DELHI HIGH COURT REFUSES TO REJECT A PLAINT AT THE THRESHOLD AS THERE IS NO PROOF OF ILLEGALITY OF CONTENTIONS IN THE PLAINT
In a recent case, Hon’ble Justice Navin Chawla of the Delhi High Court, pronounced a Judgment dated 01.06.2023, in the matter of Manju Vats and Others vs. Meena Pandey, CS (OS) 1281/2015, in which the Court held that the Plaint is not liable to be rejected at the threshold, as the Plaintiffs have proved that the contentions in the Plaint regarding inheritance of the Suit Property, is not prima facie hit by the Doctrine of in pari delicto. The said Doctrine states that the Courts are empowered to refuse enforcement of an illegal agreement at the instance of a person who is himself a party to an illegality or fraud.
i) In the present case, one, Savitri Devi, the mother of the Plaintiff, Manju Vats and one, Smt. Sita Devi, the mother of the the Defendant, Meena Pandey, jointly purchased a property located at F-45 in Bali Nagar, New Delhi-110015 (Suit Property), vide Registered Sale Deed dated 11.07.1960 (1st Sale Deed). Both Parties were part of a family and were related to each other.
ii) The Plaintiff claimed that, after the purchase of the Suit Property, a certain amount of loan was required for the purpose of construction. According to the Plaintiffs, the Delhi Administration used to offer loans in 1966 through the Assistant Housing Commissioner (Loans), New Delhi. However, this loan was only given to a property’s solely owner.
iii) The Plaintiffs further claimed that late Shri Jagdish Sarup Vats, the Defendant’s father, was in charge of obtaining the loan from the appropriate Authority. For the purpose of obtaining loan, the Plaintiff’s mother executed a Sale Deed dated 18.03.1966 (2nd Sale Deed) in favour of the Defendant’s mother, whereby, although the latter was made the sole owner of the Suit Property but the Plaintiff’s mother continued to be a co-owner of the Suit Property. Further, the entire amount of the loan was thereafter repaid from the funds of the family.
iv) The aforementioned understanding is said to have reflected in the respective Wills dated 04.1981 pertaining to Smt. Savitri Devi and Smt. Sita Devi,
v) Hence, the Plaintiffs, heirs of Savitri Devi, sought for partition of the Suit Property from the Defendant, heir of Smt. Sita Devi. But when the latter refused to do so, the Plaintiffs filed a Suit for Partition in respect of the Suit Property before the High Court in CS(OS) 1281/2015.
vi) In the said Suit, the Defendant filed a Written Statement contending that with the execution of the 2nd Sale Deed dated 18.03.1966 by the Plaintiff’s mother in favor of the Defendant’s mother, the Plaintiff’s mother did not retain any right, title or interest in respect of the Suit Property. The Defendant further contended that the Defendant’s mother had left behind another Will dated 08.04.1988 executed subsequently, thereby, bequeathing the Suit Property in favour of the Defendant. The Defendant further denied the genuineness of the earlier Will dated 16.04.1981, propounded by the Plaintiffs in the Suit.
vii) Aggrieved by the contentions made by the Defendant in her Written Statement, the Plaintiff sought (I) leave of the Court for amendment of her Plaint, (ii) grant of decree of declaration that the 2nd Sale Deed dated 18.03.1966 is a sham document and did not confer any ownership right upon the Defendant’s mother in respect of the Suit Property and (iii) grant of decree of cancellation, thereby cancelling the 2nd Sale Deed allegedly executed by the Plaintiff’s mother in favor of the Defendant’s mother.
viii) The Court granted permission to the Plaintiff to the extent of amendment of the Plaint, vide Order dated 15.12.2016. Further, in respect of the other reliefs sought by the Plaintiffs as aforementioned, the Defendant was allowed to put forth her objections.
HIGH COURT OBSERVATIONS
The High Court, vide Order dated 01.06.2023, made the following observations regarding whether the prayers of the Plaintiff are liable to be rejected on the basis of the Doctrine of in pari delicto, as claimed by the Defendant:
1) That the principle of in pari delicto means that the Courts will refuse to enforce an illegal agreement at the instance of a person who is himself a party to an illegality or fraud. However, in exceptional circumstances, such person will be relieved of the consequences of an illegal contract into which he has entered inter alia (a) where the illegal purpose has not yet been substantially carried into effect before it is sought to recover money paid or goods delivered in furtherance of it; (b) where the plaintiff is not in pari delicto with the defendant; (c) where the plaintiff does not have to rely on the illegality to make out his claim.
2) Further, if the parties are not in pari delicto, the less guilty party may be able to get recovery for any money paid or property transferred as part of the contract, even if the owner of the property has a fiduciary duty towards the plaintiff.
3) That in the present case, it is not relevant that the 2nd Sale Deed was signed by the mothers of the Plaintiffs and the Defendant in order to deceive the Delhi Administration into giving them a loan so that they are able to enable construction on the Suit Property. In fact, the Plaintiffs have alleged that the aforementioned loan has been fully repaid.
4) That it is not the case of the Plaintiffs that the 2nd Sale Deed was executed to carry out any illegal or immoral act. In fact, it is the case of the Plaintiffs that the Sale Deed was executed to meet the condition for obtaining a loan, which was for the mutual benefit of the mothers of both the Parties. There was no intention of not repaying the loan, and, in fact, the loan stood fully repaid. The Defendant’s mother, as per the case of the Plaintiffs, was, in fact, holding the property for or on behalf of the Plaintiffs in a fiduciary capacity.
5) That the Doctrine of in pari delicto does not prima facie apply to the facts of the present case, so as to empower the Court to exercise its discretionary powers under Order XII Rule 6 of the Code of Civil Procedure 1908 (CPC) (Judgment On Admission) and reject the Plaint and the prayer of the Plaintiffs at the threshold, i.e. (i) the Wills are not hit by the Doctrine of in pari delicto and (ii) as a result, the contention in the Plaint regarding the inheritance of the Suit Property by the Plaintiffs by virtue of her mother’s Will, is also not prima facie hit by the Doctrine of in pari delicto.
Thus, based on the aforesaid observations, the High Court held that the Plaint is not liable to be rejected at the threshold, as the Plaintiffs have proved that the 2nd Sale Deed was not executed to carry out any illegal or immoral act and as such the contentions in the Plaint regarding the inheritance of the Suit Property by the Plaintiffs by virtue of her mother’s Will, is not prima facie hit by the Doctrine of in pari delicto. As a result, the case was further listed for framing of issues on 24-07-2023.
Girija Rani Mullapudi
The Indian Lawyer & Allied Services