinha, Justice P. B. Gajendragadkar and Justice K. N. Wanchoo. The petitioner was Pares Nath Thakur and the respondents were Smt Mohani Dasi together with other parties. The case is reported in 1959 AIR 1204 and in the 1960 Supreme Court Reports (1) 271.

The respondents, who were the plaintiffs in the original suit, filed the suit under Order 21, rule 63 of the Code of Civil Procedure seeking a declaration that the deed of trust executed in favour of the appellant deity was a sham and a fictitious document. They also prayed that the properties covered by that deed be sold in execution of a decree that had been obtained against the defendants numbered two to four. The trial courts dismissed the suit, but the Orissa High Court set aside the findings of the lower courts, held the deed to be fictitious and decreed in favour of the respondents. The High Court was criticised for placing the burden of proving title on the deity rather than on the plaintiff.

The Supreme Court held that the question of whether a trust deed is fictitious is essentially a question of fact. The Court referred to the decision in Meenakshi Mills, Madurai v. The Commissioner of Income-tax, Madras [1956] S.C.R. 691 to support this view. It was also observed that a long line of decisions of the Privy Council and of this Court has settled that a High Court, in a second appeal, cannot disturb findings of fact arrived at by the courts below, even if those findings appear to be erroneous. Even assuming the High Court could review those findings, the Court found that the High Court had misdirected itself regarding the allocation of the onus of proof.

In a suit of this nature, where the plaintiff seeks a declaration that a solemnly executed and registered document is fictitious, the heavy burden of proof lies upon the plaintiff. That burden becomes still heavier when the plaintiff also seeks to overturn an earlier order passed under Order 21, rule 60 of the Code of Civil Procedure, which had upheld the claim of a third party. The Court therefore reaffirmed that the plaintiff must establish the falsity of the deed beyond doubt.

The appeal before the Supreme Court was Civil Appeal No. 655 of 1957, taken by special leave from the judgment and decree dated 22 April 1954 of the Orissa High Court in Second Appeal No. 174 of 1948. That High Court judgment arose from the judgment and decree dated 12 January 1948 of the District Judge, Cuttack, in Munsif Appeal No. 309 of 1946, which itself was against the judgment and decree of the second Munsif, Cuttack, dated 31 August 1946 in Title Suit No. 120 of 1943. Counsel appearing for the appellant were A. V. Viswanatha Sastri and B. P. Maheshwari, while counsel for the respondents numbered two and three were S. P. Sinha and R. Patnaik.

The appeal, granted by special leave, challenged the judgment and decree dated 27 April 1954 issued by the Orissa High Court on a second appeal. That judgment had overturned the earlier decisions of the lower courts and had dismissed the suit filed by the respondents under rule 63 of Order 21 of the Code of Civil Procedure, hereafter referred to as “the Code”. The respondents’ suit sought a declaration that the deed of trust dated 15 December 1926, executed in favour of the first defendant, Pares Nath Thakur, and placed in the Digamber Jain Temple at Cuttack, was a sham and fraudulent instrument that was never intended to be acted upon. The suit further alleged that the properties described in that deed actually belonged to defendants 2, 3 and 4 and should be subject to sale in execution of a decree obtained by the plaintiffs against those second-party defendants. The first defendant, being a deity, was sued in his capacity as trustee under the guardianship of the appointed trustees. For the purpose of this appellate review, the material facts leading to the present appeal are summarized as follows: the plaintiffs were assignees of the mortgagee’s interest in a simple mortgage bond dated 14 April 1927, which had been executed by the predecessors-in-interest of the second-party defendants. The mortgagees had instituted a suit before the Subordinate Judge at Cuttack to enforce the mortgage, obtaining a preliminary decree on 11 June 1935, which later became final on 13 October 1936. Subsequently, the mortgaged properties were sold to the decree-holders; however, the proceeds did not satisfy the amount due under the decree, leading to a money decree against defendants 2-4 for a sum of approximately Rs 11,000 on 29 April 1940. The disputed properties covered by the deed of trust had earlier been attached on 23 September 1934. When the decree-holder pursued the properties covered by the deed, the first defendant, through his trustees, asserted a claim to those properties under rule 63 of Order 21 of the Code, contending that the properties belonged to the deity and not to the judgment-debtors. After conducting an inquiry under the Code, the executing court ruled in favour of the claimant, prompting the plaintiffs to commence the present suit under rule 63 of Order 21, asserting that the trust deed was a fraudulent transaction that conveyed no title to the properties in question.

In the findings of the courts of fact, it was held that an idol actually existed and that the deed of dedication transferred the title of the property from the donors to the donee. The donors, who were the predecessors-in-title of the second defendant, were consequently found to have completely divested themselves of any interest in the properties that formed the subject-matter of the deed of trust. The courts also concluded that the disputed properties did not belong to the family of the mortgagors and that the deed of trust had been executed solely for the purpose of placing the title to the property beyond any doubt or dispute. After being unsuccessful in the first two courts, the plaintiffs appealed to the High Court of Judicature at Cuttack. That appeal was heard by a Division Bench comprising the Chief Justice, Panigrahi, and Justice Narasimham. The Chief Justice delivered the judgment, setting aside the decisions of the lower courts and allowing the appeal with costs awarded throughout. Because the first defendant failed to obtain leave from the High Court to appeal further, it moved the Supreme Court for special leave, which was granted, giving rise to the present appeal. The matter before the High Court on the second appeal was essentially one of fact, a point evident from the Court’s own opening observation: “In second appeal the substantial point urged before us is whether the evidence, both oral and documentary, would warrant an inference that the properties had in fact been dedicated to the deity.” Established jurisprudence, reiterated in a long series of decisions of the Judicial Committee of the Privy Council and this Court, holds that a High Court, on a second appeal, cannot revisit questions of fact, however erroneous the findings of the courts of fact may be. The plaintiff-respondents’ counsel did not and could not argue that the High Court was competent to go behind the factual findings recorded by the two courts of fact. Nevertheless, the High Court examined the oral and documentary evidence, and after an elaborate review of the extensive material presented by the parties, it recorded the finding that “defendant No. 1 has failed to prove his title and that the plaintiffs are entitled to have the suit properties sold with a view to satisfy the decree obtained by them against the judgment-debtors.” In our view, the High Court misdirected itself both in law and on the facts, even assuming that it was permissible to go behind the factual findings. Firstly, the High Court misplaced the onus of proof, as will be shown from the quoted conclusion. The onus of proof loses much of its significance when both parties have adduced evidence, yet the High Court appeared to place undue emphasis on the onus, thereby deviating from the correct approach.

The High Court attempted to assess for itself whether the burden of proof had been satisfied by the contesting defendant, identified as the deity. This intention is evident from the Court’s observation that, applying the relevant principles, Exhibit F and the deed of trust alone do not create any endowment. Consequently, the Court held that the defendants must produce extrinsic evidence establishing that an actual endowment existed in favour of the specific idol described as ‘Devottar’. Later, after citing what it termed ‘innumerable decisions’, the Court remarked that no proof had been offered regarding the formal dedication of the properties to the deity except the description found in Exhibit F. The Court concluded that this recital was insufficient to support a finding of a genuine dedication of the said properties. With respect, the observation is made that the High Court appears to have ignored the well-established rule that the plaintiff bears a heavy burden when seeking a declaration that a solemnly executed and registered document is fictitious. The burden intensifies when the plaintiff also attempts to overturn a civil-court order issued in execution proceedings that upheld a third-party claim over the property. To remove the adverse effect of that order, the plaintiff must positively demonstrate that the executing court’s decision was erroneous after due inquiry. Accordingly, in the present matter, the respondents, although plaintiffs, bore an initial heavy obligation not only to prove the civil-court order was erroneous but also to establish that the trust deed relied upon by the contesting defendant was fictitious. Both lower courts of fact examined all material evidence in depth and jointly concluded that the plaintiffs had failed to discharge their evidentiary burden. The sole issue before the High Court was whether the trust deed represented a fictitious transaction, a question that is fundamentally factual in nature. Reference is made to the recent decision of this Court in Meenakshi Hills, Madurai v. Commissioner of Income-Tax, Madras, which held that a finding of fact, even if based on inference, does not become a question of law except in limited circumstances. The present case does not fall within those exceptional categories, and therefore the observations are sufficient to overturn the High Court’s decision, although the reasons will also be examined.

In reviewing the case, the Court first set aside the concurrent findings of fact recorded by the lower courts in order to determine whether the High Court had reached a correct conclusion, while assuming throughout that the High Court possessed the jurisdiction to consider those factual questions. The High Court’s reasoning was observed to have been heavily influenced by certain statements contained in the deed of trust, as illustrated by the following excerpt: “Above all, there is a further significant recital which appears to have escaped the notice of both the courts below, and that is that the ‘trustees can dispose of the properties if ever they think it necessary, and may also appoint a Pujari for conducting the daily worship of the deity.’” In giving effect to this observation, the High Court failed to appreciate the true importance of another clause appearing toward the end of the deed, which reads: “Be it stated that if it will be required at any time, you the trustees according to your unanimous opinion will sell the property situated at Mouzas Baramunda, Siripur and Nuapalli etc., in Killa Khurda and Zilla Dandimal out of the immovable properties described in schedule ‘kha’ of this deed and will appoint any servant etc., for the purpose of worship.” The Court noted that this provision specifically empowered the trustees to alienate certain parcels of land that, according to the evidence, were located in inconvenient positions. The properties that are the subject of the present dispute, however, consist of land and a house located in the town of Cuttack where the deity is situated; consequently, the special authority to alienate property granted in the deed did not extend to the disputed premises. Moreover, the Court observed that a clause of this nature is not inherently anomalous within a trust deed and therefore does not, by itself, support the inference that the document was fictitious or intended to be disregarded.

The High Court then turned its attention to the testimony of the deponent identified as D.W. 3, whom it described, on its own assessment, as a respectable individual. The High Court remarked that “undoubtedly, the testimony of this witness is entitled to great respect and the courts below have accepted it as reliable.” While evaluating this evidence, the High Court added that the central issue before it was whether a genuine dedication in favour of the deity had been made, and observed that “no witness has been called to prove the gift of any single item of the properties in suit. Even the evidence relating to the installation of the idol is extremely obscure.” In making this observation, the High Court overlooked the earlier evidence of D.W. 1, Kunjabahari Lal, who had stated that the shop-house in dispute belonged to the Thakur and that, in 1870 or 1872, a person possibly named Maniklal had gifted the shop-house to the Thakur. The Court therefore concluded that the High Court’s focus on the absence of direct proof of dedication and its disregard for the testimony concerning the alleged gift represented a misapprehension of material evidence relevant to the question of whether the trust deed had been acted upon.

In considering whether the deed of trust had been given effect, the High Court observed that there was no evidence showing that the rents and profits of the properties had been appropriated up to the year 1938, and that the accounts purportedly maintained had not been produced. The Court was said to have overlooked material evidence relevant to this issue. Of particular importance was the testimony of Dhaneswar Lal, who had been examined by the executing court in the claim case on behalf of the claimant. In his evidence, which was marked as extraneous material at trial because the witness was deceased, he stated that he looked after the Thakur’s affairs, was a Panchayat member of the Thakur, performed its puja for a remuneration of Rs 12, had worked as the Thakur’s pujari since 1934, and had looked after the Thakur’s land since 1936. He further declared that he regularly maintained accounts, that those accounts had been filed in the Second Munsif’s Court in connection with Suit No 94 of 1941, and that the disputed property corresponded to lots I and II of the trust deed, with Plot 216 being the Thakur’s temple, a two-storeyed building. The plaintiffs, who opposed the claim, cross-examined the witness and brought out that the accounts he mentioned also included expenditures incurred in the temple. It was noted that the plaintiffs had not called upon the contesting defendant to produce the account-books relating to the disputed properties. Had the defendant been required to produce those documents and failed to do so, a court of fact might have been permitted to draw an adverse inference.

Nevertheless, the High Court, on the second appeal, appears to have drawn such an adverse inference despite the absence of any foundation for it at the trial. The Court stated that the other facts and circumstances of the case raised a strong presumption that, in fact, there had been no endowment. Thus, the decision of the High Court on the second appeal, which reversed the concurrent findings of fact of the two lower courts, was based on inferences drawn from oral and documentary evidence after misplacing the onus of proof, an approach the Court was not entitled to adopt. Moreover, even on the merits, the High Court’s findings were open to serious criticism and were deemed unsound. Consequently, the judgment of the High Court could not be upheld. The appeal was therefore allowed with costs awarded throughout, and the suit was ordered dismissed.