Page 1

“REPORTABLE”

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1938 OF 2014 (Arising out of SLP (Civil) Nos. 15252 of 2006)

Pratima Chowdhury …Appellant

Versus

Kalpana Mukherjee & Anr.          ...Respondents    

J U D G M E N T

JAGDISH SINGH KHEHAR, J.

1. Orchestra  Co-operative  House  Society  Limited  (hereinafter  

referred  to  as  ‘the  Society’)  raised  flats  at  48/IE,  Gariahat  Road,  

Calcutta – 700019.  Indirani  Bhattarcharya became a member of the  

Society on 12.1.1987.  She was issued share certificates bearing nos.  

0047 and 0048.  Based on the above membership she was allotted flat  

no. 5D for a consideration of Rs. 4 lakhs.  The above flat measuring 900  

sq.  ft.  comprised of  three bed rooms,  two bath rooms,  one drawing-

cum-dinning  room,  a  kitchen  and  verandah  on  the  fourth  floor.   In  

addition to the above, she was allotted one covered garage space on  

the  ground  floor.   The  transfer  of  the  flat  no.  5D by  the  Society  to  

Indirani  Bhattacharya  was  approved  by  the  Deputy  Registrar,  Co-

operative Societies.

1

Page 2

2. On  27.3.1991,  Indirani  Bhattacharya  submitted  her  resignation  

from the Society  in  favour  of  Pratima Chowdhury  (i.e.,  the petitioner  

herein).  On 15.4.1991, Indirani Bhattacharya executed an agreement  

for transfer of flat no. 5D to Pratima Chowdhury subject to the consent  

of the Society and the approval of the Deputy Registrar, Co-operative  

Societies,  for  a  consideration  of  Rs.  4  lakhs.   The  Society  having  

consented to the request of Indirani Bhattacharya sought the approval  

of the Deputy Registrar, Co-operative Societies through a letter dated  

29.4.1991.  In this behalf it would also be relevant to mention that Board  

of  Directors  of  the  Society  had  resolved  in  its  meeting  held  on  

16.2.1992, to accept the resignation of Indirani Bhattacharya, as also,  

the consequential  transfer  of  the membership of  the Society and the  

ownership of the flat to the name of Pratima Chowdhury.  In the above  

resolution, the name of Pratima Chowdhury as a member of the Society  

was approved with effect from 9.1.1992.  The Secretary of the Society  

informed Pratima Chowdhury on 17.2.1992, that her membership to the  

Society,  as  also,  the  transfer  of  flat  no.  5D to  her  name,  had been  

approved by the Deputy Registrar, Co-operative Societies.

3.   The facts available  on the records  reveal  that  Partha Mukherjee  

(son-in-law  of  the  petitioner’s  sister,  and  son  of  the  respondent)  

occupied  the  petitioner’s  flat.   Partha  Mukherjee  was  employed  as  

Regional  Sales Manager  with Colgate Palmolive (India)  Limited.   On  

9.3.1992, Colgate Palmolive (India) Limited, confirmed having taken flat  

no. 5D on lease and license, for a period of three years (with effect from  

1.4.1992), for the residence of Partha Mukherjee.  The pleadings also  

2

Page 3

reveal, that with effect from 1.4.1992, Colgate Palmolive (India) Limited,  

took the aforesaid flat on a monthly rent of Rs. 5,000/-.  The above said  

monthly  rent,  was  deposited  in  the  joint  account  of  the  petitioner  

Pratima Chowdhury and Partha Mukherjee.

4.  On 29.6.1992, the petitioner Pratima Chowdhury addressed a letter  

to the Secretary of the Society, requesting the Society to transfer flat no.  

5D to the name of her nominee Kalpana Mukherjee.  The letter dated  

29.6.1992  of  Pratima  Chowdhury,  made  some  express  factual  

disclosures.  Firstly, that she was not in good health.  Secondly, that  

she was not in a position to move to Calcutta from Bombay in the near  

future.  Thirdly, that Kalpana Mukherjee was already residing in the flat  

in question along with Partha Mukherjee.  Fourthly, that above nominee  

Kalpana Mukherjee was her close relative.  In addition to the request of  

transfer  of  flat  no.  5D in  favour  of  her  nominee Kalpana Mukherjee,  

Pratima Chowdhury also informed the Society through her letter dated  

29.6.1992, that all municipal taxes and service charges in connection  

with the above flat should be collected from Kalpana Mukherjee.

5.  Pratima Chowdhury then addressed another letter dated 11.11.1992,  

to  the  Secretary  of  the  Society,  reiterating  her  request  made  in  the  

previous letter  dated 29.6.1992 wherein  she again expressed clearly  

that  the  transfer  being  sought  by  her,  was  without  any  monetary  

consideration.

6.  It was pointed out in letter dated 11.11.1992, that the formal request  

for the transfer was only being made, in order to comply with the rules  

3

Page 4

regulating  such  transfer,  and  also,  to  avoid  future  complications.  

Consequent  upon  the  aforesaid  deliberations,  Pratima  Chowdhury  

executed an agreement  dated 13.11.1992,  transferring her  right,  title  

and interest  in  the flat  no.  5D.   On the  same day as the  aforesaid  

agreement was executed, Kalpana Mukherjee moved an application (on  

13.11.1992).

7.   The  Board  of  Directors  of  the  Society  in  their  meeting  held  on  

14.2.1993,  resolved to accept the resignation of  Pratima Chowdhury,  

and  to  accept  the  membership  of  Kalpana  Mukherjee  (in  place  of  

Pratima Chowdhury), and to seek the approval of the Deputy Registrar,  

Co-operative Societies for the transfer  of  flat  no.  5D to the name of  

Kalpana Mukherjee, on the basis of letters of Pratima Chowdhury dated  

11.11.1992 and 13.11.1992.  Accordingly, the Secretary of the Society  

addressed  a  letter  dated  10.3.1993  to  the  Deputy  Registrar,  Co-

operative Societies,  for  the approval  of  the decision of  the Board of  

Directors (of the Society, dated 14.2.1993).

8.   On  23.4.1993,  Pratima  Chowdhury  wrote  a  letter  to  the  Senior  

Commercial  Executive,  of  the  Calcutta  Electric  Supply  Corporation  

(South Region Office) requesting him to transfer the electricity-supply  

meter of flat no. 5D to the name of Kalpana Mukherjee.  The instant  

letter dated 23.4.1993, is also disputed by Pratima Chowdhury.   She  

has even disputed her signature on the said letter.  She also filed a first  

information report at the Gariahat Police Station, Kolkata, complaining  

that her signature on the above letter was forged.

4

Page 5

9.   The  Assistant  Registrar,  Co-operative  Societies  raised  certain  

objections on the request of the Society for transfer of flat no. 5D from  

the name of Pratima Chowdhury to the name of Kalpana Mukherjee.  In  

this behalf the Assistant Registrar, Co-operative Societies informed the  

Secretary of the Society, that the application of Kalpana Mukherjee for  

membership had not been submitted in the proper format.  It was also  

pointed out,  that  the original  affidavit  had not  been appended to the  

application.   Lastly,  it  was  brought  out,  that  the  Salary  Certificate,  

Income Tax Clearance Certificate and Professional Tax Certificates had  

not  been appended to the application of  Kalpana Mukherjee,  for  the  

transfer of  the flat in her name.  On 22.9.1993, the Secretary of the  

Society provided all the required documents sought by the Department  

of the Co-operative Societies.

10.   Partha  Mukherjee  was  transferred  by  his  employer  Colgate  

Palmolive  (India)  Limited,  from Calcutta  to  Bombay.   Consequently,  

Colgate Palmolive (India) Limited terminated the agreement executed  

by it with Pratima Chowdhury on 19.10.1993, with immediate effect.  In  

the letter dated 19.10.1993, Colgate Palmolive (India) Limited required  

Partha  Mukherjee  to  hand  over  vacant  possession  of  flat  no.  5D to  

Pratima Chowdhury, after refund of security.  On 21.10.1993, Kalpana  

Mukherjee, from her own account, deposited rent in the Bank account of  

Pratima Chowdhury.   On 28.10.1993,  Partha Mukherjee addressed a  

letter to P.R. Keswani, Company Secretary of Colgate Palmolive (India)  

Limited, along with a receipt bearing no. 9893, depicting refund of the  

5

Page 6

security deposit (of Rs. 60,000/-).  The aforesaid refund was shown to  

have been made by Pratima Chowdhury.

11.  On 16.12.1994, 500 shares of Tata Chemicals Limited, 50 shares  

of Siemens, 500 shares of Indian Aluminium and 100 shares of I.T.C.  

Hotels,  standing  in  the  joint  names  of  Partha  Mukherjee  and  Sova  

Mukherjee (wife of Partha Mukherjee) were transferred to the name of  

Pratima Chowdhury.  According to the petitioner Pratima Chowdhury,  

the above transfer of shares was in lieu of loans extended by her to  

Partha  Mukherjee.   However,  according  to  Kalpana  Mukherjee,  the  

transfer  of  the  above  shares,  constituted  consideration  paid  on  her  

behalf (by her son Partha Mukherjee) to Pratima Chowdhury in lieu of  

the transfer of flat no. 5D.

12. Pratima  Chowdhury  wrote  a  letter  dated  28.2.1995  to  the  

Secretary of  the Society,  that she had not received any reply to her  

letter  dated  11.11.1992.   She  also  informed  the  Secretary  of  the  

Society,  that  she  had  decided  to  return  to  Calcutta  permanently.  

Accordingly, she informed the Secretary of the Society, that her request  

for transfer of her membership to the name of Kalpana Mukherjee, be  

treated as withdrawn.  It  is the case of Pratima Chowdhury,  that the  

Society never responded to her letter dated 28.2.1995.  It is also her  

case,  that  her  letter  dated  28.2.1995  was  never  forwarded  by  the  

Society, to the Department of Co-operative Societies.

13.  On 8.3.1995, the Society approached the Deputy Registrar,  Co-

operative  Societies,  seeking  approval  for  the  admission  of  Kalpana  

6

Page 7

Mukherjee  as  a  member  of  the  Society  (in  place  of  Pratima  

Chowdhury).   On  13.3.1995,  the  Deputy  Registrar,  Co-operative  

Societies  conditionally  approved  the  membership  of  Kalpana  

Mukherjee.   Accordingly,  on  13.3.1995  itself  the  shares  of  Pratima  

Chowdhury were transferred to the name of Kalpana Mukherjee.  On  

22.3.1995,  Pratima  Chowdhury  addressed  a  letter  to  the  Deputy  

Registrar, Co-operative Societies, with a copy to the Chairman of the  

Society.   In  the  above  letter,  the  Deputy  Registrar,  Co-operative  

Societies was requested to direct the Society to withdraw the offer of  

transfer  of  her  membership  to  Kalpana  Mukherjee.   It  was  also  

requested, that the application made by Kalpana Mukherjee for transfer  

of share certificates in her name, be not approved.  The instant letter  

dated 22.3.1995, depicts the fact that Pratima Chowdhury was unaware  

of  the  deliberations  of  the  Society,  as  also,  the  approval  (of  the  

deliberations  of  the  Society),  by  the  Deputy  Registrar,  Co-operative  

Societies,  on  13.3.1995.   In  pursuit  of  the  same  objective,  Pratima  

Chowdhury wrote another letter dated 28.3.1995, to the Secretary of the  

Society.  She enclosed therewith, the letter which she had addressed to  

the Deputy Registrar, Co-operative Societies dated 22.3.1995.  Therein,  

she  again  reiterated,  that  her  request  for  transfer  of  membership  in  

favour  of  Kalpana  Mukherjee  be  treated  as  withdrawn.   In  order  to  

consider the request made by Pratima Chowdhury in her letter dated  

22.3.1995  (to  the  Deputy  Registrar,  Co-operative  Societies)  and  the  

letter  dated  28.3.1995 (to  the Secretary  of  the  Society);  the  Society  

convened a meeting of the Board of Directors on 2.4.1995.  Rather than  

7

Page 8

considering the issue on merits, the Board of Directors resolved, that it  

had no legal competence to restore the membership of the Society, as  

also,  the  retransfer  of  the  ownership  of  the  flat  no.  5D,  to  Pratima  

Chowdhury.   Having  so  resolved,  the  Secretary  of  the  Society  

forwarded a copy of the resolution dated 2.4.1995, to the petitioner on  

10.4.1995.

14.  At this juncture, it would be relevant to mention, that the Board of  

Directors of the Society approved the transfer of flat no. 5D (comprising  

of three bed rooms, two bath rooms, one drawing-cum-dinning room,  

one verandah and one kitchen on the fourth floor, located at no. 48/IE,  

Gariahat Road, Calcutta - 700019 to the name of Kalpana Mukherjee.  

In addition to the aforesaid flat, the ownership of Pratima Chowdhury  

also comprised of a covered garage space, on the ground floor.  The  

same were not mentioned in the clearances dated 14.2.1993 (by the  

Board  of  Directors  of  the  Society)  and  13.3.1995  (by  the  Deputy  

Registrar,  Co-operative  Societies).   Consequently  based  on  the  

agreement  dated  25.4.1995  between  Kalpana  Mukherjee  and  the  

Society, the said garage space was also subsequently transferred to the  

name of Kalpana Mukherjee.

15. On 16.4.1995 within two weeks, from the date decision taken by  

the Board of Directors (on 2.4.1995) and within one week from the date  

of  communication  thereof  to  the  petitioner  (through  letter  dated  

10.4.1995),  Pratima Chowdhury addressed a notice dated 16.4.1995,  

contesting  the  validity  of  the  Board  of  Directors’  Resolution  dated  

8

Page 9

2.4.1995.  The petitioner also assailed the approval of the said transfer  

dated  13.3.1995.   The  Deputy  Registrar,  Co-operative  Societies  

referring  to  the  petitioner’s  letter  dated  28.2.1995  (wherein  Pratima  

Chowdhury had withdrawn her request  for transfer  of membership in  

favour  of  Kalpana Mukherjee),  wrote a letter  dated 31.5.1995 to the  

Secretary  of  the  Society.   In  the  letter  dated  31.5.1995,  the Deputy  

Registrar,  Co-operative  Societies  also  highlighted  the  fact  that,  the  

Society  had  not  brought  the  letter  dated  28.2.1995  to  the  notice  of  

Deputy  Registrar,  Co-operative  Societies,  at  the  time  of  seeking  

approval of the Co-operative Department.  The Secretary of the Society  

was  accordingly  directed,  to  take  a  decision  on  the  matter,  and  to  

forward  the  same  to  the  Deputy  Registrar,  Co-operative  Societies.  

Being alive of the letter dated 31.5.1995, which was addressed by the  

Deputy  Registrar,  Co-operative  Societies  to  the  Secretary  of  the  

Society, the petitioner through her letter dated 13.6.1995 informed the  

Secretary  of  the  Society,  that  the  withdrawal  letter  dated  28.2.1995  

addressed by her was received by the Secretary of the Society, and  

further that the same had been duly acknowledged on 6.3.1995.  The  

petitioner highlighted the fact, that the approval of the Deputy Registrar,  

Co-operative Societies should not have been sought (by the Secretary  

of the Society), after the receipt of the petitioner’s communication dated  

28.2.1995.

16. Since, the petitioner was not communicated any determination,  

by  the concerned authorities.   She addressed a notice on 9.9.1995,  

calling upon the Secretary of the Society, to deliver the possession of  

9

Page 10

the flat no. 5D, along with the share certificates,  to her within seven  

days  of  the  receipt  of  the  said  notice.   On 21.11.1995,  the  Society  

denied all  the allegations made by the petitioner  against  the Society  

(contained in the notice).  On the claim of retransfer of the shares and  

flat made by the petitioner, the Society responded by asserting, that the  

shares had been transferred to the name of Kalpana Mukherjee, and on  

the basis thereof flat no. 5D also had been transferred in her name,  

thereupon,  the  Society  did  not  have  any  legal  authority  to  

restore/retransfer  the  same  to  the  name  of  the  petitioner.   On  

19.12.1995, the Deputy Registrar, Co-operative Societies also informed  

Pratima Chowdhury, that the transfer of her shares and flat in favour of  

Kalpana Mukherjee had been completed,  and since the Society  had  

resolved on 2.4.1995 that  it  had no legal  competence to  cancel  the  

same, nothing could be done in the matter.  

17. Dissatisfied with the determination of the Co-operative Societies,  

as  also,  the  denial  of  the  consideration  at  the  hands  of  the  Deputy  

Registrar, Co-operative Societies, the petitioner filed Dispute Case No.  

29/RCS of 1995-96.  The aforesaid dispute case was adjudicated upon  

by D.K. Ghosh in his capacity as Arbitrator.   

17(i) During  the  course  of  the  above  determination,  Kalpana  

Mukherjee (who was impleaded as respondent no. 1) filed a reply on  

22.2.1996 which deserves a special mention.  Firstly, according to the  

reply filed by Kalpana Mukherjee flat no. 5D was purchased by Partha  

Mukherjee  in  the  name  of  Kalpana  Mukherjee  (mother  of  Partha  

10

Page 11

Mukherjee).  The above flat was purchased for a total consideration of  

Rs. 4,29,000/-.  The said consideration was paid by way of transfer of  

shares,  in  the  name  of  Partha  Mukherjee  to  the  name  of  Pratima  

Chowdhury.   Highlighting  the  above  factual  position  is  important  

because the entire paper work pertaining to the transfer of flat no. 5D,  

from  the  name  of  Pratima  Chowdhury  to  the  name  of  Kalpana  

Mukherjee indicates, that the above transfer was without any monetary  

consideration, whereas stands adopted by Kalpana Mukherjee was that  

as  a  matter  of  fact  the  said  transfer  was  on  a  consideration  of  Rs.  

4,29,000/-.  Secondly, according to Kalpana Mukherjee (respondent no.  

1), Pratima Chowdhury’s letter dated 28.2.1995 was afterthought.  It is  

therefore,  that  Kalpana  Mukherjee  in  her  reply  emphasized  that  the  

letter  dated  28.2.1995,  was  only  a  scheme  devised  by  Pratima  

Chowdhury to wriggle out of the transaction.   

17(ii) The Secretary of the Society filed separate written reply to the  

case filed by Pratima Chowdhury.  In its reply the Society supported the  

transfer of shares, as also, the transfer of flat no. 5D to the name of  

Kalpana Mukherjee.  The Society clearly brought out in their reply, that  

Pratima Chowdhury  through her letter  dated 29.6.1992 had informed  

the Society, that Kalpana Mukherjee was in occupation of the flat, and  

as such, maintenance charges for the flat should be recovered from her.  

Furthermore,  according to the Society,  the transfer  of  the shares,  as  

also, of flat no. 5D to the name of Kalpana Mukherjee was approved at  

the  request  of  Pratima  Chowdhury,  made  through  her  letter  dated  

11.11.1992.   It  was  submitted,  that  the  aforesaid  request  was  

11

Page 12

considered  by  the  Department  of  Co-operative  Societies,  which  

approved the resignation of Pratima Chowdhury and the consequential  

transfer of membership vide Resolution of the Board of Directors of the  

Society dated 14.2.1993.  The above resolution had been forwarded by  

the  Secretary  of  the  Society,  to  the  Deputy  Registrar,  Co-operative  

Societies (by letter dated 10.3.1993), for approval.  It was pointed out  

that  the  Deputy  Registrar,  Co-operative  Societies  had  approved  the  

Resolution  of  Board  of  Directors  of  the  Co-operative  Societies  on  

13.3.1995.  Additionally, it was pointed out, that after the approval of the  

change  of  membership  to  the  name  of  Kalpana  Mukherjee,  the  

petitioner  Pratima  Chowdhury  had  required  the  Senior  Commercial  

Executive  of  Calcutta  Electric  Supply  Corporation,  to  transfer  the  

electricity-supply  meter  of  flat  no.  5D  to  the  name  of  Kalpana  

Mukherjee.  According to the Society, the above facts clearly evidenced  

the unequivocal intention of Pratima Chowdhury to transfer her shares  

and flat no. 5D to the name of Kalpana Mukherjee, which was given due  

effect  to  by  the  Society  after  seeking  the  approval  of  the  Deputy  

Registrar,  Co-operative  Societies.   In  view of  the  aforestated  factual  

position, the Society denied the claim raised by Pratima Chowdhury in  

Dispute Case No. 29/RCS of 1995-96.   

17(iii) It is also imperative to record herein, that Pratima Chowdhury had  

filed  rejoinder,  to  the  written  statements  filed  on  behalf  of  Kalpana  

Mukherjee and the Society before the Arbitrator.  It was pointed out in  

the rejoinder, that Partha Mukherjee was married to Sova Mukherjee.  

Sova Mukherjee was the daughter of H.P. Roy and Bani Roy (sister of  

12

Page 13

the  petitioner,  Pratima  Chowdhury).   On  account  of  the  above  

relationship  she  had  treated  Sova  Mukherjee  as  her  daughter  and  

Partha Mukherjee as her son.  Consequently on the transfer of Partha  

Mukherjee to Calcutta (from Bombay), she allowed him to reside in flat  

no.  5D.   At  the  behest  of  Partha  Mukherjee,  his  employer  Colgate  

Palmolive (India) Limited entered into a lease agreement with Pratima  

Chowdhury  on  9.3.1992.   Under  the  lease  agreement  Pratima  

Chowdhury was entitled to rent at the rate of Rs. 5,000/-  per month.  

The lease agreement was executed for a period of  three years,  with  

overriding condition, that the tenure of lease would coincide  with the  

tenure  of  Partha  Mukherjee  at  Calcutta,  while  in  the employment  of  

Colgate Palmolive (India) Limited.  It was also pointed out, that Partha  

Mukherjee  had opened  a joint  account  along  with  petitioner  Pratima  

Chowdhury, for the deposit of rent payable by Colgate Palmolive (India)  

Limited.   It  was  also  pointed  out,  that  Partha  Mukherjee  singularly  

operated  the  aforesaid  joint  account.   In  his  above  capacity  he  

encashed  the  rent  deposited  by  Colgate  Palmolive  (India)  Limited,  

without the knowledge and notice of the petitioner Pratima Chowdhury.  

She also asserted in the rejoinder, that she could obtain the details of  

the agreement executed with Colgate Palmolive (India) Limited, as also,  

the deposits  of rent  in her joint  account  with Partha Mukherjee,  only  

after she had issued a letter to Colgate Palmolive (India) Limited, that  

she would not make any claim from the employer of Partha Mukherjee,  

on  the  basis  of  information  supplied.   In  her  rejoinder  Pratima  

Chowdhury also asserted, that Partha Mukherjee had forced her to sign  

13

Page 14

the  letter  dated  11.11.1992,  without  disclosing  the  contents  thereof.  

The categoric stance adopted by Pratima Chowdhury in her rejoinder  

was, that she was not aware of the contents of letter dated 11.11.1992,  

and furthermore, Partha Mukherjee had obtain her signature on other  

blank papers as well, by falsely informing her that the papers would be  

used to explain his stay in flat no. 5D.  She also denied having executed  

the  document  dated  13.11.1992,  which  was  allegedly  notarized  at  

Calcutta.  In fact she denied her presence at Calcutta on 13.11.1992.  

She further stated, that Partha Mukherjee did not remain in employment  

of Colgate Palmolive (India) Limited after his transfer to Bombay.  It was  

also pointed out by her, that on his return to Bombay, Partha Mukherjee  

started his independent business in aluminium products.  For the said  

business Pratima Chowdhury claims to have advanced a loan of Rs.2  

lakhs to Partha Mukherjee.  The loan stated to have been extended to  

Partha Mukherjee was by way of a cheque drawn in favour of Bharat  

Aluminium Company, for the supply of raw material for the business of  

Partha Mukherjee.  She further contended, that Partha Mukherjee also  

took  loan  of  Rs.  1,50,000/-  from  Bani  Roy  (sister  of  the  petitioner,  

Pratima Chowdhury).  It was pointed out, that the share certificates held  

by  Partha  Mukherjee  jointly  with  his  wife  Sova  Mukherjee,  were  

transferred to the petitioner Pratima Chowdhury and her sister Bani Roy  

during the year 1994, toward repayment of loans taken from them by  

Partha  Mukherjee.   The  position  accordingly  adopted  was,  that  the  

transfer of share certificates did not constitute consideration in lieu of  

the transfer of flat no. 5D to Kalpana Mukherjee.  A categoric assertion  

14

Page 15

was made by the petitioner Pratima Chowdhury in her rejoinder, that on  

30.11.1992 Partha Mukherjee had no company shares either in his own  

name or in the name of his wife Sova Mukherjee (nor in the joint names  

of  the  husband  and wife).   Accordingly,  the plea  raised  by  Kalpana  

Mukherjee  in  her  reply  (to  the  dispute  case  filed  by  the  petitioner  

Pratima  Chowdhury)  was  that  the  transfer  transaction  was  for  

consideration, and that, the payment of consideration made by transfer  

of shares from the name of Partha Mukherjee to the name of Pratima  

Chowdhury, was false.  Pratima Chowdhury also denied, that she had  

addressed a letter dated 23.4.1993 to the Senior Commercial Executive  

of the Calcutta Electric Supply Corporation (South Region Office).  She  

disputed even her signatures on the above letter, and further asserted,  

that  she  had  filed  a  first  information  report  at  the  Gariahat  Police  

Station,  Kolkata.   On  the  basis  of  the  factual  position  noticed  

hereinabove, the petitioner Pratima Chowdhury reiterated, that she had  

neither surrendered, nor resigned from the membership of the Society,  

nor had she sought the transfer of flat no. 5D from her name to the  

name of Kalpana Mukherjee.

18. Before  the  Arbitrator,  the  petitioner  examined  three  witnesses.  

She examined herself as PW1, she examined Vani Ganapati as PW2  

and H.P. Roy as PW3.  H.P. Roy PW3 (is married to Bani Roy, the  

sister of the petitioner Pratima Chowdhury) is the father-in-law of Partha  

Mukherjee.   Kalpana  Mukherjee  examined  four  witnesses  in  her  

defence.   She examined herself  as DW1, Partha Mukherjee her son  

was examined as DW2, the Secretary of the Society was examined as  

15

Page 16

DW3 and S.N. Chatterjee, Advocate, who had notarized the documents  

referred to above, was examined as DW4.

19. In  the  process  of  adjudicating  upon  the  matter,  the  Arbitrator  

framed six issues of fact, and seven issues of law.  The same are being  

extracted hereunder:

“QUESTIONS OF FACT INVOLVED

i) Whether  the  Plaintiff  tendered  resignation  on  11.11.92 from the membership of the Society or not.

ii) Was the document executed on 13.11.92 a deed of  transfer of flat or an agreement for transfer of flat.

iii) Whether  consideration  money  was  paid  by  the  Defendant no. 1 to the plaintiff or not.

iv) Whether the payment of consideration money by way  of transfer of shares of companies can be treated as  valid payment of consideration money or not.

v) Whether the Defendant no. 2 accepted the admission  of the membership of the Defendant no. 1 on 14.2.93  or

vi) Whether the flat in question was encumbered due to  existence  of  lease  and  license  agreement  at  the  material point of time i.e. on 11.11.92 or on 13.11.92.

“QUESTIONS OF LAW INVOLVED

i) Whether  the  instant  dispute  is  barred  by  law  of  limitation.

ii) Whether sub-section 9 of section 85 of West Bengal  Co-Operative  Societies  Act,  1983  was  followed  in  case of transfer of flat in question of the plaintiff.

iii) Whether section 69  and 70 of the West Bengal Co- Operative  Societies  Act  1983  were  followed  in  respect  of  admission  of  membership  of  the  Defendant no. 1.

16

Page 17

iv) Whether Rules 135(3) (a) and 142(1) of West Bengal  Co-Operative Societies Rules 1987 were obeyed or  not.

v) Whether Rule 127(1) of West Bengal  Co-Operative  Societies  Rules  1987  was  obeyed  in  case  of  nomination or not.

vi) Whether the disputed transfer of flat contradicted the  relevant provisions of the Bye-laws of the Defendant  Society or not.

vii) The Doctrine of estoppel as per sections 115 & 116  of the Evidence Act 1872 whether attracted or not.”

20. It is necessary for us to briefly record the factual as also the legal  

conclusions drawn by the Arbitrator in his order dated 5.2.1999, while  

disposing of the disputes raised by Pratima Chowdhury.  Accordingly  

we are summarizing the same hereunder:-

(i) In respect of the letter dated 11.11.1992, the Arbitrator observed  

that the same was drafted by Partha Mukherjee.  This inference came  

to be drawn from the manuscript of the original.  The Arbitrator pointed  

out that the letter dated 11.11.1992, disclosed that the transaction was  

not  based  on  passing  of  monetary  consideration,  whereas,  Kalpana  

Mukherjee had expressly asserted in her defence, that the transaction  

was executed on an agreed consideration of Rs. 4,29,000/-.  Kalpana  

Mukherjee  had  also  affirmed,  that  the  aforesaid  consideration  had  

passed from the transferee to the transferor  by transfer  of shares of  

Partha Mukherjee, to the name of Pratima Chowdhury.  The Arbitrator  

relying on the contents of the letter dated 11.11.1992, recorded that the  

letter  itself  mentioned that  the  details  disclosed therein,  were  meant  

purely to comply with the rules and to avoid future complications.  The  

17

Page 18

Arbitrator felt, that if Pratima Chowdhury had the intention to sell the flat,  

she would have mentioned the same in her letter dated 11.11.1992.  It  

was also observed by the Arbitrator, that there was no justification for  

not mentioning the monetary consideration in the said letter.  On the  

instant  aspect  of  the matter  the  Arbitrator  was of  the view,  that  the  

disclosure of the above consideration would have clearly avoided future  

complications (which seem to be the intention for writing the letter dated  

11.11.1992).   The  Arbitrator  also  pointed  out,  that  the  letter  dated  

11.11.1992  could  not  be  treated  as  a  letter  of  resignation  of  the  

petitioner Pratima Chowdhury from the Society.  In this behalf it  was  

noticed, that the word “resignation” was completely absent from the text  

of the letter dated 11.11.1992.

(ii) In respect of letter dated 13.11.1992 the Arbitrator pointed out,  

that the same was notarized by S.N. Chatterjee, Advocate, who was the  

son-in-law of the sister of Kalpana Mukherjee (defendant No. 1, before  

the Arbitrator).  Although, the above notary stated that the letter dated  

13.11.1992  was  signed  by  all  the  parties  concerned  before  him  at  

Calcutta, he acknowledged, that he did not issue any notarian certificate  

in terms of Section 8 of the Notary Act.  According to the Arbitrator,  

Pratima  Chowdhury  and  all  the  witnesses  appearing  for  her,  had  

unequivocally and categorically affirmed, that she (Pratima Chowdhury)  

was  in  Bombay on 11.11.1992,  as  also,  on 13.11.1992.   Therefore,  

according to the Arbitrator,  the question of  her  appearing before the  

notary at Calcutta on 13.11.1992, did not arise at all.  According to the  

Arbitrator,  the  registration  number  of  the  Society  had  not  been  

18

Page 19

mentioned  in  the  document  dated  13.11.1992,  this  according  to  the  

Arbitrator, made the document suspicious because Anil Kumar Sil, the  

Secretary of the Society, had mentioned that the above document dated  

13.11.1992 was executed at his residence.  If the above factual position  

was correct, according to the Arbitrator, the registration number would  

have been supplied by the Secretary of the Society, and would have  

been mentioned in the document itself.  Furthermore, according to the  

Arbitrator, the document dated 13.11.1992 was in the nature of deed of  

transfer, but such transfer would materialize after (and not before) the  

consent of the Board of Directors of the Society, and the approval of the  

Deputy Registrar, Co-operative Societies.  As per the Arbitrator, even  

the first  step towards transfer  of  flat  no.  5D had not commenced on  

13.11.1992, and therefore, the question of allotment and handing over  

the  possession  of  the  flat  to  the  nominee  Kalpana  Mukherjee,  in  

accordance with the terms and conditions of the allotment and bye-laws  

of the Society did not arise either in law or in fact, as has been wrongly  

stated in the said document dated 13.11.1992.  As per the Arbitrator  

even the document dated 13.11.1992 was silent on the consideration  

for such transfer, despite Kalpana Mukherjee expressing that the above  

transfer was for a sale consideration of Rs. 4,29,000/-.  According to the  

Arbitrator, the possession of Kalpana Mukherjee, was through Partha  

Mukherjee,  because  of  the  lease  and  license  agreement  between  

Pratima  Chowdhury  and  Colgate  Palmolive  (India)  Limited  (which  

commenced on 1.4.1992 and was terminated on 19.10.1993), and not  

on the basis of the document dated 13.11.1992.  The Arbitrator also  

19

Page 20

pointed out, that Kalpana Mukherjee had deposited rent in the account  

of Pratima Chowdhury on 21.10.1993, describing it as rent payable to  

Pratima  Chowdhury.   The  Arbitrator  further  observed  that  Pratha  

Mukherjee in his letter dated 28.10.1993 mentioned Pratima Chowdhury  

as the landlady of flat no. 5D.  Based on the above two instances of  

21.10.1993 and 28.10.1993,  the  Arbitrator  was of  the  view,  that  the  

assertion of transfer of flat no. 5D by Pratima Chowdhury to Kalpana  

Mukherjee stood clearly annihilated.

(iii) On the issue of  the consideration money,  the Arbitrator  noted,  

that Kalpana Mukherjee had stated in her defence, that the parties had  

orally  settled  the  passing  of  consideration  in  lieu  of  flat  no.  5D,  at  

Rs.4,29,000/-.  It was also her contention, that the parties had settled  

that the above agreed consideration would be paid by Partha Mukherjee  

to Pratima Chowdhury by transferring his shares in different companies  

to  the  name  of  Pratima  Chowdhury.   But  Pratima  Chowdhury  

categorically denied the passing of any consideration, as she had no  

intention to sell the property.  She also asserted, that the shares shown  

to have been transferred from the name of  Partha Mukherjee to the  

name of Pratima Chowdhury, were acquired by Partha Mukherjee long  

after  November,  1992  (when  the  letters  dated  11.11.1992  and  

13.11.1992 were issued) i.e.  from August,  1993 to April,  1994.   The  

details of the transfer of shares was disclosed in the award passed by  

the Arbitrator as under:-

“COMPANY’S NAME NO. OF SHARES ACQUIRED  

20

Page 21

Tata Chemicals Ltd. 50 nos. 8.9.93 Tata Chemicals Ltd. 450 nos. 27.10.93 Siemens 50 nos. 2.8.93 Indian Aluminium 500 nos. 4.3.94 I.T.C. Hotels 100 nos. acquired with

Mr. H.P. Roy 4.4.94”

The above shares were acquired by Partha Mukherjee  jointly,  either  

with his wife or with his father-in-law, long after the material  point of  

time.  Pratima Chowdhury’s assertion before the Arbitrator, questioning  

truthfulness of the assertion of Kalpana Mukherjee, was also based on  

the fact that, Kalpana Mukherjee (or Partha Mukherjee) could not have  

agreed to transfer to Pratima Chowdhury, what they did not themselves  

hold when the transaction was allegedly executed.  In order to falsify the  

contention  of  Kalpana  Mukherjee  (and  Partha  Mukherjee)  that  

consideration was paid to Pratima Chowdhury by transfer of shares as  

noticed above, it was stated that after Partha Mukherjee was transferred  

from Calcutta to Bombay in the year 1993, he did not continue with his  

employment  with Colgate Palmolive (India)  Limited,  as he wanted to  

start a business of aluminium products with one R.K. Sen in Bombay.  

Keeping in view the above objective, Partha Mukherjee took a loan of  

Rs. 2 lakhs from Pratima Chowdhury.  The above loan was extended by  

Pratima  Chowdhury  by  way  of  cheques  drawn  in  favour  of  Bharat  

Aluminium  Company  Limited  for  supply  of  raw  materials  for  Partha  

Mukherjee’s business.  It was further contended that Partha Mukherjee  

similarly took a loan of Rs. 2 lakhs from his own wife Sova Mukherjee  

which was repaid by Partha Mukherjee through cheques (bearing nos.  

021865, 021866 and 021867) drawn on the Bank of Baroda.  It was  

21

Page 22

further pointed that Partha Mukherjee had similarly taken a loan for a  

sum of Rs.1.5 lakhs for the same purpose from Bani Roy (his mother-in-

law) which he had still not repaid.  It was pointed out, that at the asking  

of H.P. Roy (his own father-in-law, father of Sova Mukherjee) Partha  

Mukherjee had transferred share certificates standing in his name, and  

in  the  name  of  his  wife  Sova  Mukherjee,  to  the  name  of  Pratima  

Chowdhury,  towards  repayment  of  the  abovementioned  loans.  

Accordingly,  the  case  of  Pratima  Chowdhury  was,  that  transfer  of  

shares by Partha Mukherjee to the name of Pratima Chowdhury, was  

for a completely different transaction, and had nothing to do with the  

allowing of the usage and occupation of the flat, by Kalpana Mukherjee  

and Partha Mukherjee.

(iv) On the lease and license agreement the Arbitrator noticed, that  

Partha  Mukherjee  (son  of  Kalpana  Mukherjee),  and  son-in-law  of  

Pratima Chowdhury’s sister Bani Roy, was allowed to reside in flat no.  

5D, consequent upon his transfer from Bombay to Calcutta (while in the  

employment of Colgate Palmolive (India) Limited).  It was also noticed,  

that  the  lease  and  license  agreement,  was  executed  by  Colgate  

Palmolive (India)  Limited,  at  the instance of  Partha Mukherjee,  for  a  

monetary consideration of  Rs. 5,000/-  per  month,  as rent payable to  

Pratima  Chowdhury.   To  deposit  the  above  consideration  Partha  

Mukherjee opened a joint account in the names of Pratima Chowdhury  

and himself.  The Arbitrator noted, that when Partha Mukherjee drafted  

the  letter  dated  11.11.1992,  he  utterly  neglected  to  mention  the  

subsisting  lease  and  license  agreement  between  Colgate  Palmolive  

22

Page 23

(India)  Limited and Pratima Chowdhury.   The Arbitrator  also noticed,  

that Kalpana Mukherjee did not inform Colgate Palmolive (India) Limited  

that  flat  no.  5D  had  been  transferred  from  the  name  of  Pratima  

Chowdhury to her name.  On the contrary the Arbitrator pointed out, that  

Kalpana  Mukherjee  on  21.10.1993,  deposited  rent  in  the  account  of  

Pratima Chowdhury, by filing the bank deposit slips.  Furthermore, the  

Arbitrator noticed, that Partha Mukherjee in his letter dated 28.10.1993  

mentioned,  that  Pratima  Chowdhury  as  the  landlady  of  flat  no.  5D.  

According to the Arbitrator, the above factual position clearly indicates,  

that  Kalpana  Mukherjee  along  with  her  son  Partha  Mukherjee  were  

aware,  that  flat  no.  5D  belonged  to  the  petitioner,  even  on  

21/28.10.1993.   Whereas,  they wrongly  depicted  the transfer  thereof  

from  the  name  of  Pratima  Chowdhury  to  the  name  of  Kalpana  

Mukherjee through letter dated 11.11.1992 and 13.11.1992.  Since the  

lease and license agreement between Colgate Palmolive (India) Limited  

and Pratima Chowdhury continued from 1.4.1992 to 19.10.1993, there  

was  no  question  of  handing  over  of  possession  thereof  by  Pratima  

Chowdhury to Kalpana Mukherjee.

(v) On the submissions advanced on behalf of Pratima Chowdhury in  

respect of one covered garage space on the premises of the Society is  

concerned, the Arbitrator concluded from the documents submitted by  

Kalpana Mukherjee, that Pratima Chowdhury had one covered garage  

space also.  The said covered garage space was not mentioned in the  

document  dated  13.11.1992.   Thereafter,  based  on  an  agreement  

executed between Kalpana Mukherjee on the one hand and the Society  

23

Page 24

on the other, the said garage space was also transferred to the name of  

Kalpana  Mukherjee  on  25.4.1995.   According  to  the  Arbitrator,  the  

instant agreement dated 25.4.1995, had no validity as the same was  

neither mentioned in the letter dated 11.11.1992, nor in the document  

dated 13.11.1992.  And therefore cannot be considered as having the  

approval of Pratima Chowdhury.  Accordingly, the Arbitrator expressed  

the view that the covered garage space must be deemed to have never  

been transferred by Pratima Chowdhury to Kalpana Mukherjee.  The  

Arbitrator also concluded, that the agreement dated 25.4.1995 could not  

have been executed in the absence of Pratima Chowdhury.  Based on  

the  above  factual  position  Pratima  Chowdhury  had  also  alleged  

connivance  between  Kalpana  Mukherjee  and  the  Society,  so  as  to  

deprive Pratima Chowdhury of her property.

(vi) Besides the above factual  conclusions drawn by the Arbitrator,  

the  Arbitrator  had  also  concluded  that  the  Society  violated  various  

provisions of the West Bengal  Co-operative Societies Act, 1983, and  

the rules framed thereunder, as also the bye-laws of the Society.  The  

Arbitrator  summarized the conclusions  drawn on the legal  issues as  

under:-

“Keeping in view of the all above, I am of the opinion that  the  transfer  of  the  flat  no.  5D  of  the  Defendant  No.  2  Society  was not  done in  accordance with  laws including  West  Bengal  Co-Operative  Socities  Act,  Rules,  Indian  Contract Act, Transfer of Property Act due to reason at a  glance.

1) Section 85(9), Section 70, Section 69 of West Bengal  Co-Operative Socities Act 1983 have been flouted.

24

Page 25

2) Rule 127(1), Rule 135(3)(a), Rule 142(1) have been  flouted.

3) Bye-laws have been contradicted.

4) No consideration money was paid by the Defendant  no. 1 to the Plaintiff.

5) Societies accepted the resignation of the Plaintiff on  14.2.93 which she had not tendered, if that be so, the  society did not act as per Rule 143 also.

6) The flat in dispute was under the lease and license  agreement at the material time since bank account in  this  respect  was  operated  by  the  son  of  the  Defendant  no.  1  who  also  deposited  cheque  on  Plaintiff’s behalf.

7) The instant dispute case is not barred by limitation.

8) The  transaction  of  13.11.92  does  not  attract  the  doctrine of estoppel.”

21. Based  on  the  abovementioned  conclusions  drawn  by  the  

Arbitrator on the factual and legal issues canvassed by the rival parties.  

The Arbitrator passed the following award:

“AWARD

Keeping  in  view  of  the  above,  based  on  documents,  assessing  all  the pros and cons,  on the basis  of  equity,  justice and good conscience, I pass the following ‘AWARD’:

a) The agreement dt. 13.11.92 between the Plaintiff and  Defendant no. 1 is invalid, void and incomplete and

b) The relevant resolution dt. 14.2.93 (Agenda no. 1) of  the Managing Committee of the Defendant no. 2 is  quashed and;

c) The  Defendant  no.  2  is  directed  to  ensure  and  conform that the plaintiff gets the possession of flat  no. 5D with garage space with immediate effect and  issue share certificate in her name immediately and

d) Any other action if any taken by any authority on and  after  13.11.92  affecting  the  membership  of  the  Plaintiff in any manner whatever is also quashed.

25

Page 26

The above Judgment and Award have been given on  Pronouncement before the parties present.”

22. Dissatisfied with the award rendered by the Tribunal on 5.2.1999,  

Kalpana Mukherjee preferred an appeal bearing no. 14 of 1999 before  

the West Bengal Co-operative Tribunal (hereinafter referred to as the  

Co-operative  Tribunal).   The  Society  (defendant  no.  2,  before  the  

Arbitrator) preferred a separate appeal bearing no. 29 of 1999, to assail  

the award of  the Arbitrator  dated 5.2.1999.  While dwelling upon the  

controversy between the parties, the Co-operative Tribunal considered  

it appropriate to highlight the social relationship and affinity between the  

parties.   According  to  the  Cooperative  Tribunal,  the  relationship  

between  the  parties  had  an  essential  bearing,  to  an  effective  

determination of the controversy.  Insofar as the instant aspect of the  

matter  is  concerned,  rather  than  re-narrating  the  position  taken  into  

consideration, we consider it more appropriate to extract hereunder the  

narration  recorded by the Co-operative  Tribunal  itself.   The same is  

accordingly reproduced hereunder:-

“For proper appreciate of evidence it is proper to introduce the  parties.   P.W.  Chowdhury,  the  respondent  no.  1  in  both  the  appeals is a spinster and now aged 50+.  She is a graduate.  She  studies  in  Calcutta  and  other  places.   She is  an  exponent  to  Bharat Natyam and performs dance at many places of India.  For  a pretty long time she has been residing at Bombay.  Smt. Bani  Roy is her sister.  B. Roy’s husband Mr. H.P. Roy is a wealthy  person in Bombay.  P. Chowdhury has been living in the family of  Mr.  H.P.  Roy  since  the  put  up  herself  in  Bombay.   Partha  Mukherjee is the son-in-law of H.P. Roy.  K. Mukherjee who is the  appellant  in  appeal  no.  14/1999  is  the  mother  of  Partha  Mukherjee.   K.  Mukherjee  retired  from service  in  the  National  Library, Calcutta in 1994.  While in service, she would stay in the  Govt.  accommodation  at  Balvediare  Road,  Alipur.   Partha  Mukherjee,  Son  of  K.  Mukherjee  is  an  Engineer  from  I.I.T.,  Kharagpur  and  obtained  M.B.A.  from  Ahmedabad  and  at  the  

26

Page 27

material  time  worked  as  Sales  Manager/Regional  Manager  of  Colgate  Palmolive  Ltd.  in  Bombay,  Calcutta  and  other  places.  Partha  Mukheree  married  Sova  Mukherjee,  who  was  the  daughter of H.P. Roy of Bombay.  P. Chowdhury, her sister Bani,  H.P.  Roy,  Partha  and Sova,  all  lived together  for  a  prolonged  period  of  time  in  the  house  of  H.P.  Roy  at  Bombay.   Partha  married Sova sometimes in 1987 and little after marriage, he and  Sova started living in the house of H.P. Roy.  Evidence has it to  say that the relationship of Pratima with Sova Rinki is, as Pratima  herself  says,  “like  my  daughter”.   Similarly,  the  evidence  of  Pratima runs that after marriage, her relationship with Partha was  “like my son”.  In 1992, Partha worked for Palmolive Co. Ltd. in  Bombay  and  while  working  there  he,  as  we  have  earlier  observed, would stay in the house of H.P. Roy.  In January, 1992,  Pratima was allotted a flat being no. 5B at 48E, Gariahat Road,  Calcutta-19 belonging to the society.  The said flat was originally  allotted to Smt. Indrani  Bhattacharya and the said Smt. Indrani  Bhattacharya having transferred the flat to Smt. P. Chowdhury,  the latter came to be an allottee of that flat, but P. Chowdhury did  not  reside  there  at  all.   In  March/April,  1992,  Partha  was  transferred  from  Bombay  to  Calcutta  and  needed  an  accommodation.   Colgate  Palmolive  Co.  Ltd.,  was  required  to  arrange accommodation for its officers.  As Pratima and Partha  became  very  closer  and  Pratima  treated  Partha  like  her  son,  Partha put up himself in the flat of Pratima in April, 1992 and it  was  the  Colgate  Palmolive  Co.  Ltd.,  which  by  virtue  of  an  agreement  for  license with  Pratima used to  pay Rs.5000/-  per  month as rent to Pratima.  These are all facts admitted.  We see  that the relationship amongst Pratima, Partha and Kalpana grew  very closer because of Partha marrying the daughter of the sister  of  Pratima.   This  background  has  to  be  borne  in  mind  while  appreciating the evidence on record.”

Having  traced  the  relationship  between  the  parties,  as  has  been  

recorded hereinabove, the Co-operative Tribunal was of the view, that  

the entire approach of the Arbitrator was erroneous, as the Arbitrator  

had treated  Pratima Chowdhury  as  a  pardanashin  lady.   The above  

inference, drawn by the Co-operative Tribunal, is also being extracted  

hereunder:-

“The entire approach of the Ld. Arbitrator seemed to have gone  into the fashion as if the respondent no. 1 P. Chowdhury was a  pardanasin  lady,  that  she was unaware of  the documents  she  was  executing  that  it  was  Partha  who managed  to  get  all  the  documents executed by Pratima so as to obtain transfer of the flat  

27

Page 28

in the name of his mother Kalpana Mukherjee.  Let it be recorded  here at the outset that P. Chowdhury, having regard to her status,  education and wealth cannot  be allowed to take the benefit  of  what  a  pardanasin  woman  is  entitled  to  on  two-fold  grounds;  firstly, she is highly education (illegible) and a literate woman and  secondly,  the  pleading  of  Pratima  Chowdhury  as  we  get  from  plaint does not make out such a case. ”

Just in the manner in which we have recorded the conclusions drawn by  

the  Co-operative  Arbitrator,  highlighting  each individual  aspect  taken  

into consideration, we will  also endeavour to similarly summarize the  

conclusions drawn by the Co-operative Tribunal on different aspects of  

the matter.  The above conclusions are being recorded hereunder:-

(i) The Co-operative Tribunal was of the view, that the determination  

rendered by the Arbitrator was erroneous on account of the fact  

that the Arbitrator did not take into consideration a letter of vital  

importance to the controversy.  In this behalf,  the Co-operative  

Tribunal  examined  the  letter  dated  29.6.1992,  which  Pratima  

Chowdhury had written to the Society, wherein she had indicated  

that due to her indifferent health, she was not in a position to visit  

Calcutta in the immediate future. She accordingly requested the  

Society to transfer her flat to “my nominee Kalpana Mukherjee, a  

close relative of mine”.  In the above letter Pratima Chowdhury  

had also stated, that Kalpana Mukherjee was already occupying  

the flat, and was staying in it with her son (Partha Mukheree), and  

her  daughter-in-law  (Sova  Mukherjee).   She  accordingly  

requested  the  Society,  that  for  the  maintenance  of  the  flat,  

charges payable should be recovered from the residents of the  

flat.  It would be relevant to mention, that Pratima Chowdhury had  

28

Page 29

accepted having written the above letter (in the rejoinder filed by  

her before the Arbitrator).  Despite the above Pratima Chowdhury  

had explained, that the letter dated 29.6.1992 had been signed by  

her at the instance of Partha Mukherjee.  According to the Co-

operative Tribunal,  the above letter  dated 29.6.1992 written by  

Pratima Chowdhury on her letterhead from Bombay, demolished  

the entire case set up by her.  Primarily on the basis of the said  

letter dated 29.6.1992 the Co-operative Tribunal concluded, that  

the factual inferences recorded by the Arbitrator without reference  

to the above letter, were not justified.  It came to be expressly  

concluded by the Co-operative Tribunal, that motives attributed to  

Partha Mukherjee were clearly unjustified.

(ii) According to the Co-operative Tribunal,  after having written the  

above  letter  dated  29.6.1992,  Pratima  Chowdhury  wrote  two  

other letters dated 11.11.1992 and 13.11.1992.  On the basis of  

the above letters, flat no. 5D was transferred by the Society, to  

the name of Kalpana Mukherjee, consequent upon the approval  

of the Deputy Registrar, Co-operative Societies.  In the opinion of  

the Co-operative Tribunal, Pratima Chowdhury did not assail the  

action  of  the  Society  in  transferring  flat  no.  5D  to  Kalpana  

Mukherjee  till  February,  1995.   According  to  the  Co-operative  

Tribunal,  the  challenge to  the transfer  of  the above flat  in  the  

name  of  Kalpana  Mukherjee,  was  raised  only  after  a  marital  

discord had developed between Partha Mukherjee and his wife  

Sova  Mukherjee.   On  account  of  the  above  discord,  Partha  

29

Page 30

Mukhrjee left the company of the family of his father-in-law (H.P.  

Roy).  It  was only thereupon, that Pratima Chowdhury assailed  

the transfer of the flat (from her name, to the name of Kalpana  

Mukherjee).   According  to  the  Co-operative  Tribunal,  the  

Arbitrator  overlooked  the  above  extremely  relevant  factual  

position and accordingly erred in drawing his conclusions.

(iii) Insofar as the document dated 13.11.1992 is concerned, the Co-

operative Tribunal  having examined it,  recorded that  the same  

was  executed  by  Pratima  Chowdhury  and  Kalpana  Mukherjee  

(both as executants), which was attested by H.P. Roy (father-in-

law of  Partha Mukherjee)  and which was also sworn before  a  

notary.   The  Co-operative  Tribunal  also  observed,  that  the  

aforesaid document had been executed on a non-judicial stamp  

paper of Rs.40/-.  The above document in its text recorded, that  

Pratima  Chowdhury  had  transferred  the  possession,  right,  title  

and interest  of flat no. 5D in favour of Kalpana Mukherjee (the  

nominee/transferee).  The reason for the aforesaid transfer was  

indicated in document dated 29.6.1992.  It was mentioned, that  

on account of her (Pratima Chowdhury’s) indifferent health and  

on account of having decided to permanently settle in Bombay,  

she had agreed to transfer the flat no. 5D in favour of Kalpana  

Mukherjee.   It  was also duly recorded in the above document,  

that possession of flat no. 5D had already been handed over to  

Kalpana  Mukhrjee.   It  was  also  pointed  out,  that  Kalpana  

Mukherjee had already applied for  membership  of  the Society,  

30

Page 31

whereafter, she would be entitled to all rights and privileges over  

flat no. 5D in terms of the bye-laws of the Society.  According to  

the  Co-operative  Tribunal,  Pratima  Chowdhury  did  not  deny  

execution  of  document  dated  13.11.1992.   As  per  the  Co-

operative Tribunal, the submission of Pratima Chowdhury about  

having  signed a blank paper,  on which Partha  Mukherjee  had  

executed the document dated 13.11.1992,  was not acceptable.  

The  Co-operative  Tribunal  was  of  the  view,  that  Pratima  

Chowdhury  having  admitted  her  signatures  on  the  document  

dated 13.11.1992, it was not open to her to deny the execution  

thereof.  For the same reason, the Co-operative Tribunal rejected  

the contention advanced on behalf  of Pratima Chowdhury,  that  

she had never appeared before the notary at Calcutta because  

she  had  never  gone  to  Calcutta  during  the  period  when  the  

documents  dated  11.11.1992  and  13.11.1992  were  executed.  

The Co-operative Tribunal felt compelled to record the aforesaid  

conclusion  in  the  following  words:  “Regardless  of  whether  the  

document called agreement dated 13.11.1992 is legal or not, the  

fact remains that the document was executed by the transferor  

and the transferee, and it could not be denied that long before the  

agreement  was executed,  possession of  the flat  was delivered  

way back in March, 1992.”.  Therefore, all the findings recorded  

by the Arbitrator  in  respect  of  the document  dated 13.11.1992  

were not accepted for the above reasons.

31

Page 32

(iv) While dealing with the documents dated 29.6.1992, 11.11.1992  

and 13.11.1992, the Co-operative Tribunal expressed disbelief at  

the  determination  of  the  Arbitrator  to  the  effect,  that  Pratima  

Chowdhury had no intention to transfer her membership and her  

flat bearing no. 5D to Kalpana Mukherjee.  According to the Co-

operative Tribunal, the question whether monetary consideration  

passed from Kalpana Mukherjee to Pratima Chowdhury or not,  

was  a  different  issue,  however,  the  letters  dated  29.6.1992,  

11.11.1992  and  13.11.1992  clearly  expressed  the  intention  of  

Pratima  Chowdhury  to  transfer  flat  no.  5D  in  favour  of  her  

nominee  Kalpana  Mukherjee.   The  Co-operative  Tribunal  was  

also of the view, that the Arbitrator was unjustified in observing,  

that the above letters were drafted by Partha Mukherjee, or that,  

Partha Mukheree prevailed over Kalpana Mukherjee to execute  

the above letters.  According to the Co-operative Tribunal, neither  

the  evidence  available  on  the  records  of  the  case,  nor  the  

circumstances of the case justified any such inference.

(v) While dealing with the issue of consideration, which had passed  

from Kalpana Mukherjee  to  Pratima Chowdhury  on account  of  

transfer of flat no. 5D, the Co-operative Tribunal expressed, that  

the Arbitrator appeared to have been of the view that since in the  

letter  dated  11.11.1992  it  was  stated,  that  no  monetary  

transaction  was  involved,  there  could  be  no  sale,  and  

consequently,  when  there  was  no  sale,  there  could  be  no  

transfer.  The Co-operative Tribunal expressed the view, that sale  

32

Page 33

was not the only mode of transfer.  Relying on the letter dated  

11.11.1992  the  Co-operative  Tribunal  felt,  that  it  could  not  be  

conclusively  held,  that  Pratima Chowdhury  had no intention  to  

transfer flat no. 5D in the name of Kalpana Mukherjee.  In fact,  

according to the Co-operative Tribunal,  the issue of passing of  

consideration and the issue of transfer of the property were two  

independent issues.  The said issues, according to the Tribunal,  

had to be determined as per the totality of the circumstances of  

the case.  On the instant aspect of the matter the Co-operative  

Tribunal expressed the view, that the rival parties were tied up by  

a  matrimonial  relationship,  inasmuch  as,  the  niece  (Sova  

Mukherjee) of Pratima Chowdhury was the cementing factor, of  

their relationship.  Accordingly, whether or not consideration had  

passed  between  the  parties,  could  not  be  considered  as  a  

decisive factor.  In fact, the Co-operative Tribunal was pleased to  

further conclude, “Even assuming for the sake of argument that  

no monetary transaction was involved, the factum of transfer is  

not abrogated thereby”.  According to the Co-operative Tribunal,  

the  provisions  of  the  West  Bengal  Co-operative  Societies  Act,  

and the Rules framed thereunder, do not mandate, that transfer  

could  only  be  made  by  way  of  sale.   Keeping  in  view  the  

closeness  of  the  relationship,  which  is  existed  between  the  

parties,  according  to  the  Co-operative  Tribunal,  the  issue  of  

paramount  importance  was  not  the  receipt  of  monetary  

consideration, the issue of paramount importance was only “… to  

33

Page 34

accommodate the plaintiff’s niece Sova and her husband Partha,  

that was uppermost in the mind of the plaintiff…”  Referring to the  

facts  of  the  present  case,  the  Co-operative  Tribunal  held,  that  

consistent with the case of Pratima Chowdhury based on an oral  

agreement,  Partha  Mukherjee  transferred  shares  of  different  

companies “… worth  Rs.4,29,000/-  in  favour  of  the plaintiff  on  

6.12.1994  by  way  of  consideration  of  the  apartment…”.   It  is  

necessary to notice the observations made by the Co-operative  

Tribunal  on  the  instant  aspect  of  the  matter.   The  same  are  

accordingly reproduced in the words of the Co-operative Tribunal:  

“One  may  not  believe  the  reality  of  oral  agreement  so  as  to  

determine the price and of payment thereto by transfer of shares  

of different companies in favour of the respondent no. 1.  But if it  

appears from the documents which show that in the latter part of  

the  year  1994,  shares  worth  Rs.4,29,000/-  were  transferred  in  

favour  of  P.  Chowdhury  and  if  no  convincing  evidence  is  

forthcoming as to payment of that money for different purpose or  

for  different  reason  then  one  is  to  believe  the  passing  of  

consideration price, and the passing of consideration price when  

proved would virtually prove the alleged oral agreement to that  

effect.”

(vi) The Co-operative Tribunal also examined the rival contentions of  

the  parties  in  respect  of  the  place  where  the  documents  in  

question were executed.  It  was pointed out,  that the evidence  

produced  by  Pratima  Chowdhury  to  the  effect,  that  she  had  

34

Page 35

signed  the  documents  in  Bombay,  could  not  be  accepted.  

Likewise, according to the Co-operative Tribunal,  the witnesses  

produced by Pratima Chowdhury on the above issue, were not  

reliable.  According to the Co-operative Tribunal, when the notary  

who was an Advocate stated on oath, that the documents were  

executed  in  Calcutta  before  him,  it  was  not  possible  to  give  

credence  to  the  statement  of  Pratima  Chowdhury  or  the  

witnesses  produced  by  her.   According  to  the  Co-operative  

Tribunal, it needed to be kept in mind even, insofar as the instant  

aspect of the matter was concerned, that Pratima Chowdhary had  

raised a dispute in respect of the transfer of flat no. 5D only after  

a marital discord had developed between Partha Mukherjee and  

Sova Mukherjee.

(vii) According to the Co-operative Tribunal “the question as to why  

Kalpana Mukherjee was not made a nominee in January, 1992  

when she was put in possession of the flat, lies in the fact that  

since  1987,  Kalpana  Mukherjee’s  son  Partha  Mukherjee  had  

been  residing  in  Bombay with  his  father  in  law H.P.  Roy and  

Pratima Chowdhury.  According to the Co-operative Tribunal, the  

Arbitrator  recorded a useless reasoning,  that  the nomination in  

favour of Kalpana Mukherjee was not acceptable.  Referring to  

Sections 79 and 80 of the West Bengal Co-Operative Societies  

Act, the Co-operative Tribunal expressed the view, that it was not  

compulsory that transfer of nomination could only be in favour of  

a  member  of  the family  of  the  person making  the nomination.  

35

Page 36

According  to  the  Co-operative  Tribunal,  the  letters/documents  

dated  29.6.1992,  11.11.1992  and  13.11.1992  were  sufficient  

proof  of  the  nomination  by  Pratima  Chowdhury  in  favour  of  

Kalpana Mukherjee.  It was also pointed out, that the Society had  

accepted  the  above  nomination,  which  was  approved  by  the  

Deputy  Registrar,  Co-Operative  Societies.   It  was  accordingly  

concluded by the Co-operative Tribunal, that in such a situation,  

no separate letter giving consent to the transfer was required.   

(viii) Another  interesting  aspect  of  the matter  dealt  with  by  the  Co-

operative Tribunal was based on the principle of estoppel.  Rather  

than expressing the observations and conclusions drawn by the  

Co-operative  Tribunal  in  our  words,  we  consider  it  just  and  

appropriate to narrate the findings recorded by the Co-operative  

Tribunal by extracting its observations.  The same are accordingly  

reproduced hereunder:-

“Section 115 of the Evidence Act provides that “when one person  has by his declaration act or commission, intentionally causes or  permits another person to believe a thing to be true and to act  upon  such  belief,  neither  he  nor  his  representative  shall  be  allowed  in  the  suit  or  proceeding  between  herself  and  such  person  or  his  representative  shall  be  allowed  in  the  suit  or  proceeding  between  herself  and  such  person  or  his  representation, to deny the truth of that thing”.  The following facts  are very much present to invoke the doctrine.

(a) Fraud,  undue  influence  (illegible)  and  misrepresentation has not been proved;

(b) (illegible) (c) (Illegible) (d) Partha was in need of accommodation in Calcutta; (e) Long before transfer  Kalpana was already made a  

nominee in respect of the flat in question; (f) Unquestionably  two  letters  dated  19.6.1992  and  

13.11.1992 are  there  addressed by Pratima to  the  

36

Page 37

society clearly asking for transfer of the flat in favour  of Kalpana;

(g) Possession was delivered pursuant  to those letters  and agreement dated 13.11.1992;

(h) Lease and license agreement with Colgate Palmolive  Ltd., legally cannot destroy the factum of transfer;

(i) Partha  and  Kalpana  are  led  to  believe  about  the  completion of transfer;

(j) Under  the law it  (illegible)  required to be executed  and registered under the T.P. Act and the I.R. Act;

(k) Pratima  writes  to  CESC  to  henceforth  collect  all  charges from Kalpana;

(l) Pratima  slept  a  slumber  after  the  signing  of  the  agreement dated 13.11.1992 till April, 1993.

These facts are to our mind sufficient to invoke  the doctrine of estoppel.  When society acted upon letters of the  plaintiff/respondent  no.  1  and  transfer  was  effected,  the  respondent no. 1 is estopped from challenging her stand.”

(ix) It  was argued before the Co-operative Tribunal,  that  when the  

lease and license agreement came to an end, Partha Mukherjee  

wrote a letter to Colgate Palmolive India Limited informing it of the  

termination of the lease and license agreement by asserting, that  

“Landlady  refunded  back  the  security  deposit  of  Rs.60,000/-“.  

Factually, Partha Mukherjee had deposited the above amount of  

Rs.60,000/-,  in  the Calcutta  office of  Colgate  Palmolive (India)  

Limited.  It was argued before the Co-operative Tribunal, that the  

use  of  the  expression  “landlady”  by  Partha  Mukherjee,  was  

indicative of the fact that the transfer of flat no. 5D had actually  

not  taken  place.   According  to  the  Co-operative  Tribunal,  the  

aforesaid argument was not acceptable because in the eyes of  

Colgate  Palmolive  (India)  Limited,  Pratima  Chowdhury  was  a  

landlady  and  accordingly  it  was  not  required  that  Partha  

Mukherjee should inform Colgate Palmolive (India) Limited, that  

37

Page 38

Pratima Chowdhury had transferred flat no. 5D to the name of his  

mother Kalpana Mukherjee.

Based on the aforesaid findings recorded by the Co-operative Tribunal,  

both the appeals were allowed.  The impugned award passed by the  

Tribunal dated 5.2.1999 in Dispute Case No. 29/RCS of 1995-96 was  

set aside.  Accordingly, the dispute raised by Pratima Chowdhury was  

dismissed.

23. Dissatisfied with the common order passed by the Co-operative  

Tribunal dated 16.5.2002, vide which Appeal nos. 14 of 1999 and 29 of  

1999  were  disposed  of,  the  petitioner  invoked  the  civil  revisional  

jurisdiction of the High Court at Calcutta (hereinafter referred to as, the  

High Court).  During the course of deliberations before the High Court,  

Pratima Chowdhury assailed the findings recorded by the Co-operative  

Tribunal  on  various  aspects  of  the  matter.   The  High  Court  in  its  

deliberations traced the sequence of facts in the background of the facts  

as were examined by the Arbitrator, as also, the Co-operative Tribunal.  

No  new  facts  were  taken  into  consideration.   The  High  Court  

adjudicated upon the matter vide an order dated 14.2.2006, whereby  

Civil Order nos. 3039 and 3040 of 2002 were jointly disposed of.  The  

different  perspectives  and  angles  within  the  framework  of  which  the  

High  Court  examined  the  controversy,  are  being  briefly  narrated  

hereunder:-

(i) The High Court excluded various facts taken into consideration by  

the Arbitrator.  For excluding certain facts from consideration, the view  

38

Page 39

of the High Court was, that the factual position introduced by Pratima  

Chowdhury by filing a rejoinder before the Arbitrator, could not be taken  

into consideration.  The consideration of the High Court was recorded in  

the impugned order dated 14.2.2006, as under:-

“After service of copy of the written statement, the plaintiff before  the  learned  Arbitrator  filed  a  rejoinder  thereby  attempting  to  introduce certain facts.  But the learned Tribunal  observed that  there could be no scope for filing of such rejoinder either under  the  Code  of  Civil  Procedure  or  under  the  West  Bengal  Co- Operative Societies Rules.”

In fact, on the instant aspect of the matter the High Court, adopted as  

correct the following observations recorded in the order passed by the  

Co-operative Tribunal:-

“It  has to  be clearly  stated  that  under  no provision  of  law the  plaintiff  can  be  allowed  to  submit  a  rejoinder  to  the  written  statement  of  the  defendant  and  the  facts  introduced  in  the  rejoinder  were illegally  taken note of  by the Ld.  Arbitrator  and  whatever  evidence  she  introduced  to  translate  that  rejoinder  cannot be legally accepted.”

(ii) The  High  Court  was  of  the  view,  that  the  stance  adopted  by  

Pratima Chowdhury was impermissible under the principle of justice and  

equity, the doctrine of fairness, as also, the doctrine of estoppel.  This  

aspect of the matter came to be examined in the following manner:-

“After  due  consideration  of  all  relevant  facts  and  materials  it  appears that  there could be very little  scope for the society  to  recall  its  stand  just  because  after  about  three  years,  Pratima  Chwodhury  decided otherwise.   In  fact  resolution  of  the  dated  14.2.1993 was forwarded to the Deputy Registrar, Co-operative  Societies with recommendation for transfer of flat and shares in  favour  of  Kalpana Mukherjee  as far  back as on 10.3.1993.   It  appears that the Deputy Registrar, Co-operative Societies, asked  for certain document on 26.7.1993, which were submitted by the  society  on  22.9.1993.   Thereafter,  membership  of  Kalpana  Mukherjee in place of Pratima Chowdhury was approved.  Thus,  backing out by Pratima Chowdhury after about three years of her  own  consistent  request  for  transfer  in  favour  of  Kalpana  Mukherjee and her request to C.E.S.C. to transfer electric meter,  

39

Page 40

cannot have any support in the eyes of law.  Pratima Chowdhury  also  did  not  bother  to  intimate  Kalpana  Mukherjee  while  requesting the society for necessary action in view of her change  of mind.  This is against the doctrine of fairness.  Lord Dening in  his book, The Discipline of Law, 7th Reprint, page 223, observed:

“It is a principle of justice and of equality.  It comes to this,  when a man by his words or conduct has led another to  believe that he may safely act on the faith of them – and  the other does act on when it would be unjust or inequitable  for him to do so.”

In the words of Dixon, J.:-

“The principle upon which estoppel in pais is founded is that the  law should  not  permit  an unjust  departure  by a  party  from an  assumption of fact which he has caused another party to adopt or  accept for the purpose of their legal relations.”

The said principle was further stretched to the following extent:-

“At any rate, it applies to an assumption of ownership or absence  of ownership.  This gives rise to what may be called proprietary  estoppel.  There are many cases where he is not the owner, or, at  any rate, is not claiming an interest therein, or that there is no  objection to what the other is doing.  In such cases, it has been  held repeatedly that the owner is not to be allowed to go back on  what he has led the other to believe.  So much so that his own  title to the property, be it land or goods, has been held to limited  or extinguished, and new rights and interest have been created  therein.  And this operates by reason of his conduct what he was  led the other to believe even though he never intended it.”

It may be said that even in absence of actual  promise, if a person by his words or conduct, so behaves as to  lead another to believe that he will  not insist on his strict legal  rights, knowing or intending that the other will act on that belief  and he does so act, that again will raise an equity in favour of the  other, and it is for a court to equity to say in what way the equity  may  be  satisfied.   An  equity  does  not  necessarily  depend  on  agreement  but  on words  or  conduct.   The Privy  Council  in  V.  Wellington Corporation observed that the Court must look at the  circumstances in each case to decide in what way the equity can  be satisfied.”

(iii) The  High  Court  expressly  approved  the  manner  in  which  the  

controversy had been examined by the Co-operative Tribunal, by taking  

40

Page 41

into  consideration the past  relationship  between the parties,  and the  

souring  of  the  relationship  between  the  two  spouses,  i.e.,  Partha  

Mukherjee and Sova Mukherjee.  Having examined the dispute in the  

aforesaid prospective, the High Court observed as under:-

“On behalf of the petitioner it was also submitted that the learned  Tribunal failed to appreciate the findings of the learned Arbitrator  arrived at  after  proper appreciation of  the evidence in the said  proceeding.  The learned Tribunal seem to be in agreement with  the view that the document dated 13.11.1992 cannot be called as  a  proper  and  complete  document  of  transfer.   The  learned  Tribunal, thereafter explored as to whether such a document is at  all necessary for effecting transfer of an apartment by a member  to another person.  Relying upon the letters dated 29.6.1992 and  11.11.1992  and  quite  rightly,  without  attempting  to  read  more  than what meets the eyes, the learned Tribunal held that Pratima  Chowdhury by such letters, expressed her desire to transfer the  flat in favour of her nominee Kalpana Mukherjee.  This was quite  relevant in the context of relationship between two families arising  out of the marital tie.  It cannot be said that the learned Tribunal  was not at all  justified in observing that in the backdrop of the  present case, payment of consideration could not be the decisive  factor.”

(iv) On  the  subject  of  passing  of  consideration,  the  High  Court  

principally accepted the view propounded by the Co-operative Tribunal.  

The  High  Court  made  the  following  observations  on  the  issue  of  

consideration:-

“The  learned  Tribunal  appears  to  have  considered  the  aspect  relating to transfer of flat in proper perspective.  Nothing could be  placed before this  Court  so as to justify  brushing  aside of  the  observation of the learned Tribunal that “neither the Act nor the  rule  rules  out  transfer  by  gift  or  will.   But  the  Rule  does  not  provide the manner of transfer, nor does it mandate that transfer  has to be effected by any of the modes necessary as provided for  in  the Transfer  of  Property  Act.   The transferee  has to  be an  allottee or a re-allottee.”

On  perusal  of  the  impugned  judgment,  it  is  found that  the learned Tribunal  referring  to Rule 201(3)  of  the  West  Bengal  Co-operative  Societies  Rule,  1974  and  relevant  Rule  of  1987  observed  that  the  question  of  payment  of  

41

Page 42

consideration money is primarily and purely a matter between the  transferor  and the transferee.  It  was held that “deletion of the  Rule 201 (3) from the present Rule of 1987 clearly fortifies the  position  of  the society  which effected  transfer  on the repeated  request  of  the  respondent  no.  1  in  full  compliance  with  the  provisions  of  the  Act  and  the  Rules.   This  being  so,  for  a  transferee  to  hold  possession  is  required  the  certificate  of  allotment, not a deed of conveyance from the transferor”.”

Significantly  enough  the  learned  Tribunal  mentioned about the manner in which Pratima Chowdhury got the  flat  from  the  original  member,  Smt.  Indrani  Bhattacharya  and  wondered as to how then there could be any grievance in regard  to  the  transfer  by  the  said  Pratima  Chowdhury  in  favour  of  Kalpalan  Mukherjee.   The  story  of  giving  money  to  Partha  Mukherjee  by  way  of  loan  could  not  be  established  to  the  satisfaction of the judicial conscience of the learned Tribunal and  for reasons as mentioned in the impugned judgment, the learned  Tribunal did not choose to brush aside the assertions made on  behalf  of  Kalpana  Mukherjee  that  shares  amounting  to  Rs.4,29,000/- were transferred in favour of Pratima Chowdhury.  Controversy  relating  to  alleged  non-payment  of  consideration  money, in the facts and circumstances of the present case, were  not seen to have nay legs, to stand upon.”

 Having recorded the aforesaid findings, the High Court in its conclusion  

recorded the following observations:-

“But,  as  observed  earlier,  the  judgment  and  order  under  challenge does not seem to be suffering from any such infirmity  or jurisdictional error, which calls for or justifies any interference  by this Court.”

Based on the analysis of the controversy in the manner summarized  

hereinabove, the High Court dismissed the challenge raised by Pratima  

Chowdhury by a common order dated 14.2.2006.  The common order  

passed by the Co-operative Tribunal dated 16.5.2002, and the common  

order  passed  by  the  High  Court  dated  14.2.2006  were  assailed  by  

Pratima Chowdhury by filing Special Leave to Appeal (Civil) no. 15252  

of 2006.

24. Leave granted.

42

Page 43

25. The factual  narration  recorded by us,  the circumstances  taken  

into consideration by the Arbitrator, and the Co-operative Tribunal, as  

also, the analysis of the High Court have all been detailed hereinabove.  

Suffice it to state, that there were no further facts besides those already  

referred to hereinabove, which were brought to our notice during the  

course  of  hearing.   It  is  also  not  necessary  for  us  to  record  the  

submissions advanced at the hands of the learned counsel for the rival  

parties.  All that needs to be mentioned is, that the same submissions  

as were put forward by the respective parties hitherto before, came to  

be addressed before this Court as well.  We shall, therefore, venture to  

examine the veracity of the propositions advanced on behalf of the rival  

parties  by  compartmentalizing  the  submissions  advanced  before  us  

under different principles of law.  We would thereupon record our final  

conclusions.

26. First and foremost, it surprises us that Co-operative Tribunal, as  

also, the High Court excluded from consideration, the factual position  

expressed in the rejoinder filed by the appellant (before the Arbitrator).  

In  excluding  the aforesaid  factual  position,  the Co-operative  Tribunal  

and the High Court did not rely on any provision of law nor was any  

reliance  placed  on  any  principle  accepted  and  recognized  in  legal  

jurisprudence.   It  is  not  a  matter  of  dispute,  that  after  Kalpana  

Mukherjee and the Society were permitted to file written replies before  

the  Arbitrator,  the  rejoinder  filed  thereto  on  behalf  of  Pratima  

Chowdhury, was permitted to be taken on record.  It is not in contention,  

that in the written replies filed before the Arbitrator, Kalpana Mukherjee  

43

Page 44

had  adopted  inter  alia  the  stance,  that  consideration  was  paid  to  

Pratima Chowdhury in lieu of the transfer of flat no. 5D to her name,  

even though the documents relied upon by the rival parties, expressed  

otherwise.  A number of documents not mentioned in the Dispute Case  

filed  by  Pratima  Chowdhury  were  also  relied  upon  by  Kalpana  

Mukherjee.   Pleadings  between  the  parties  could  be  considered  as  

complete,  only  after  Pratima  Chowdhury  was  permitted  to  file  a  

rejoinder (in case she desired to do so).  She actually filed a rejoinder  

which  was  taken  on  record  by  the  Arbitrator.   Both  parties  were  

permitted to lead evidence, not only on the factual position emerging  

from the complaint filed by Pratima Chowdhury and the written replies  

filed in response thereto (by Kalpana Mukherjee, and the Society), but  

also,  the  factual  position  highlighted  by  Pratima  Chowdhury  in  her  

rejoinder affidavit.  It is, therefore, not on the basis of the pleadings of  

the parties, but also on the basis of the evidence led in support of the  

aforesaid pleadings, that the Arbitrator had recorded his findings in his  

award dated 5.2.1999.  We are therefore of the view, that the Arbitrator  

had acted  in  accordance with  law,  and therefore  the exclusion  from  

consideration, of the factual position asserted by Pratima Chowdhury in  

her  rejoinder,  by  the  Co-operative  Tribunal  and the  High  Court  was  

wholly unjustified.  The factual narration by Pratima Chowdhury, could  

not be excluded from consideration, while adjudicating upon the rival  

claims  between  Pratima  Chowdhury  and  Kalpana  Mukherjee.   The  

instant aspect of the decision of the High Court, is therefore liable to be  

set aside, and is accordingly set aside.  Just the instant determination,  

44

Page 45

would  result  in  a  whole  lot  of  facts  which  were  not  taken  into  

consideration  by  the  adjudicating  authorities,  becoming  relevant.  

Despite  that,  we  feel,  that  remanding  the  matter  for  a  denovo  

consideration,  would  place  a  further  burden  on  the  parties.   Having  

heard learned counsel at great length, we shall settle the issues finally,  

here and now.  

27. The  Co-operative  Tribunal  in  its  order  dated  16.5.2002  had  

invoked the principle of estoppel, postulated in Section 115 of the Indian  

Evidence Act.  The High Court affirmed the conclusions drawn by the  

Co-operative Tribunal.  In addition to the above principle, the High Court  

invoked  the  principles  of  equity  and  fairness.   Insofar  as  the  latter  

principles are concerned, we shall delve upon them after examining the  

contentions of  the rival parties,  as equity and fairness would depend  

upon  the  entirety  and  totality  of  the  facts.   The  above  aspect  can  

therefore only  be determined after  dealing with the intricacies  of  the  

factual circumstances involved.  We shall, however, endeavour to deal  

with the principle of estoppel, so as to figure whether, the rule contained  

in Section 115 of the Indian Evidence Act could have been invoked, in  

the facts and circumstances of the present case.  Section 115 of the  

Indian Evidence Act is being extracted hereinabove:-

“115. Estoppel.- When one person has, by his declaration, act or  omission, intentionally caused or permitted another person  to believe a thing to be true and to act upon such belief,  neither he nor his representative shall be allowed, in any  suit or proceeding between himself and such person or his  representative, to deny the truth of that thing.  

Illustration

45

Page 46

A intentionally and falsely leads B to believe that certain  land belongs to A, and thereby induces B to buy and pay  for it. The land afterwards becomes the property of A, and  A seeks to set aside the sale on the ground that, at the time  of the sale, he had no title. He must not be allowed to prove his  want of title.”

It needs to be understood, that the rule of estoppel is a doctrine based  

on fairness.  It postulates, the exclusion of, the truth of the matter.  All,  

for the sake of fairness.  A perusal of the above provision reveals four  

salient pre conditions before invoking the rule of estoppel.  Firstly, one  

party  should  make  a  factual  representation  to  the  other  party.  

Secondly,  the other party  should accept and rely upon the aforesaid  

factual  representation.  Thirdly,  having relied on the aforesaid factual  

representation, the second party should alter his position.  Fourthly, the  

instant altering of position, should be such, that it would be iniquitous to  

require  him  to  revert  back  to  the  original  position.   Therefore,  the  

doctrine of estoppel would apply only when, based on a representation  

by the first party, the second party alters his position, in such manner,  

that it would be unfair to restore the initial position.  In our considered  

view,  none  of  the  ingredients  of  principle  of  estoppel  contained  in  

Section 115 of the Indian Evidence Act, can be stated to have been  

satisfied, in the facts and circumstances of this case.  Herein, the first  

party has made no representation.  The second party has therefore not  

accepted any representation made to her.   Furthermore,  the second  

party has not acted in any manner, nor has the second party altered its  

position.  Therefore, the question whether the restoration of the original  

position  would be iniquitous  or  unfair  does  not  arise at  all.   Even if  

consideration  had  passed  from  Kalpana  Mukherjee  to  Pratima  

46

Page 47

Chowdhury,  on  the  basis  of  the  representation  made  by  Pratima  

Chowdhury,  we  could  have  accepted  that  Kalpana  Mukherjee  had  

altered her position.  In the facts as they have been presented by the  

rival parties, especially in the background of the order passed by the  

Arbitrator, that no consideration had passed in lieu of the transfer of the  

flat, and especially in the background of the factual finding recorded by  

the  Co-operative  Tribunal  and  the  High  Court,  that  passing  of  

consideration in the present controversy was inconsequential, we have  

no hesitation whatsoever in concluding, that the principle of  estoppel  

relied upon by the Co-operative Tribunal and the High Court, could not  

have been invoked, to the detriment of Pratima Chowdhury, in the facts  

and circumstances of the present case.  Insofar as the instant aspect of  

the matter is concerned, the legal position declared by this Court fully  

supports  the  conclusion  drawn  by  us  hereinabove.   In  this  behalf,  

reference may be made, firstly, to the judgment rendered by this Court  

in Kasinka Trading vs. Union of India, (1995) 1 SCC 274, wherein this  

Court noticed as under:-

“11. The  doctrine  of  promissory  estoppel  or  equitable  estoppel  is  well  established  in  the  administrative  law  of  the  country.  To  put  it  simply,  the  doctrine represents a principle evolved by equity to avoid  injustice.  The basis of the doctrine is that where any party  has by his  word  or  conduct  made to  the other  party  an  unequivocal promise or representation by word or conduct,  which is intended to create legal relations or effect a legal  relationship  to  arise  in  the  future,  knowing  as  well  as  intending that the representation, assurance or the promise  would be acted upon by the other  party  to  whom it  has  been  made and has  in  fact  been so  acted  upon by  the  other  party,  the  promise,  assurance  or  representation  should  be binding  on  the party  making  it  and  that  party  should not be permitted to go back upon it, if it would be  

47

Page 48

inequitable  to  allow  him  to  do  so,  having  regard  to  the  dealings, which have taken place or are intended to take  place between the parties.”

(emphasis is ours)

The above sentiment recorded in respect of the principle of estoppel  

was noticed again by this Court in Monnet Ispat & Energy Ltd. vs. Union  

of  India  & Ors.,  (2012)  11  SCC 1,  wherein  this  Court  expressed its  

views in respect of the principle of estoppel as under:-

“289. As we have seen earlier, for  invoking the principle of promissory estoppel there has to  be a promise, and on that basis the party concerned must  have acted to its prejudice.”

(emphasis is ours)

The ingredients of  the doctrine of  estoppel  in the manner expressed  

above were also projected in H.S. Basavaraj (D) by his LRs. & Anr. Vs.  

Canara Bank & Ors., (2010) 12 SCC 458, as under:-

“30. In  general  words,  estoppel  is a principle applicable when one person induces another  or  intentionally  causes  the  other  person  to  believe  something  to  be  true  and to  act  upon  such belief  as  to  change his/her position. In such a case, the former shall be  estopped from going back on the word given. The principle  of estoppel is, however, only applicable in cases where the  other  party  has  changed  his  position  relying  upon  the  representation thereby made.”

(emphasis is ours)

As already noticed hereinabove, none of the ingredients of estoppel can  

be culled out from the facts and circumstances of the present case.  In  

view  of  above,  we  hereby  set  aside  the  determination  by  the  Co-

operative  Tribunal,  as  also  the  High  Court,  in  having  relied  on  the  

principle of estoppel, and thereby, excluding the pleas/defences raised  

by Pratima Chowdhury to support her claim.

48

Page 49

28. The admitted factual position in the present controversy,  in our  

considered  view,  is  absolutely  clear  and  unambiguous.   Had  the  

different adjudicating authorities taken into consideration the undisputed  

factual  position,  there  ought  not  to  have  been  much  difficulty  in  

resolving the difficulty.  We shall highlight a few relevant admitted facts  

which crossed our mind while hearing the matter and whilst recording  

the order:-

(i) The  reason  for  transferring  flat  no.  5D indicated  in  the  letters  

dated  11.11.1992  and  13.11.1992  was  on  account  of  the  close  

relationship  between  Pratima  Chowdhury  and  Kalpana  Mukherjee,  

which was expressed by observing “…my nominee Kalpana,  a close  

relative of mine…”.  As a matter of fact, there was no close relationship  

between  Pratima  Chowdhury  and  Kalpana  Mukherjee.   Pratima  

Chowdhury,  is  indicated  to  have  been  living  in  Bombay  and  never  

visiting Calcutta.  Kalpana Mukherjee is a resident of Calcutta, who was  

in  employment  at  Calcutta,  and  had  started  to  reside  with  her  son  

Partha Mukherjee, after he moved to Calcutta alongwith his wife Sova  

Mukherjee.   There  was  no  direct  relationship  between  Pratima  

Chowdhury and Kalpana Mukherjee.  Pratima Chowdhury’s niece Sova  

Mukhrjee was married to Partha Mukherjee, son of Kalpana Mukherjee.  

The  only  relationship  that  can  be  assumed,  is  of  aunty  and  niece,  

between Pratima Chodhury and Sova Mukherjee.  If on account of love  

and affection, for her niece, Pratima Chowdhury desired to transfer flat  

no. 5D which she had purchased for a consideration of Rs.4 lakhs, she  

would have done so by transferring it to the name of her niece Sova  

49

Page 50

Mukherjee.   Affinity  to  Sova Mukherjee,  and  the  love,  affection  and  

welfare of Sova Mukherjee, would not extend to a gesture of the nature  

under  reference,  i.e.,  by  way  of  transfer  of  immovable  property,  of  

substantial value, without consideration, to the mother in law of Sova  

Mukherjee.   Therefore,  factually  the  expression  of  close  relationship  

between Pratima Chwodhury and Kalpana Mukherjee depicted in letters  

dated  11.11.1992  and  13.11.1992  are  on  the  face  of  it,  false  and  

incorrect.   It  is,  therefore,  improper for the adjudicating authorities to  

have accepted the factum of close relationship of the parties, in so far  

as, the transfer of flat no. 5D, is concerned.

(ii) There  is  hardly  any  justification  for  having  accepted  another  

important factual position depicted in the letters dated 11.11.1992 and  

13.11.1992.  In this behalf, our reference is to the fact that flat no. 5D  

was  sought  to  be  transferred  by  Pratima  Chowdhury  to  Kalpana  

Mukherjee,  without  consideration.   First  and  foremost,  the  aforesaid  

factual  position  is  not  acceptable  on  account  of  the  statement  of  

Kalpana  Mukherjee  herself.   In  the  written  reply  filed  before  the  

Arbitrator,  Kalpana  Mukherjee  took  the  express  stance,  that  Pratima  

Chwodhury  had transferred flat  no.  5D to her  name,  by accepting a  

consideration of Rs.4,29,000/-.  She further asserted, that the aforesaid  

consideration  had  passed  from  Kalpana  Mukherjee  to  Pratima  

Chowdhury  through  Partha  Mukherjee.   According  to  Kalpana  

Mukherjee, Partha Mukherjee transferred shares in his name valued at  

Rs.4,29,000/-, to the name of Pratima Chowdhury.  Per se therefore,  

even Kalpana Mukherjee denied the factual  position indicated in the  

50

Page 51

above letters,  whereby flat no. 5D was transferred from the name of  

Pratima Chowdhury, to that of Kalpana Mukherjee.

(iii) The letters dated 11.11.1992 and 13.11.1992 expressly recorded,  

that the factual position narrated in the above letters was on account of  

“compliance  with  the  rules  regulating  such  transfer,  and  also,  for  

avoiding future complications”.  In view of the factual position noticed in  

the  foregoing  paragraphs,  it  is  apparent,  that  false  facts  were  being  

recorded  for  compliance  with  the  rules  and  regulations,  as  also,  for  

avoiding  future  complications.   One  would  have  appreciated  the  

recording of  consideration in lieu of  the transfer of property from the  

name of  Pratima Chowdhury  to that  of  Kalpana Mukherjee,  to avoid  

future complications, rather than withholding the same.  It is clearly not  

understandable,  what  kind  of  complications  were  being  avoided.  

Expressing  the above factual  position  in  the letters  under  reference,  

makes  the  whole  transaction  suspicious,  mistrustful  and  possibly  

fraudulent too.  In the absence of any relationship, the party benefiting  

from  the  letters  dated  11.11.1992  and  13.11.1992,  would  have  

successfully  avoided  all  complications  merely  by  incorporating  

consideration,  which  was  to  pass  from  Kalpana  Mukherjee  to  the  

transferee Pratima Chowdhury.  If consideration was to pass, and had  

actually passed, it is difficult to understand why the parties would say,  

that  the  transaction  did  not  involve  passing  of  consideration.   It  is  

therefore clear, that all the ingredients of letter dated 11.11.1992 and  

13.11.1992  are  shrouded  in  suspicious  circumstances.   One  is  

prompted  to  record  herein,  that  it  was  not  legitimately  open  to  the  

51

Page 52

parties  to record in the letters under  reference,  that  flat  no.  5D was  

being gifted by Pratima Chowdhury to Kalpana Mukherjee, on account  

of  lack  of  proximity  between  the  parties.   The  transfer  of  the  said  

property by one to the other, by way of gift, would obviously have been  

subject to judicial interference, as the same would at least prima facie,  

give  the  impression  of  dubiety.   It  was  therefore,  that  Kalpana  

Mukherjee hastened to adopt a different factual position in her written  

reply before the Arbitrator.

(iv) It  is  relevant  to  mention,  that  in  the  written  statement  filed by  

Kalpana  Mukherjee  (before  the  Arbitrator)  the  stand  adopted  by  her  

was,  that  a  consideration  of  Rs.4,29,000/-  had  passed  from  her  to  

Pratima Chowdhury, by way of transfer of shares (standing in the name  

of her son, Partha Mukherjee) to the name of Pratima Chowdhury.  In  

this behalf it would be relevant to notice, that the documents of transfer  

executed between Pratima Chowdhury  and Kalpana Mukherjee were  

dated  11.11.1992  and  13.11.1992.   Based  thereon,  the  Board  of  

Directors of the Society, in its meeting held on 14.2.1993, resolved to  

accept the resignation of Pratima Chowdhury.  It was further resolved,  

to accept the membership of Kalpana Mukherjee in her place.  On the  

date of execution of the documents under reference, as also on the date  

of passing of the resolution by the Board of Directors of the Society,  

Partha Mukherjee did not have any shares in his name.  The shares  

which Partha Mukherjee acquired, and which Kalpana Mukherjee claims  

to have been transferred in lieu of consideration (to the name of Pratima  

Chowdhury), were shown to have been acquired on or after 8.9.1993.  

52

Page 53

The dates of acquisition of the said shares, as were recorded in the  

order passed by the Arbitrator,  which position has not been disputed  

before us, are as follows:-

“COMPANY’S NAME NO. OF SHARES ACQUIRED  

Tata Chemicals Ltd. 50 nos. 8.9.93 Tata Chemicals Ltd. 450 nos. 27.10.93 Siemens 50 nos. 2.8.93 Indian Aluminium 500 nos. 4.3.94 I.T.C. Hotels 100 nos. acquired with Mr.  

H.P. Roy 4.4.94”

It is therefore apparent, that Partha Mukherjee did not even have the  

shares referred to by the transferee Kalpana Mukherjee, in his name,  

when  the  transfer  documents  were  executed  on  11.11.1992  and  

13.11.1992, or even on 14.2.1993 when the Board of Directors of the  

Society, passed the transfer resolution.  The above shares are shown to  

have  been  transferred  to  the  name  of  Pratima  Chowdhury  on  

16.12.1994.   Well  before  16.12.1994,  even  according  to  the  stance  

adopted by Kalpana Mukherjee, Pratima Chowdhury had executed all  

the transfer documents.  It is therefore difficult to accept, that the parties  

had agreed to pass on consideration by transfer of shares, which were  

not even owned by Kalpana Mukherjee (through Partha Mukherjee) on  

the date of transfer of flat no. 5D from Pratima Chowdhury to Kalpana  

Mukherjee.  In sum and substance therefore, on undisputed facts, the  

stance adopted by Kalpana Mukherjee in the written statement filed by  

her before the Arbitrator, is shown to be false.  This aspect of the matter  

would  bring  out  a  legitimate  query,  namely,  why  should  Kalpana  

Mukherjee  have  adopted  a  false  stance,  contrary  to  the  expressed  

53

Page 54

position in the letters dated 11.11.1992 and 13.11.1992.  This further  

exposes, the suspicious nature of the transfer transaction.

(v) On the  subject  of  transfer  of  shares from the name of  Partha  

Mukherjee  to  the  name  of  Pratima  Chowdhury,  which,  according  to  

Kalpana  Mukherjee  constituted  passing  of  consideration  to  Pratima  

Chowdhury (in lieu of the transfer of flat no. 5D).  Pratima Chowdhury  

had adopted the stance, that the transfer of the above shares was on  

account of return of loans extended by Pratima Chowdhury to Partha  

Mukherjee.   Insofar as the instant aspect of  the matter is concerned  

Pratima  Chowdhury  had  asserted,  that  after  the  transfer  of  Partha  

Mukherjee from Calcutta to Bombay in the year 1993, he gave up his  

employment   with  Colgate  Palmolive  (India)  Limited,  and  started  a  

business of aluminium products with one R.K. Sen, at Bombay.  To help  

Partha Mukherjee with his above business venture, Pratima Chowdhury  

had (on the asking of Partha Mukherjee) paid a sum of Rs. 2 lakhs by  

way of cheque,  to Bharat  Aluminium Company Limited, for supply of  

raw  materials  to  Partha  Mukherjee’s  business  venture.   It  was  also  

pointed out, that Partha Mukherjee had also taken a loan for a sum of  

Rs. 1,50,000/- for the same purpose from Bani Roy (sister of Pratima  

Chowdhury).  It was also asserted, that Sova Mukherjee had similarly  

extended  loans,  by  making  payments  through  cheque  to  Partha  

Mukherjee.  The Arbitrator had accepted the above assertion of Pratima  

Chowdhury.   For  the above determination,  the Arbitrator  had placed  

reliance,  on  documentary  and  oral  evidence,  produced  by  Pratima  

Chowdhury.   The  instant  factual  aspect  of  the  matter  was  totally  

54

Page 55

overlooked by the Co-operative Tribunal, as well as, by the High Court.  

Keeping in view the factual position depicting in paragraph (iv) above,  

we  have  no  doubt  in  our  mind,  that  there  was  substance  in  the  

determination  of  the  Arbitrator,  specially  on  account  of  the  fact  that  

transfer of shares from the name of Partha Mukherjee to the name of  

Pratima Chowdhury came to be effected, well after the transfer of flat  

no. 5D to the name of Kalpana Mukherjee.  For the above reason as  

well, the findings of fact recorded by the Co-operative Tribunal as well  

as  by  the  High  Court,  are  bound  to  be  considered  as  having  been  

recorded without taking into consideration all the material and relevant  

facts.

(vi) The fact that Pratima Chowdhury had addressed a letter to the  

Secretary of the Society, dated 28.2.1995, for withdrawal of her earlier  

letter  dated 11.11.1992,  is not  in  dispute.   It  is  also not  a matter  of  

dispute, that at the time when Pratima Chowdhury addressed the above  

letter, neither the transfer of membership, nor the transfer of the flat,  

had assumed finality.  The transfer of membership, as also the transfer  

of the flat, would assume finality only upon the approval of the same by  

the  Deputy  Registrar,  Co-operative  Societies.   The  factual  position  

emerging from the record of the case reveals, that the Society sought  

the  approval  of  the  Deputy  Registrar,  Co-operative  Societies  for  the  

transfer of membership,  as also, flat no. 5D to the name of Kalpana  

Mukherjee on 13.3.1995.  Undoubtedly, Pratima Chowdhury had sought  

revocation, before the transfers under reference had assumed finality.  

It is in the above background, that one needs to evaluate the reply of  

55

Page 56

the  Society  dated  10.4.1995.  Through  the  letter  dated  10.4.1995,  

Pratima Chowdhury was informed, that the Society had no authority to  

look into the matter, after the resolution of the Board of Directors dated  

2.4.1995.  We find the above explanation, untenable.  It was imperative  

for the Society to have examined the withdrawal letter dated 28.2.1995,  

the matter certainly had not been concluded.  Well after the withdrawal  

letter,  the  Society  by  its  notice  dated  16.4.1995  had  intimated  its  

members,  about  the  resolution  dated  2.4.1995.    The  matter  was,  

therefore,  pending authoritative conclusion.   Thus viewed,  it  was not  

justified for the Society to deny consideration of the withdrawal letter  

dated 28.2.1995.  Acceptance or rejection on merits is another matter,  

but  non-consideration  is  not  understandable.   The  instant  non-

consideration clearly invalidates the resolution passed by the Society.

(vii) On  22.3.1995,  Pratima  Chowdhury  addressed  a  letter  to  the  

Deputy  Registrar,  Co-operative  Societies,  imploring  him  to  take  

appropriate  action,  by  considering  the  withdrawal  letter  dated  

28.2.1995.  We are surprised, that the Deputy Registrar, Co-operative  

Societies adopted the same stance,  as was adopted by the Society.  

When  the  letter  dated  22.3.1995  was  addressed  to  the  Deputy  

Registrar, Co-operative Societies, it had not yet granted approval to the  

recommendations made by the Society.  The receipt of the letter dated  

28.2.1995,  by  the  Society  (as  also  the  receipt  of  the  letter  dated  

22.3.1995,  by the Deputy Registrar,  Co-operative Societies) is not in  

dispute.  It is imperative for us therefore to conclude, that the decision  

taken  by  the  Deputy  Registrar,  Co-operative  Societies  was,  without  

56

Page 57

reference to the withdrawal letter dated 28.2.1995 (which was enclosed  

with the letter dated 22.3.1995 addressed to the Deputy Registrar, Co-

operative  Societies).   The  determination  by  the  Deputy  Registrar,  

Cooperative  Societies,  cannot  therefore  be  treated  as  a  valid  and  

legitimate consideration.  Acceptance or rejection on merits is another  

matter, but non-consideration is just not understandable.  The instant  

non-consideration  clearly  invalidates  the  approval  granted  by  the  

Deputy Registrar, Co-operative Societies.

(viii) The veracity of the execution of the documents dated 11.11.1992  

and  13.11.1992  by  Pratima  Chowdhury,  was  also  examined  by  the  

Arbitrator.   In  the  above  examination,  the  Arbitrator  arrived  at  the  

conclusion, that Pratima Chowdhury was in Bombay and not in Calcutta  

when the above documents  were executed.   The above finding was  

recorded on the basis  of  three  witnesses produced on behalf  of  the  

complainant  (before  the  Arbitrator).   While  rejecting  the  conclusion  

drawn  by  the  Arbitrator,  the  Co-operative  Tribunal  overlooked  the  

statements of the witnesses produced by Pratima Chowdhury, merely  

because  the  notary  was  an  Advocate.   The  Co-operative  Tribunal  

reasoned, that the statement of S.N. Chatterjee, an Advocate, had to be  

given  more  weightage,  than  the  witnesses  produced  by  Pratima  

Chowdhury.  The above determination at the hands of the Co-operative  

Tribunal, besides being perverse, is also totally unacceptable in law.  In  

the facts and circumstances of the present case, the statement of the  

notary should have been rejected and discarded, simply because the  

notary in his deposition had acknowledged, that he did not issue any  

57

Page 58

notarial  certificate  in  terms  of  Section  8  of  the  Notary  Act.   In  the  

absence  of  issuance  of  any  such  certificate,  notarization  of  the  

document  dated  13.11.1992  was  clearly  subject  to  suspicion.   The  

conclusion drawn by the Co-operative Tribunal as also the High Court,  

to  the  effect  that  the  document  dated  13.11.1992  was  executed  at  

Calcutta, is therefore, based on no evidence whatsoever.  The fact that  

the document dated 13.11.1992 had not been executed in Calcutta, was  

also sought to be substantiated by showing, that the registration number  

of the Society was not depicted in the said letter, even though the said  

letter  was  shown  to  have  been  executed  at  the  residence  of  the  

Secretary  of  the  Society.  It  was reasoned,  that  the Secretary  of  the  

Society  would  have  supplied  the  aforesaid  number,  if  the  above  

document  had been executed at  his  residence.   Having rejected the  

credibility of the statement of S.N. Chatterjee (the notary), and having  

not  accepted the fact  that  the above document  was executed at  the  

residence of Anil Kumar Sil, the Secretary of the Society, we find no  

reason  for  not  accepting  the  statements  of  the  three  witnesses  

produced  by  Pratima  Chowdhury,  to  show  that  she  (Pratima  

Chowdhury) was at Bombay on 11.11.1992, as well as, on 13.11.1992.  

Herein again, the Cooperative Tribunal and the High Court, erred on the  

face  of  the  record,  by  not  taking  into  consideration  material  facts,  

available on the file of the case.

(ix) In  the  background  of  the  factual  position  emerging  from  the  

deliberations recorded hereinabove, it is also necessary to notice, that  

the  Arbitrator  had  placed  heavy  reliance  on  the  fact,  that  Kalpana  

58

Page 59

Mukherjee  had  deposited  rent  on  21.10.1993  (payable  to  Pratima  

Chowdhury), into the account of Pratima Chowdhury, by herself, filling  

up the bank deposit voucher.  Accordingly, the Arbitrator inferred, that  

the property in question, even to the knowledge of Kalpana Mukherjee,  

had not actually been transferred to her name by Pratima Chowdhury  

(at  least  upto  21.10.1993).   That  was  the  reason,  why  Kalpana  

Mukherjee had continued to deposit rent for flat no. 5D, into the account  

of  Pratima Chowdhury  upto 21.10.1993.   Coupled with the aforesaid  

factual aspect, the Arbitrator placed great reliance on the letter dated  

28.10.1993  addressed  by  Partha  Mukherjee  to  Colgate  Palmolive  

(India)  Limited,  wherein,  he  described  Pratima  Chowdhury  as  the  

“landlady”.   Undoubtedly,  if  the  documents  relied  upon  by  Kalpana  

Mukherjee  were  genuine,  Partha  Mukherjee  would  not  have  

acknowledged the ownership of Pratima Chowdhury over flat no. 5D (on  

28.10.1993).  These aspects of the matter were totally overlooked by  

the Co-operative Tribunal, as well as, by the High Court.  These were  

vital  facts,  and  needed  to  be  examined,  if  the  order  passed  by  the  

Arbitrator  was  to  be  interfered  with.   In  the  absence  of  such  

consideration, the findings of fact recorded by the Co-operative Tribunal  

and by the High Court, are bound to be considered as perverse.  Since  

the  factual  position  attributed  to  the  actions  of  21.10.1993  and  

28.10.1993,  which  emanated  and  emerged  from Kalpana  Mukherjee  

and  Partha  Mukherjee  respectively,  we  are  of  the  view  that  entire  

sequence of transfer, is rendered doubtful and suspicious.

59

Page 60

(x) The determination of the Arbitrator, on the subject of the transfer  

of  the covered garage,  to the name of  Kalpana Mukherjee was also  

overlooked by the Co-operative Tribunal, as well as, by the High Court.  

From  the  facts  already  narrated  above,  it  is  clear  that  Pratima  

Chowdhury, had one covered garage space also.  Whilst reference was  

made  about  the  details  of  the  flat  sought  to  be  transferred,  in  the  

transfer  documents,  no  reference  was  made  to  the  covered  garage  

space.  Based on the letter dated 11.11.1992, and the document dated  

13.11.1992,  flat  no.  5D  was  transferred  to  the  name  of  Kalpana  

Mukherjee.  The instant transfer however did not include the covered  

garage space.  Thereafter, based on an agreement executed between  

Kalpana Mukherjee (on the one hand), and the Society (on the other),  

the said covered garage space was transferred to the name of Kalpana  

Mukherjee, on 25.4.1995.  The said transfer was not at the behest of, or  

with the concurrence of Pratima Chowdhury.  Therefore, according to  

the view expressed by the Arbitrator, the covered garage space, must  

be deemed to have never been transferred to Kalpana Mukherje by its  

erstwhile  owner.   The  Arbitrator  also  expressed  the  view,  that  the  

agreement dated 25.4.1995 could not have been executed without the  

participation of Pratima Chowdhury.  The above factual position has not  

been disputed at the hands of Kalpana Mukherjee, before this Court.  

The above reasoning, in our considered view, was fully justified.  The  

instant  aspect  of  the  matter  was  also  totally  overlooked  by  the  Co-

operative Tribunal, as well as, by the High Court.  For the above reason  

60

Page 61

also, the findings of the fact, recorded by the Co-operative Tribunal and  

by the High Court, are bound to be treated as perverse.

29. For all the reasons recorded by us in foregoing sub-paragraphs,  

we are of the view that the Co-operative Tribunal as well as the High  

Court, seriously erred in recording their conclusions.  We are satisfied in  

further recording, that the Arbitrator was wholly justified in allowing the  

Dispute Case filed by Pratima Chowdhury, by correctly appreciating the  

factual and legal position.

30. The Co-operative Tribunal as well as the High Court, had invoked  

the principle of justice and equity, and the doctrine of fairness, while  

recording their eventual findings in favour of Kalpana Mukherjee.  It is,  

therefore,  necessary  for  us,  to  delve  upon  the  above  aspect  of  the  

matter.   Before we venture to examine the instant controversy in the  

above perspective,  it  is  necessary to record a few facts.   It  is not  a  

matter  of  dispute,  that for a long time Pratima Chowdhury had been  

residing at Bombay.  She was residing at Bombay in the house of H.P.  

Roy and Bani Roy. Bani Roy, as stated above, is the sister of Pratima  

Chowdhury.  H.P. Roy is a wealthy person.  Partha Mukherjee son of  

Kalpana Mukherje, is an engineering graduate from IIT, Kharagpur.  He  

also  possesses  the  qualification  of  MBA,  which  he  acquired  from  

Ahmedabad.   Originally  Partha  Mukherjee  was  employed  as  Sales  

Manager/Regional Manager with Colgate Palmolive (India) Limited, at  

Bombay.  Partha Mukherjee married Sova Mukherjee (the daughter of  

H.P. Roy), whilst he was posted at Bombay in 1987.  Soon after his  

61

Page 62

marriage, Partha Mukherjee and Sova Mukherjee also started to live in  

the  house  of  H.P.  Roy  (father-in-law  of  Partha  Mukherjee).   The  

evidence  available  on  the  record  of  the  case  reveals,  that  Pratima  

Chowdhury  treated  Sova  Mukherjee  as  her  daughter,  and  Partha  

Mukherjee as her son.  In 1992, Partha Mukherjee was transferred from  

Bombay to Calcutta.  Immediately on his transfer, Pratima Chowdhury  

accommodated  him  in  flat  no.  5D.  Subsequently,  Colgate  Palmolive  

(India) Limited entered into a lease and licence agreement, in respect of  

flat  no.  5D  with  Pratima  Chowdhury,  so  as  to  provide  residential  

accommodation to Partha Mukherjee (as per the terms and conditions  

of his employment).  Obviously, Partha Mukherjee was instrumental in  

the execution of the above lease and licence agreement.  In order to  

deposit  monthly  rent  payable  to  Pratima  Chowdhury  (by  Colgate  

Palmolive (India) Limited), Partha Mukherjee opened a bank account in  

the name of Pratima Chowdhury, jointly with himself.   He exclusively  

operated the above account,  for deposits  as well  as for withdrawals.  

Not only that, the findings recorded by the Arbitrator indicate that the  

letter dated 11.11.1992 written by Pratima Chowdhury was drafted by  

Partha Mukherjee.  The aforesaid conclusion was drawn from the fact  

that  the  manuscript  of  the  original  was  in  the  handwriting  of  Partha  

Mukherjee.  All the above facts demonstrate, a relationship of absolute  

trust and faith between Pratima Chowdhury and Partha Mukherjee.  The  

aforesaid  relationship  emerged,  not  only  on  account  of  the  fact  that  

Partha Mukherjee was married to Sova Mukherjee (the niece of Pratima  

Chowdhury), but also on account of the fact, that Partha Mukherjee and  

62

Page 63

his wife Sova Mukherjee soon after their marriage lived in the house of  

H.P. Roy (husband of the sister of Pratima Chowdhury).  They resided  

together with Pratima Chowdhury till 1992, i.e., for a period of more than  

a decade, before Partha Mukherjee was transferred to Calcutta.  In our  

considered  view  the  relationship  between  Partha  Mukherjee  and  

Pratima  Chowdhury  would  constitute  a  fiduciary  relationship.   Even  

though all  the above aspects of  the relationship between the parties  

were taken into consideration, none of the adjudicating authorities dealt  

with the controversy,  by taking into account  the fiduciary relationship  

between  the parties.   When parties  are  in  fiduciary  relationship,  the  

manner  of  examining  the  validity  of  a  transaction,  specifically  when  

there is no reciprocal  consideration,  has to be based on parameters  

which  are  different  from  the  ones  applicable  to  an  ordinary  case.  

Reference in this behalf, may be made to the decision rendered by this  

Court in Subhas Chandra Das Mushib vs. Ganga Prosad Das Mushib,  

AIR 1967 SC 878, wherein this Court examined the twin concepts of  

“fiduciary relationship” and “undue influence” and observed as under:

“We may  now proceed  to  consider  what  are  the  essential  in-  gredients of undue influence and how a plaintiff who seeks relief  on this ground should proceed to prove his case and when the  defendant is called upon to show that the contract or gift was not  induced by undue influence. The instant case is one of gift but it  is well settled that the law as to undue influence is the same in  the case of a gift inter- vivos as in the case of a contract.

Under s. 16 (1) of the Indian Contract Act a contract is said to be  induced  by  undue  influence  where  the  relations  subsisting  between  the  parties  are  such  that  one  of  the  parties  is  in  a  position to dominate the will of the other and uses that position to  obtain an unfair  advantage over the other.  This shows that the  court trying a case of undue influence must consider two things to  start with, namely, (1) are the relations between the donor and  

63

Page 64

the donee such that the donee is in a position to dominate the will  of the donor and (2) has the donee used that position to obtain an  unfair advantage over the donor'?

Sub-section (2) of the section is illustrative as to when a person is  to considered to be in a position to dominate the will of another.  These are inter alia (a) where the donee holds a real or apparent  authority over the donor or where he stands in a fiduciary relation  to  the donor  or  (b)  where he makes a contract  with  a  person  whose mental capacity is temporarily or permanently affected by  reason of age, illness, or mental or bodily distress.

Sub-section (3) of the section throws the burden of proving that a  contract  was  not  induced  by  undue  influence  on  the  person  benefiting by it when two factors are found against him, namely  that he is in a position to dominate the will  of another and the  transaction appears on the face of it or on the evidence adduced  to be unconscionable.

The three stages for consideration of a case of undue influence  were expounded in the case of Ragunath Prasad v. Sarju Prasad  and others (AIR 1924 PC 60) in the following words :- "In the first  place the relations between the parties  to each other  must  be  such that one is in a position to dominate the will  of the other.  Once that position is substantiated the second stage has been  reached-namely,  the  issue  whether  the  contract  has  been  induced by undue influence. Upon the determination of this issue  a third point emerges, which is that of the onus probandi. If the  transaction  appears  to  be  unconscionable,  then  the  burden  of  proving that the contract was not induced by undue influence is to  lie upon the person who was in a position to dominate the will of  the other.”

(emphasis is ours)

The subject of fiduciary relationship was also examined by this Court in,  

Krishna Mohan Kul alias Nani Charan Kul vs. Pratima Maity, (2004) 89  

SCC 468, wherein it was held as under:

“…..When fraud, mis-representation or undue influence is alleged  by a party in a suit, normally, the burden is on him to prove such  fraud, undue influence or misrepresentation. But, when a person  is in  a fiduciary relationship  with another and the latter  is in a  position of active confidence the burden of proving the absence of  fraud, misrepresentation or undue influence is upon the person in  the dominating position and he has to prove that there was fair  

64

Page 65

play in the transaction and that the apparent is the real, in other  words that the transaction is genuine and bona fide. In such a  case the burden of proving the good faith of  the transaction is  thrown upon the dominant party, that is to say, the party who is in  a position of active confidence. A person standing in a fiduciary  relation to another has a duty to protect the interest given to his  care  and  the  Court  watches  with  jealously  all  transactions  between  such  persons  so  that  the  protector  may  not  use  his  influence  or  the  confidence  to  his  advantage.  When the  party  complaining  shows  such  relation  the  law presumes  everything  against the transaction and the onus is cast against the person  holding  the  position  of  confidence  or  trust  to  show  that  the  transaction  is  perfectly  fair  and reasonable,  that  no advantage  has been taken of his position. This principle has been engrained  in  Section  111 of  the  Indian  Evidence Act,  1872  (in  short  the  'Evidence Act'). The rule here laid down is in accordance with a  principle long acknowledged and administered in Courts of Equity  in England and America. This principle is that he who bargains in  a matter of advantage with a person who places confidence in  him is bound to show that a proper and reasonable use has been  made of that confidence. The transaction is not necessarily void  ipso  facto,  nor  is  it  necessary  for  those  who  impeach  it  to  establish that there has been fraud or imposition, but the burden  of establishing its perfect fairness, adequacy and equity is cast  upon the person in whom the confidence has been reposed. The  rule  applies  equally  to  all  persons  standing  in  confidential  relations  with  each  other.  Agents,  trustees,  executors,  administrators,  auctioneers,  and  others  have  been  held  to  fall  within the rule. The Section requires that the party on whom the  burden of proof is laid should have been in a position of active  confidence  where  fraud  is  alleged,  the  rule  has  been  clearly  established in England that in the case of a stranger equity will  not set aside a voluntary deed or donation, however, improvident  it  may  be,  if  it  be  free  from the  imputation  of  fraud,  surprise,  undue  influence  and  spontaneously  executed  or  made  by  the  donor  with  his  eyes  open.  Where  an  active  confidential,  or  fiduciary relation exists between the parties, there the burden of  proof is on the donee or those claiming through him. It has further  been laid down that where a person gains a great advantage over  another by a voluntary instrument, the burden of proof is thrown  upon  the  person  receiving  the  benefit  and  he  is  under  the  necessity of showing that the transaction is fair and honest.

13.  In  judging  of  the  validity  of  transactions  between  persons  standing in a confidential relation to each other, it is very material  to see whether the person conferring a benefit on the other had  

65

Page 66

competent and independent advice. The age or capacity of the  person conferring the benefit and the nature of the benefit are of  very great importance in such cases. It is always obligatory for  the donor/beneficiary under a document to prove due execution  of  the  document  in  accordance  with  law,  even  de  hors  the  reasonableness  or  otherwise  of  the transaction,  to avail  of  the  benefit or claim rights under the document irrespective of the fact  whether such party is the defendant or plaintiff before Court.

14.  It  is  now well  established  that  a  Court  of  Equity,  when  a  person  obtains  any  benefit  from  another  imposes  upon  the  grantee the burden, if he wishes to maintain the contract or gift, of  proving that  in fact  he exerted no influence for  the purpose of  obtaining it. The proposition is very clearly started in Ashburner's  Principles of Equity, 2nd Ed., p.229, thus:

"When  the  relation  between  the  donor  and  donee  at  or  shortly before the execution of the gift has been such as to  raise a presumption that the donee had influence over the  donor, the court sets aside the gift unless the donee can  prove that the gift was the result of a free exercise of the  donor's will."”

(emphasis is ours)

The above conclusions recorded by this Court, came to be reiterated  

recently in Anil Rishi Vs. Gurbaksh Singh, (2006) 5 SCC 558.

31. While deciding the proposition in hand, we must keep in mind the  

law declared by this Court on the subject of fiduciary relationship.  We  

will also proceed by keeping in mind, what we have already concluded  

in  the  preceding  paragraph,  i.e.,  that  relationship  between  Partha  

Mukherjee and Pratima Chowdhury was a relationship of faith, trust and  

confidence.  Partha Mukherjee was in a domineering position.  He was  

married to Sova Mukherjee.  Sova Mukherjee is the daughter of H.P.  

Roy.  Pratima Chowdhury has lived for a very long time in the house of  

H.P. Roy.  During that period (after his marriage) Partha Mukherjee also  

66

Page 67

shared the residential accommodation in the same house with Pratima  

Chowdhury,  for  over  a  decade.   In  Indian  society  the  relationship  

between Partha Mukherjee and Pratima Chowdhury, is a very delicate  

and sensitive one.  It is therefore, that Pratima Chowdhury extended all  

help and support to him, at all times.  She gave him her flat when he  

was transferred to Calcutta.  She also extended loans to him, when he  

wanted  to  set  up  an  independent  business  at  Bombay.   These  are  

illustrative  instances  of  his  authority,  command  and  influence.  

Instances  of  his  enjoying  the  trust  and  confidence  of  Pratima  

Chowdhury  include,  amongst  others,  the  joint  account  of  Pratima  

Chowdhury  with  Partha  Mukherjee,  which  the  latter  operated  

exclusively,  and  the  drafting  of  the  letters  on  behalf  of  Pratima  

Chowdhury.  In such fact situation, we are of the view, that the onus of  

substantiating the validity and genuineness of the transfer of flat no. 5D,  

by  Pratima Chowdhury,  through the letter  dated  11.11.1992 and the  

document  dated  13.11.1992,  rested  squarely  on  the  shoulders  of  

Kalpana  Mukherjee.   Because  it  was  only  the  relationship  between  

Partha Mukherjee and Pratima Chowdhury, which came to be extended  

to  Kalpana  Mukherjee.   The  document  dated  13.11.1992  clearly  

expressed, that the above transfer was without consideration.  Kalpana  

Mukherjee in her written reply before the Arbitrator asserted, that the  

above transfer was on a consideration of Rs.4,29,000/-.  The Arbitrator  

in his order dated 5.2.1999 concluded, that Kalpana Mukherjee could  

not  establish  the  passing  of  the  above  consideration  to  Pratima  

Chowdhury.   The  Cooperative  Tribunal,  as  well  as,  the  High  Court,  

67

Page 68

despite the factual assertion of Kalpana Mukherjee were of the view,  

that passing of consideration was not essential in determination of the  

genuineness  of  the  transaction.   We  are  of  the  view,  that  the  

Cooperative Tribunal, as well as, the High Court seriously erred in their  

approach,  to the determination of  the controversy.   Even though the  

onus of proof rested on Kalpana Mukherjee, the matter was examined  

by requiring Pratima Chowdhury to establish all the alleged facts.  We  

are of the view, that Kalpana Mukherjee miserably failed to discharge  

the  burden  of  proof,  which  essentially  rested  on  her.   Pratima  

Chowdhury  led  evidence  to  show,  that  she  was  at  Bombay  on  

11.11.1992  and  13.11.1992.   In  view  of  the  above,  the  letter  dated  

11.11.1992 and the document dated 13.11.1992, shown to have been  

executed at Calcutta could not be readily accepted as genuine, for the  

said  documents  fell  in  the zone of  suspicion,  more so,  because the  

manuscript  of  the letter  dated 11.11.1992 was in the hand-writing of  

Partha Mukherjee.  Leading to the inference, that Partha Mukherjee was  

the author of the above letter.  It is therefore not incorrect to infer, that  

there seems to be a ring of truth,  in the assertion made by Pratima  

Chowdhury,  that  Partha  Mukherjee  had  obtained  her  signatures  for  

executing  the  letter  and  document  referred  to  above.   We  find  no  

justification whatsoever for Pratima Chowdhury, to have transferred flat  

no.  5D  to  Kalpana  Mukherjee,  free  of  cost,  even  though  she  had  

purchased the same for a consideration of Rs. 4 lakhs in the year 1987.  

Specially so, when she had no direct intimate relationship with Kalpana  

Mukherjee.  By the time the flat was transferred, more than a decade  

68

Page 69

had passed by, during which period, the price of above flat, must have  

escalated  manifold.   Numerous  other  factual  aspects  have  been  

examined by us above, which also clearly negate the assertions made  

by  Kalpana  Mukherjee.   The  same  need  not  be  repeated  here,  for  

reasons of brevity.  Keeping in mind the above noted aspects, we are of  

the  considered  view,  that  invocation  of  the  principle  of  justice  and  

equity, and the doctrine of fairness, would in fact result in returning a  

finding in favour of Pratima Chowdhury, and not Kalpana Mukherjee.

32.  For  the  reasons  recorded  hereinabove,  the  instant  appeal  is  

allowed,  the  order  dated  16.5.2002  passed  by  the  Co-operative  

Tribunal, and the order dated 14.2.2006 passed by the High Court, are  

hereby set aside.  The determination rendered by the Arbitrator in his  

award  dated  5.2.1999,  is  hereby  affirmed.   Kalpana  Mukherjee  is  

directed  to  handover  the  possession  of  flat  no.  5D  to  Pratima  

Chowdhury, within one month from today.  The Society is also directed  

to  retransfer  the  shares  of  the  Society  earlier  held  by  Pratima  

Chowdhury,  and the  ownership  rights  of  flat  no.  5D to  the  name of  

Pratima Chowdhury, without any delay.

………………………….CJI. (P. Sathasivam)

…………………………….J. (Jagdish Singh Khehar)

New Delhi; February 10, 2014.

69