REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  1574      OF 2009 [Arising out of SLP (C) No.17162 of 2006]

Parmanand Patel (Dead) by LR. & Anr. ..…Appellants

  Versus

Sudha A. Chowgule & Ors. ..…Respondents

W I T H

CIVIL APPEAL NO. 1575      OF 2009 [Arising out of SLP (C) No.17396 of 2006]

J U D G M E N T

S.B. SINHA, J.

1. Leave granted.

C.A. NO. 11574  of 2009 @ S.L.P. (C) No.17162 of 2006

2. Parmanand  Patel,  since  deceased,  was  a  very wealthy  person.   He

floated  several  companies  including  the  5th respondent  Company  herein

known as M/s. Tulsidas V. Patel Pvt. Ltd.  Appellant Indu P. Patel is his

widow.  He also left  behind his daughters,  viz., Sudha A. Chowgule and

Jaya P. Patel, respondent nos.1 and 2 respectively.  The company has its

assets  consisting  of  shares  in  different  companies  as  also  immovable

properties.  It owns two multi-storeyed buildings known as “Kanchanjunga”

and “D-Tower Building” situated at Peddar Road, Mumbai.  It also owns a

bungalow known as “Bella Vista” situated at the same road.   

According to the plaintiffs (appellants herein), the approximate value

of the assets held by the company would be about Rs.367 crores.  However,

according to  the  1st defendant  (respondent  no.1  herein),  the  value of  the

properties  owned  by  the  company  and  its  subsidiaries  would  be  about

Rs.1120 crores.   

Parmanand  Patel  held  85%  shares  in  the  said  company.   The

remaining 15% shares were held by Indu Patel,  Sudha and Jaya in equal

proportion.   

Indisputably,  Parmanand  Patel  had  been  suffering  from  various

diseases including some neurological ones.  For his treatment, he used to

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frequently  visit  United  States  of  America  accompanied  by  his  wife  and

daughter Sudha.   

One Dr. Hemant Patel, a resident of Mombasa, Kenya is the brother

of appellant no.2.  One Shirish Patel, who is a chartered accountant is the

nephew of Parmanand Patel.  

Indisputably, on 23rd January 2005 late Parmanand Patel executed a

Will.   He  also  signed  letters  which  are  in  the  nature  of  gift  and/or

arrangements in regard to some of his properties.  It is also not in dispute

that he had gifted two flats in favour of the first appellant apart from making

a mediclaim policy for her.   

3. Although the Will is undated, it  is accepted that the same was also

executed on 23rd January 2005, i.e., on the same date when the documents

were executed.  By reason of the said Will, he is said to have bequeathed

50% of his property to Sudha and 50% to Jaya.  In a letter addressed to the

1st respondent, viz., Sudha, he is purported to have recorded that the he had

given all his shares to her.  By reason of one of the letters addressed to the

1st respondent, he is purported to have given all of his shares to her with a

direction that she should retain 46% to herself and give 39% to Jaya.  The

said gift is said to have been made on certain conditions.  A similar letter

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was also addressed to the 2nd appellant herein.  It is, however, not in dispute

that appellant no.2 did not agree to the aforementioned arrangement.  The

said Will was attested by one Dr. Zarir F. Udwadia and one Sh. R.A. Shah,

Advocate.

4. Indisputably, when the aforementioned purported Will was executed

and  the  letters  were  written,  Jaya  was  in  the  United  States  of  America.

Shirish Patel was also in United States.  As appellant no.2 admittedly did

not  agree  to  the  said  purported  mode  and  manner  of  disposition  of

properties by her husband, another document was prepared on 23rd January

2005 itself, which reads as under :  

“ TO WHOMSOEVER IT MAY CONCERN

All  the  documents  which  I  have  signed today shall be reviewed by my nephew Mr. Shirish Patel (C.A.).  His suggestion will be incorporated in  these  documents.   My  (Mrs.  Indu  Patel)  5% interest  in  the  Tulsidas  V.  Patel  will  be  given equally to my daughter Sudha and Jaya upon my demise.

   Sd/-    Sd/- P.T. Patel I.P. Patel Mumbai  Dated 23.1.2005

Sd/- Solicitor.”

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The said document was signed not only by Parmanand Patel and Indu Patel

but also by Shri R.A. Shah, the Solicitor.   

Certain  developments  took  place  thereafter.   A  meeting  of  the

company was held wherein Indu Patel was shown to have been present,  

However, from perusal of a letter dated 01st September 2005, it now

transpires that Indu Patel was given leave of absence on that date.  In the

said  meeting  various  decisions  were  taken,  namely,  transfer  of  shares,

appointment  of  Chairman,  custody  of  the  minute  book,  adoption  of  the

company etc.   It was claimed by Sudha by reason of resolution adopted in

the said meeting, became the Chairman of the company.

5.  Yet  again,  a  Board  meeting  of  the  Company  was  called  on  25th

January  2005  which  was  attended  only  by  Sudha  and  Parmanand  Patel.

Appointment of Shiraj Salelkar, an Advocate being an Assistant to Mr. R.A.

Shah and Ms. Usha Moraes as Directors in the Board of the company was

informed to  the  Board  and a resolution  was  adopted  appointing  them as

Additional Director of the company.  Yet again, a meeting of the Board was

held on 06th March 2005 wherein Sudha and Parmanand Patel were present.

In the said meeting, resignation of Ms. Usha Moraes was accepted and in

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his place Arjun A. Chowgule, son of Sudha, was appointed as Additional

Director of the company.  A resolution was also adopted with regard to the

operation  of  the  bank account  in  terms whereof  Sudha was  permitted  to

operate the bank account singly and others were permitted to operate only

with her.  Another purported meeting was held on 21st April 2005 wherein

Sudha,  Parmanand Patel  and Arjun Chowgule  were present.   In  the said

meeting,  on the  alleged ground that  Jaya Patel  remained absent  from the

Board  meetings  which  had  taken  place  for  a  period  of  3  months  from

January 2005 to March 2005, applying the provisions of Section 283(1)(g)

of the Companies Act, it was resolved that she would be deemed to have

vacated the office of Director of the company with immediate effect.

6. 2nd appellant herein alleging that her husband Parmanand Patel was

unable to manage the affairs of the company and his properties, filed a suit

on his behalf in the original side of the Bombay High Court on or about 12th

September 2005 praying, inter alia, for the following reliefs :

“(a)  that  it  be  declared  that  the  document purporting to be the Will dated 23rd January 2005 of  Plaintiff  No.1,  being  Exhibit  “G” hereto,  the two letters dated 23rd January 2005, being Exhibits “J” and “K” hereto and the purported gift / transfer of shares of Defendant No.5 by Plaintiff No.1 in favour of Defendant No.1 as recorded therein are null, void and of no effect in law;

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(b) that Defendant No.1 be ordered and decreed to deliver up the said document purporting to be the Will  dated  23rd January  2005  of  Plaintiff  No.1, being Exhibit “G” hereto, the two letters dated 23rd January 2005, being Exhibits “J” and “K” hereto for cancellation and the same be cancelled by and under the orders and decree of this Hon’ble Court;  

(c) that the purported transfer of 85% shares held by Plaintiff  No.1  in  Tulsidas  V.  Patel  Pvt.  Ltd., Defendant  No.5  in  favour  of  Defendant  No.1 be set  aside  and  cancelled  and  Defendant  No.1  be ordered and decreed, if necessary, to transfer the said shares to the Plaintiff No.1;

(d) that Defendant No.5 be ordered and directed to record  Plaintiff  No.1  as  the  holder  of  the  85% shares  in  the  records of  Defendant  No.5 and for that purpose to do all  acts, deeds and things and make  proper  entries  in  its  records  as  may  be necessary;

(e)  that  it  be  declared  that  the  appointments  of Defendant No.3 and 4 as directors on the Board of Directors  of  Tulsidas  V.  Patel  Pvt.  Ltd.., Defendant No.5 are not valid;

(f)  that  alternately,  Defendant  No.3  and  4  be removed as directors from the Board of Directors of Defendant No.5;

(g) that the appointment of Defendant No.1 as the Chairperson  of  the  Board  of  Directors  of Defendant No.5 be set aside;

(h) that Defendant No.1 be directed to return the records,  registers,  minutes  books  and  books  of accounts  of  the  Defendant  No.5  company  to  its registered office;”

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Several prayers for grant of interim relief were also prayed for.  

7. A learned Single Judge of the High Court passed an interim order on

16th September 2005 relevant portion whereof reads as under :

“….  However,  I  have  considered  the  aforesaid contention in the light  of  the allegation made in the plaint and large number of material produced pertaining  to  mental  and  physical  health  of plaintiff no.1.  I have also taken into consideration the fact that the right claimed by defendant no.1 in respect of the said 85% share in the defendant no.5 company is based on a gift deed.  In my opinion till  the  hearing  and  final  disposal  of  the  motion said  shares  are  required  to  be  frozen  and  kept intact till the dispute is decided either way at the hearing of the motion.  It is not possible to permit defendant no.1 at this stage to act as if there is a valid gift in her favour of the said 85% share in the defendant no.5 company merely on the ground that there  are  certain  documents  produced  which  are supposed  to  have  been  executed  by  plaintiffs during  the  contemporaneous  period  during  the time the said gift  deed is supposed to have been executed.  Motion undoubtedly requires a deeper consideration.

2. Till  the  hearing  and  final  disposal  of  the motion, none of the parties to the present suit shall exercise  any  right  whatsoever  in  respect  of  the said 85% shares which are the subject  matter  of the  gift  deed  in  favour  of  defendant  no.1  in defendant no.5 company.

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3. In  the  light  of  the  rival  claims  about  the mental health of the plaintiffs, I direct constitution of  panel  of  Doctors  drawn  from  J.J.  Hospital, Bombay  Hospital  and  Lilavati  Hospital  dealing with psychiatrist and neurological department who will  examine  the  said  plaintiff  and  make  report directly to the court.  Plaintiff no.2 shall pay the necessary  cost,  charges  and  expenses  in  respect thereof.   Prothonotary  and  Senior  Master,  High Court,  Mumbai  is  directed  to  intimate  the respective  Hospital  to nominate  one  doctor  from each  of  the  said  Hospitals  for  the  purpose  of aforesaid test of the plaintiff no.1.  The report of such panel will be furnished within 4 weeks from today.

4. Union Bank of India is directed to continue the  arrangement  of  joint  operation  of  the  bank account between defendant no.1 and 2.  In so far as  assets  of  the  company  is  concerned,  plaintiff no.2  and  defendant  no.2  shall  maintain  the  said assets of the company as it is and will not sell or dispose  of  the  assets  or  create  any  third  party rights  except  in  ordinary  course  of  business. Plaintiff no.2 and defendant no.2 shall keep inform defendant no.1 about the business decisions if any, taken by them.  Motion made returnable in usual course.”

8. An intra court appeal was preferred thereagainst by Sudha.  

9. Keeping in view the directions issued by the learned Single Judge in

paragraph 3 of the order dated 16th September 2005, the learned Judges of

the  Division  Bench  interacted  with  Parmanand  Patel  (since  deceased)  in

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their  chambers  and  found  him  totally  incoherent  and  confused.   In  the

aforementioned situation, by an order dated 11th October 2005, directed as

under :

“3.  After  hearing  both  parties,  we  direct constitution  of  a  panel  of  Doctors  from K.E.M. Hospital,  Bombay Hospital  and Lilavati  Hospital from  their  respective  departments  of  Psychiatry and Neurology.  That is to say from each hospital one  doctor  each  from  the  aforesaid  department shall  examine  respondent  No.1  from Psychiatric and  Neurological  point  of  view,  with  regard  to alleged mental disorder of respondent No.1.  We request the panel of Doctors to expeditiously give their report to this Court.

4.  Learned  counsel  for  both  appellant  and respondents  state  that  they  will  render  all assistance  to  the panel  and bear  the expenses  of Doctors’ fees.  Needless to state that the aforesaid panel  of  Doctors  while  examining  respondent No.1 will not be influenced in any manner by our prima facie view as a lay persons.  Place the matter on board on 27th October 2005.”

10. Indisputably, pursuant  thereto or in furtherance thereof,  Parmanand

Patel was examined by a panel of six doctors.  They examined him on 07th

December 2005.  So far as his neurological examination is concerned, the

doctors awarded 24 points (wrongly stated to be 23) out of 30 indicating a

minimal Cognitive Deficit of functioning.  He was also examined in regard

to his mental state.  It was concluded:

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“Conclusion:

It is the unanimous feeling of the six members of this panel that Mr. Patel is suffering from definite deficit,  in  his  cognitive  functions  and  also  his working memory, which lead to an impairment in all aspects of independent functioning.

The  Memory  Deficits  are  significant,  in  both domains  of  registration  and  recall  of  new memories  as  well  as  in  the  retrieval  of  his  past memories,  specifically  pertaining  to  his  personal memories of his Family and Property holdings and his business ventures.

The  Cognitive  Deficits  also  lead  to  improper decisions  and  behaviors  towards  people,  which can cause problems with caregivers at  this stage. Thus he is incapable of taking executive decisions regarding his routine living activities at home and there  is  a  definite  impression  of  his  inability  to function  independently  in  a  financial  or  other business activity.

It is also obvious that as Mr. Patel is incapable of living by himself in an unsupervised environment, he  will  need  to  be  monitored,  supervised,  and assisted,  even  in  his  routine  Activities  of  Daily Living, at all times.”

11. Parmanand Patel expired on 20th November 2006.  An application for

amendment of the plaint was filed.  Leave was granted to amend the plaint.

Jaya was also allowed to be transposed to the category of plaintiff from the

category of defendant by an order dated 10th January 2008.

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12. The interim application came up for hearing before a Division Bench

of the High Court.  By reason of the impugned judgment, it was directed:

“41. In the circumstances, to safeguard the interest of  all  the  parties,  we pass  the  following  interim order which should meet the ends of justice :-

(1) The  Receiver,  High  Court,  Bombay  is appointed  as  Receiver  for  the  assets  of Tulsidas V. Patel (Pvt.) Ltd. and Defendant No.1  (Sudha)  will  act  as  an  Agent  of  the Receiver.  No steps will be taken hereafter based  on  the  documents  of  gift  dated  23rd January 2005.  Actions taken so far will also be subject to the result of the suit.

(2) The  Receiver  will  appoint  a  Chartered Accountant from his panel who will first get an inventory of the properties of Tulsidas V. Patel  (Pvt.)  Ltd.  done  in  four  weeks hereafter.   The  foregoing  clauses  will become operational only thereafter.

(3) Defendant  No.1  (Sudha)  will  be  permitted to  execute  all  necessary  agreements  on behalf of the Company for the purposes of safeguarding  the  assets  thereof.   She  will not  encumber nor sell  any of the assets  of the Company nor will  she create any third party rights in any manner though she will be at liberty to give the properties/flats  on licence basis.  The terms of the document of licence and particularly the licence fee will have to be approved by the above referred Chartered Accountant.

(4) Defendant  No.1  (Sudha)  will  be  permitted to operate the bank account of the Company with Union Bank of India and the restriction

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to  operate  the  same  only  along  with  Jaya will stand vacated.

(5) Defendant No.1 (Sudha) will deposit all the earnings of the Company in its account with Union Bank of India and will  also honour the liabilities thereof.

(6) The Company will bear all the medical and travel  expenses  of  Plaintiff  No.1 (Parmanand  Patel)  and  Plaintiff  No.2 (Induben) as and when required.

(7) From the income of the Company, after the liabilities are met, 33% will be made over to Jaya (Defendant  No.2) and 5% to Plaintiff No.2 (Induben).  Sudha will be permitted to retain 33% of the income for herself.  The remaining  portion  of  the  income  will  be invested in fixed deposits with Union Bank of India from time to time.  The aforesaid payments and investments will be made by taking  the  accounts  at  the  end  of  every  6 months.  The accounts will be got approved from the above Chartered Accountant.

(8) Defendant  No.1  (Sudha)  will  render  all necessary information  to  the  Receiver  and the  Chartered  Accountant  and  copies  of these  accounts  will  be  made  over  to Defendant  No.2  (Jaya)  and  Plaintiff  No.2 (Induben).

(9) The payments, receipts and investments will be  without  prejudice  to  the  rights  and contentions of all the parties and subject to the outcome of the suit.

(10) Plaintiff  No.1  will  continue  to  remain  in possession of the Bella Vista Bungalow till

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the  hearing  and  final  disposal  of  the  suit. Plaintiff  No.2  (Induben),  Defendant  No.2 (Jaya) and her  husband and daughters  will be  permitted  to  stay  with  him  under  the orders of Court.

(11) All  the  properties  and  assets  of  the Company  will  continue  to  remain  in  the name of  the  Company  and  all  agreements concerning them will continue to be entered into only in the name of the Company.

(12) Defendant  No.1  (Sudha)  will  deposit  an amount  of  Rs.50,000/-  with  the  Receiver from  the  Company’s  account  towards charges  and  expenses  of  the  Chartered Accountant and the Receiver to begin with. The costs and charges of the Receiver and the  Chartered  Accountant  will  be  borne from the Company’s account  from time to time.”

13. Mr.  Mukul  Rohatgi  and  Mr.  Anil  Divan,  learned  senior  counsel

appearing on behalf of the appellants, inter alia, would submit :  

i. Sudha meticulously planned the entire strategy to take control

over  the  company  in  a  systematic  manner  beginning  from

December  2004  when  a  second  ration  card  was  applied  for;

shares were said to have been lost and steps were taken even to

have another common seal, the company was proclaimed to be

the  owner  of  the  bungalow  and  Parmanand  Patel  became a

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licencee in the said premises for a maximum period of one year

and ultimately not  only the purported Will  was executed but

also letters of gifts were prepared and addressed to Sudha and

Jaya  followed  by  various  Board  meetings,  from  a  perusal

whereof  it  would  appear  that  she  could  acquire  complete

control  over the  company and,  thus,  the interim arrangement

must be interfered with.   

ii. Keeping in view the fact that  Sudha is  a party to forgery of

documents, she should not have been appointed as an agent of

the receiver particularly when the Court had found out a prima

facie case in favour of the 2nd appellant.  

iii. One of the basic legal principles, as propounded by this Court

in various decisions is that when a Will is unnatural surrounded

by  suspicious  circumstances  and  does  not  satisfy  the

conscience of a Court, such a Will cannot be accepted.      

iv. The  High  Court  should  not  have  shown  any  indulgence  in

favour  of  Sudha.   The  reports  of  the  doctors  as  also  the

observations made by the Division Bench of the High Court in

its order dated 16th September 2005 itself would suggest that

late Parmanand Patel was not mentally fit to take any decision

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by himself and thus no credence could have been given to the

documents including the Will executed on 23rd January 2005.

It  was  unnatural,  the learned counsel  argued that  Parmanand

Patel would consult  Shri  R.A. Shah who had been appearing

against  the company and in fact as lawyer for the companies

represented by Sudha and her husband.

14. Mr.  Rohington  Nariman  and  Mr.  C.A.  Sundaram,  learned  senior

counsel appearing for the respondents, on the other hand, would submit  

i. The Will and the letters of giving having been attested by two

independent persons, viz., Dr. Hemant Patel and and R.A. Shah

and one of them being the brother of Indu Patel must be held to

have been executed by late Parmanand Patel by way of family

arrangement.   

ii. Indu Patel having been provided with sufficient income as two

flats had been given to her as also a third flat in the joint name

of the appellants herein, the annual income whereof would be

about  Rs.60  lacs  per  month,  the  decision  of  late  Parmanand

Patel that his property should be divided half and half between

his two daughters cannot be said to be either illegal or unfair.

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Such a process, according to learned counsel, started in 2003 as

Sudha had been accompanying him for his treatment to other

parts  of  the  country  as  also  United  States.   The  mental

condition of the testator having been found to be good by the

doctors,  as  would  appear  from the  certificate  issued  by  Dr.

Peter Black of Brigham And Women’s Hospital, Boston on 21st

January 2005 who examined him in  October  2004 at  Jaipur,

certificate  dated  28th January  2005  issued  by  Dr.  M.M.

Bahadur,  Cons  Nephorologist  at  Jaslok  Hospital,  certificate

dated  30th January  2005  issued  by  Prof.  R.  Gokal,  Dept.  of

Renal  Medicine,  Manchester  Royal  Infirmity  and  certificate

dated  01st March  2005  issued  by  Dr.  Ajay  Singh,  Harvard

Medical School, would clearly go to show that he had a good

mental faculty.  In fact, he attended a meeting of George Noble

Pvt. Ltd. along with his nephew Shirish Patel on 03rd February

2005.  It  has  also been  brought  to  our  notice  that  vide  letter

dated 13th April 2005 addressed to Subhash Patel, Parmanand

Patel refused the letter of resignation submitted by him which

would show that  he was in complete control  of the situation

and knew what he had been doing.   

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iii. Brother  of  Indu  Patel,  viz.,  Dr.  Hemant  Patel,  a  practising

surgeon at  Mombasa visited  the family and only to  him late

Parmanand  Patel  expressed  his  intention  to  divide  the

assets/shareholding  of  the  company equally  between his  two

daughters during his lifetime and to divide his other assets after

his death and for the said purpose he wanted such separation to

be done during his lifetime and in a tax efficient manner.  It

was pursuant to the said desire, the aforementioned documents

were  prepared.   The  factual  scenario  would  furthermore  be

apparent from a letter written to Indu Patel by her brother on

29th January 2005.   

iv. Surrender of tenancy in respect of the bungalow ‘Bella Vista’

was  necessitated  because  all  formalities  were  required  to  be

complied  with  and  it  was  never  the  intention  of  the  first

respondent to drive her parents out therefrom as would appear

from  a  statement  made  by  he  counsel  before  the  Division

Bench.    

v. The  order  of  the  Division  Bench  of  the  High  Court  having

safeguarded  the  interest  of  all  concerned  and  having  been

passed as the first respondent had been acting as Chairperson

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of the company for a long time, the impugned judgment should

not  be  interfered  with  particularly  when  she  is  required  to

operate  not  only  under  the  receiver  but  also  in  close

collaboration with a chartered accountant.  

15. Although, the  learned counsel  for  the parties  have addressed  us at

great length and in fact we have been taken through the minutest details of

the relevant and important documents filed and relied on by the parties, we

are of the opinion that it  would not be prudent on our part to discuss the

same in great details.   

A receiver, having regard to the provisions contained in O.40 R.1 of

the Code of Civil Procedure, is appointed only when it is found to be just

and convenient to do so.   

Appointment of a receiver pending suit is a matter which is within the

discretionary  jurisdiction  of  the  Court.   Ordinarily  the  Court  would  not

appoint a receiver save and except on a prima facie finding that the plaintiff

has an excellent chance of success in the suit.  It is also for the plaintiff not

only  to  show a case  of  adverse  and  conflict  claims of  property but  also

emergency, danger or loss demanding immediate action.  Element of danger

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is an important consideration.  Ordinarily, a receiver would not be appointed

unless a case has been made out which may deprive the defendant of a de

facto possession.  For the said purpose, conduct of the parties would also be

relevant.  

16. 1st respondent did not question that part of the order of the Division

Bench whereby an Official Receiver of the High Court has been appointed

as receiver in respect of the suit properties.  We would, therefore, proceed

on the premise that a strong prima facie case has been found in favour of the

appellants.

Parties  hereto  have  brought  out  medical  reports  in  respect  of  late

Parmanent Patel which give us different pictures about his mental condition

at  the  relevant  time.   It  is  no  doubt  true  that  the  relevant  date  for

determining  the  mental  faculty  of  late  Parmanand  Patel  would  be  23rd

January 2005, but for arriving at the said conclusion his mental condition,

both prior thereto and later, would be relevant.  Prima facie, appellant no.2

was compelled to file a suit in order to protect the interest of her husband.

Suit was entertained and interim order was passed.  The Division Bench, in

order to satisfy itself, called late Patel in their chamber.  He was found to be

totally  confused and  incoherent.   It  is  in  the  aforementioned  situation,  a

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panel of doctors was constituted for examining him.  We have noticed the

report of the said panel of doctors.   

17. The property in suit is worth more than Rs.1000 crores.  There are

several companies.  Respondent no.5-company herein own huge properties.

There  are  two  multi-storeyed  buildings  which  are  occupied  by  a  large

number  of  tenants.   Each  of  the  heirs  and  legal  representatives  of  late

Parmanand Patel, in the event he is found to have died intestate, would have

1/3rd share.  Appellant no.2 does not claim exclusive interest in respect of

the flats purported to have been gifted in her favour by her late husband.  A

statement has also been made on her behalf of the first respondent herein

that she would have no objection to share the entire property half and half

between herself and appellant no.2.   

18. We may also place on record that several attempts have been made

for reconciliation between the parties.  At the instance of the learned senior

counsel  appearing on behalf  of the parties,  the dispute  was referred to a

learned mediator.   Parties,  however,  for reasons best known to them and

despite the fact that for all intent and purport the dispute hinges on a narrow

pedestal, have not been able to settle their disputes.   

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It, therefore,  appears  that  there is  a lot  of  controversy between the

parties.  There is also a lot of bad blood.  

19. The High Court in its impugned judgment proceeded on the premise

that prima facie late Parmanand Patel had a desire to settle the properties in

favour of his two daughters in equal shares.  He made a meticulous plan

therefor  which would be tax efficient.   To the aforementioned extent,  1st

respondent’s  case  appears  to  have  been  supported  by  Dr.  Hemant  Patel,

brother of Indu Patel herself.  But, with respect, what was not taken into

consideration by the Division Bench of the High Court was that admittedly

two sets of papers were prepared – one on the basis that the 2nd appellant

would surrender her 5% share in the company.  Late Parmanand Patel even

signed the first set of papers.  She, however, refused to part with her share

in the company.  It was then the second set of documents were executed

which not only included the undated Will but also the two letters addressed

to  Sudha  and  Jaya  respectively.   The  said  letters  prima  facie had  been

drafted in a manner which would ultimately be beneficial to the interest of

Sudha alone.  Presumably, at that point of time the 2nd appellant expressed

her stray resent in relation to the whole affair.  Rightly or wrongly, she was

not  ad idem with her husband.  It gave rise to execution of a third set of

document which was signed not only by late Parmanand Patel but also the

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appellant no.2 conferring a power of review upon Shirish Patel.  It was also

attested  by R.A. Shah.   We have been given to  understand that  the  said

Shirish  Patel  alone  was  helping  late  Parmanand  Patel  in  running  the

business.  It is in the aforementioned context that letter dated 26th August

2005 written by Shirish Patel to R.A. Shah assumes importance.  It reads as

under :

“Further  to  my letter  dated  25th August  2005,  I wish to confirm that all the documents purported to  have  been  executed  on  January  23,  2005  by Parmanandkaka  dealing  with  his  assets  and  the acts of Sudha pursuant thereto are detrimental  to the  interest  of  Parmanandkaka  and  therefore  he should not be bound by the same.”

The Will and the letters of gift as evidenced by the two letters dated

23rd January  2005  were  subject  to  review  by  Shirish  Patel.   He  having

opined that the arrangement being detrimental to the interest of Parmanand

Patel,  in our opinion,  should be given primacy at this  stage.   We would,

however, refrain ourselves from making any comment upon the correctness

or otherwise of the one set of reports submitted by the medical experts in

preference to another.  The case of the 1st respondent may or may not be

correct.  It is possible, as has been contended by her, that late Parmanand

Patel had a desire to divide the property in equal shares between her two

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daughters.  However, for the purpose of passing an interlocutory order, we

may proceed on the premise that the rights of the parties would have to be

considered in terms of the provisions of the Hindu Succession Act, 1956,

that is, on the assumption that Parmanand Patel died intestate in which event

share  of  each  of  his  heirs  would  be  one  third.   Distribution  of  property

amongst the children by the parents, however, may be found to be desirable

if the mother wants to retain her share and deal with the same on her own.

No exception can be taken thereto.  Ordinarily, a Court shall presume the

existence  of  a right  in  the  property of  the  deceased in  favour  of  the  2nd

appellant herein unless a strong  prima facie case is made out that she had

been deprived therefrom.  It is not for the court to consider as to whether her

stand is fair to one of her daughters or not.  Even if it be held that the Will

and  the  letters  had  been  executed  by  late  Parmanand  Patel  in  sound

disposing mind, conduct of Sudha cannot be lost sight of.  Sudha might be

accompanying her father to various parts of the country as also abroad to

see that Parmanand Patel received best of the treatment, but then Jaya had

also  been  residing  in  the  same  bungalow  with  her  father  despite  her

marriage in 1979.  Above all, 2nd appellant had also not only been looking

after her husband but also accompanying him for his treatment wherever it

was  found  to  be  necessary.   We,  as  at  present  advised,  do  not  wish  to

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comment upon the contentions raised before us that the Will was not only

unnatural  but  was  surrounded  by  a  large  number  of  suspicious

circumstances.  Such a question would fall  for consideration of the High

Court in the suit.   

20. We,  therefore,  having  taken  into  consideration  all  aspects  of  the

matter, are of the opinion that it is a fit case where the High Court should

have appointed a receiver and/or an administrator with suitable directions.

We have, to the aforementioned extent, intend to interfere with the order of

the High Court as Sudha alone had been given exclusive powers not only to

execute documents but also induct tenants.  The aforementioned job, in our

opinion, keeping in view the relationship between the parties should better

be left with an officer of the Court who would be subject to directions as

may be issued by the High Court from time to time.    

We  leave  the  matter  relating  to  imposition  of  conditions  and/or

appointment  of  chartered  accountant  or  others  to  assist  the  receiver

completely  at  the  hands  of  the  High  Court.   In  a  case  of  this  nature,

however, the official receiver himself may not be appointed as receiver.   

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21. Before parting with this case, however, we may place on record that

Mr.  Hemant  Choudhari,  learned  counsel  appearing  for  respondent  no.6-

Bank  submitted  that  appellants  and  the  respondent-companies  owned  by

appellants  and  the  first  respondent  even  borrowed  a  sum of  about  Rs.5

crore.  The High Court may consider desirability of protecting the interest of

the bank also.   

22. This  appeal  is  allowed  to  the  aforementioned  extent  and  with  the

aforementioned observations and directions.   

C.A.No.  1575  of 2009 @ S.L.P. (C) No.17396 of 2006

23. In view of the order  passed  in  the appeal  arising out  of  S.L.P.(C)

No.17162 of 2006, this appeal would also stand disposed of on the above

terms.

24. Costs of these appeals shall abide by the result of the suit.

……………………….J. [S.B. Sinha]

……………………….J. [Cyriac Joseph]

New Delhi; March 6, 2009.

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