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M/S. Indian Associates v. Shivendra Bahadur Singh And Others
Case Summary — Judgement by S. Mukerjee, J.
Factual and Procedural Background
This opinion concerns an appeal by a purchaser (the appellant) who claims to have bought a portion of the estate of the deceased Rani Padmawati Devi (property known as "Padma Bhawan") by a sale deed dated 11-10-1988 for Rs. 35 lakhs. The sale was allegedly executed by Raja Shivendra Bahadur Singh, who had been appointed Administrator pendente lite in probate/probate-related proceedings (Probate Case No. 43 of 1987) under S. 278 of the Indian Succession Act. Shivendra Bahadur Singh later filed a statement of account reflecting receipt of Rs. 35 lakhs.
The day after the sale deed, another son, Ravindra Bahadur Singh, obtained an order restraining the Administrator from alienating the estate. Later Ravindra purportedly sold part of Padma Bhawan to M/s Jespur Construction Company Pvt. Ltd. by a sale deed dated 29-7-1997; that transaction prompted further restraint orders and separate civil suit proceedings (pending in the Civil Court, Raipur) instituted by the appellant to challenge the Ravindra sale as void ab initio.
After the death of Raja Shivendra Bahadur Singh (31-12-1998), the appellant filed I.A. No. 490/99 seeking intervention/impleadment in the pending probate proceedings to protect its asserted purchase rights, and I.A. No. 5054/99 for the appointment of an administrator pendente lite in place of the deceased. The learned Single Judge dismissed I.A. No. 490/99 by order dated 17-1-2002 on the ground that the probate proceeding was only for grant of letters of administration and could not decide the appellant's rights.
The appellant appealed the dismissal. During the relevant proceedings the parties had filed an application under Order XXIII, Rule 3 CPC seeking disposal of the probate case on the basis of a memorandum of understanding (MOU) dated 26-8-1999, which the appellant contends concealed the earlier sale to it and reflected an agreement among heirs to deal with the property in favour of Jespur Construction Company.
Legal Issues Presented
- Whether a purchaser claiming an interest in estate property (by a sale deed executed by an Administrator pendente lite) may be permitted to intervene or be impleaded as a party in ongoing probate/administration proceedings.
- Whether a sale/transfer effected by an Administrator pendente lite (without prior court permission under S. 307 of the Succession Act) is void or merely voidable.
- Whether the probate/administration proceeding may be disposed of by a private memorandum of understanding (MOU) or by consent of the heirs where third-party interests are alleged.
- Whether prima facie material (such as a statement of account reflecting receipt of sale consideration) is sufficient to permit intervention for protection of asserted interests pending fuller adjudication.
Arguments of the Parties
Appellant's Arguments
- The appellant asserts that it negotiated and entered into a sale deed dated 11-10-1988 with the Administrator (Shivendra Bahadur Singh) for Padma Bhawan for Rs. 35 lakhs, and that payment was made and reflected in the Administrator's statement of account filed in court on 21-12-1988.
- The appellant contends that it has a sufficient interest (however slight or merely a possibility) to entitle it to oppose or intervene in probate proceedings; in support it relied on several precedents (Smt. Annapurna Kumar v. Subodh Chandra Kumar; Sima Rani v. Puspa Rani; Dimmiti Pullaya v. Abdebolu) for the proposition that any interest justifies opposition to testamentary proceedings.
- The appellant submitted that a petition for probate is akin to a representative suit and that a legatee or beneficiary (or a party with an interest) may intervene on a proper case (relying on Rama v. Rangayya).
- The appellant argued the MOU and the application under Order XXIII, Rule 3 attempted to ignore or suppress the earlier sale in its favour and showed mala fide intent by the respondents to defeat the appellant's asserted rights.
- The appellant relied upon Firm A.L.A.R v. Maung Thewe (AIR 1923 Rangoon 69) for the proposition that a transfer by an administrator without prior permission is voidable, not void (i.e., susceptible to validation or avoidance depending on circumstances), supporting its claim that the transaction should be adjudicated rather than being summarily rejected from probate proceedings.
Respondents' Arguments
- The respondents sought to distinguish the authorities relied upon by the appellant by pointing out that those cases involved family members seeking to intervene and therefore were not authority for a third-party purchaser like the appellant to be made a party in probate proceedings.
- The respondents contended that the transaction (sale to the appellant) was void.
- The respondents relied on the MOU and the agreement among heirs, affirming the subsequent sale in favour of Jespur Construction Company and their arrangement to transfer their respective shares to that party.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Smt. Annapurna Kumar v. Subodh Chandra Kumar, AIR 1970 Cal 433 | Authority for the proposition that any interest, however slight (or even a bare possibility), is sufficient to entitle a party to oppose a testamentary paper. | The court noted this line of authority as supporting the appellant's contention that a person with an interest may be permitted to intervene in probate proceedings. |
| Sima Rani v. Puspa Rani, AIR 1978 Cal 140 | Similar authority supporting entitlement to oppose probate where an interest exists. | Considered by the court as part of the appellant's supporting authorities for intervention where an interest is shown. |
| Dimmiti Pullaya v. Abdebolu, AIR 1962 AP 140 (Full Bench) | Authority for the proposition that even a slight or potential interest justifies opposition/intervention in probate proceedings. | Relied upon by the appellant and considered by the court in framing the rule that a person with an interest may apply to intervene in testamentary proceedings. |
| Rama v. Rangayya, AIR 1933 Mad 114 | Support for the proposition that a petition for probate stands on footing similar to a representative suit and that beneficiaries/legatees may intervene on a proper case. | The court accepted the analogy that probate proceedings may permit intervention by interested parties, supporting intervention in appropriate circumstances. |
| Sisir Kumar v. Manorama Chandra, AIR 1972 Cal. 283 | Proposition that a probate court cannot pass a decree by private agreement; there can be no probate by consent — the court must be satisfied about the genuineness of the Will. | The court cited this authority to emphasise that private arrangements (such as an MOU) cannot substitute for the court's duty to adjudicate testamentary matters and that the probate court is not to be influenced by private compromises. |
| Firm A.L.A.R v. Maung Thewe, AIR 1923 Rangoon 69 | Authority cited for the proposition that a transaction by an administrator without permission is voidable rather than absolutely void. | The court acknowledged this authority as supporting the appellant's position that the transaction could be voidable (thus requiring adjudication) rather than being treated as automatically void for purposes of excluding the appellant from probate proceedings. |
Court's Reasoning and Analysis
The court undertook a multi-step analysis focused on whether the appellant should be permitted to intervene in the probate proceedings and the sufficiency of the material presented:
- The court examined procedural history and the competing factual claims: the appellant's alleged sale deed dated 11-10-1988 executed by the Administrator pendente lite and a later sale by another heir in 1997 to Jespur Construction Company, as well as the existence of an MOU among heirs seeking disposal under Order XXIII, Rule 3 CPC.
- The bench drew attention (and heard parties) regarding S. 307 of the Indian Succession Act, which requires court permission for transfers by an administrator; the question of whether a transfer without that permission is void or voidable was actively debated between the parties.
- The court considered the authorities cited by the appellant for the proposition that any interest, however small, can entitle a party to oppose or intervene in testamentary proceedings and authorities indicating that a probate court should not be influenced by private compromise (no probate by consent).
- The court articulated a legal principle: once it is established that a person or legal entity has an interest in the estate, that party may be permitted to apply to the probate/administration court to be impleaded or to intervene, because probate judgments operate in rem (affecting the status of the property) and may directly affect non-parties with interests.
- The court observed that, in many instances, only the person with the interest can effectively protect it and that in some cases the remaining heirs might, by inadvertence, design or collusion, pursue the matter so as to deprive third parties of lawful rights; this justified permitting intervention where prima facie material exists.
- On the facts before it the court found prima facie credible material supporting the appellant's claim: specifically, the allegation of payment of Rs. 35 lakhs and that this payment was reflected in the statement of account filed by the interim Administrator before the Single Judge.
- Given the prima facie material, the court held that objections raised by the respondents (including whether the transaction was void) were matters for adjudication by the Single Judge after the appellant was permitted to intervene; those contentions could not serve to deny the appellant a place on the record in the probate proceeding.
- The court therefore allowed the appeal to the limited extent of permitting the appellant to participate in the probate proceedings with respect to the part of the estate that is the subject of the sale deed dated 11-10-1988, including questioning the legal capacity of the late Administrator pendente lite to enter into the sale and the legal effect of the transaction.
- The court limited its order: the appellant was not permitted to intervene or participate in the probate case with respect to the remaining estate beyond the subject matter of the contested sale deed.
Holding and Implications
Holding: The appeal is allowed to the following extent: the order of the learned Single Judge dated 17-1-2002 is set aside insofar as I.A. No. 490/99 is concerned, and the appellant is entitled to be impleaded or to participate in the probate/administration proceedings in relation only to the part of the estate that is the subject matter of the sale deed dated 11-10-1988 (including issues as to the legal capacity of the late Administrator pendente lite to effect that sale and the legal effect of the transaction). The appellant is not entitled to intervene in respect of the remainder of the estate.
Implications:
- Direct effect on the parties: The appellant will be permitted to appear on record and participate in the pending probate proceedings limited to protecting its asserted rights under the 11-10-1988 sale deed; the respondents remain free to contest the validity, capacity, or effect of that transaction before the Single Judge.
- Adjudication of contested matters (e.g., whether the transaction is void or voidable, and other respondent objections) is remitted to the learned Single Judge for full adjudication after the appellant is allowed to participate; the appellate court did not decide those issues on the merits.
- The court emphasised the principle that probate proceedings cannot be disposed of merely by private arrangement to the detriment of third parties who have a prima facie interest; the opinion does not purport to lay down a novel binding precedent beyond the application of established principles to the facts of this case.
- Costs: The parties were directed to bear their own costs.
Appeal allowed.
S. MUKERJEE, J.:— The appellant claims to be the purchaser of property “Padma Bhawan” situated at Raipur Chhatisgarh, which is a part of the estate of late Rani Padmawati Devi, who died intestate on 12-4-1987.
2. It is the contention of the appellant that it had negotiated and entered into a sale deed dated 11-10-1988 for purchase of the said property for a total consideration of Rs. 35 lacs, with the Administrator of the Estate being one of her sons viz. Raja Shivendra Bahadur Singh (now deceased).
3. The appellant is aggrieved of the order dated 17-1-2002 passed by the learned single Judge of this court rejecting appellant's application (I.A No. 490/99) filed under order 1, Rule 10 CPC, with the prayer to be allowed to intervene, or to be made a party in the pending proceedings for grant of letters of administration without Will.
4. The said petition under S. 278 of the Indian Succession Act filed by Shivendra Bahadur Singh for grant of letters of administration to the estate of Rani Padmavati was registered and numbered as Probate case No. 43 of 1987.
5. On 10th May 1988, by an order of learned single Judge of this Court, Raja Shivendra Bahadur Singh was appointed as an Administrator pendente lite.
6. On the purported authority of the said appointment as Administrator pendente lite, Raja Shivendra Bahadur Singh is alleged to have negotiated and entered into sale transaction with the appellant purportedly for the purposes of utilising the sale consideration, for meeting the wealth tax and income-tax dues/liabilities of the estate of late Rani Padmawati Devi. Sale deed is also alleged to have been executed and sale consideration duly received.
7. On the very next day, i.e on 12-10-1988 on an application filed by another son Ravindra Bahadur Singh, Ld. single Judge restrained the said Administrator (Shivendra Bahadur Singh) from transferring, alienating or parting with possession of the properties, which form subject matter of the estate of Rani Padmavati.
8. It is the case of the appellant that on 21-12-1988 the said Administrator also filed a statement of account in this court, reflecting the receipt of Rs. 35 lacs by the estate on account of sale of Padma Bhawan to the appellant.
9. It is the further case of the appellant that during pendency of those proceedings, and notwithstanding the sale deed already standing in favour of the appellant, the other son Ravindra Bahadur Singh, sold a part of the property known as Padma Bhawan, by a sale deed dated 29-7-1997, to one M/s. Jespur Construction Company Private Limited, for a total consideration of about Rs. 21 lacs. This amount, the appellant claims was not accounted for in the estate of late Rani Padmawati. The sale deed also, in its recital, did not refer to the proceedings pending before the learned single Judge.
10. It is also the case of the appellant that on coming to know about the sale, the Administrator immediately filed an application (I.A No. 10437/97), wherein by order dated 19-2-1998 learned single Judge restrained the said brother Ravindra Bahadur Singh and other respondent from alienating, disposing or parting with the possession of the properties belonging to the estate.
11. The appellant also claims to have instituted a suit before the Civil Court at Raipur for mandatory injunction and declaration as regards the sale deed alleged to have been executed by Ravindra Bahadur Singh in favour of M/s. Jespur Construction Company Private Limited as being ab initio void. The said suit is still pending before the Civil Court at Raipur.
12. Raja Shivendra Bahadur Singh, the plaintiff and administrator pendente lite before the single Judge, died on 31-12-1998 and thereupon the appellant in order to protect its interests filed the said application (IA 490/99), seeking intervention/implead-ment in the pending probate case.
13. The appellant also preferred another application (I.A No. 5054/99) for appointment of administrator pendente lite in place of late Shivendra Bahadur Singh.
14. On 30-8-1999 the learned single Judge issued notice on these two applications filed by the appellant viz. I. A. No. 490/99 and I. A. No. 5054/99.
15. It is the case of the appellant that only at that stage the legal heirs of late Raja Shivendra Bahadur Singh filed two applications (I.A Nos. 12147/99 and 12148/99) for substitution and condonation of delay.
16. Thereafter it appears that the parties to the probate case filed an application under Order XXIII, Rule 3 of the Code of Civil Procedure seeking disposal of the Probate case on the basis of a memorandum of understanding (MOU) dated 26-8-1999, executed amongst them. This application bears IA No. 4812/2000.
17. It is the submission of the appellant that contents of MOU are reflecting a mala fide intent on the part of the respondents, in trying to wriggle out of the sale effected by the then Administator Shivendra Bahadur Singh in favour of the appellant.
18. While the MOU refers to various details regarding this property Padma Bhawan, the crucial fact about the sale deed in favour of the appellant, has been attempted to be brushed under the carpet.
19. On the other hand the sale of part of the property subsequently by Ravindra Bahadur Singh in favour of Jespur Construction Company, has been acknowledged and affirmed and it has also been mentioned that all the surviving legal heirs, have agreed to sell and transfer their respective portions in favour of the same very party, viz. M/s. Jespur Construction Company.
20. The appellant claims that he was unaware of the MOU till the order dated 26-5-2000 was passed by the learned single Judge and copies of the application under Order XXIII, along with copy of MOU, were served upon the appellant.
21. The appellant is aggrieved of the order of the learned single Judge by which the application for intervention/impleadment (IA No. 490/99), was dismissed by the learned single Judge on the sole ground that the probate case being only a proceeding for grant of letters of administration, the rights of the appellant (applicant), if any, could not be decided in the said proceedings and therefore the application could not be entertained and merited dismissal.
22. We have heard counsel for the parties who have and also filed their respective synopsis along with the photocopy of the case law relied upon by them. Learned counsel for the appellant has relied upon Smt. Annapurna Kumar v. Subodh Chandra Kumar, AIR 1970 Cal 433, Sima Rani v. Puspa Rani, AIR 1978 Cal 140 and Dimmiti Pullaya v. Abdebolu AIR 1962 AP 140 (FB) in support of his proposition that any interest, however slight and even the bare possibility of an interest is sufficient to entitle a party to oppose a testamentary paper.
23. He also relied upon Rama v. Rangayya reported as AIR 1933 Mad 114 for the proposition that a petition for probate stands on a footing similar to that of a representative suit and therefore it would be right in principle to extend the analogy by holding that any legatee or beneficiary may, on a proper case being made out, intervene at any stage and claim to come on the record.
24. Another judgment relied upon by the appellant is Sisir Kumar v. Manorama Chandra reported as AIR 1972 Cal. 283 for canvassing the proposition that a probate court cannot pass a decree in terms of private agreement between the parties. In that case it was held that a Court of probate, is a Court of conscience which is not to be influenced by private arrangements of the parties. Either it grants probate to a Will or it rejects such grant. For such a Court there is no middle path of a “happy compromise.”
25. The rule of law is that there can be no probate by consent. Either it is a grant or a refusal. The Court has to be satisfied in each case whether the Will propounded, is truly the will of a capable testator or not. It is not concerned with any other arrangement.
26. The respondents on the other hand have tried to distinguish the cases relied upon by the appellant by contending that all those were cases where, certain persons were allowed to intervene or were impleaded but all were cases of family members, and as such those decisions are no authority for the proposition that a third party purchaser such as the appellant-herein, could apply to be made a party in probate proceedings.
27. During the hearing of the matter, we drew the attention of both the parties to the provisions of S. 307 of the Succession Act, which made the permission of the court to be mandatory for purposes of transfer of property by an administrator. Both the parties were heard on this aspect.
28. While the respondents claim that the transaction was void, the appellants relied upon Firm A.L.A.R v. Maung Thewe, AIR 1923 Rangoon 69, in support of the proposition that such a transaction is only voidable and not void.
29. Having given our anxious consideration to all relevant aspects of the matter, we feel that as soon as it is established that a person or legal entrity, has an interest in the estate, it would be permissible to the said party to apply to the concerned court, for being permitted to intervene or being impleaded as a party even in the testamentary proceedings since the judgment of the court in probate proceedings is a judgment in rem, and not a judgment in personam.
30. Except for the person having such an interest, in many cases there is no one else who can effectively represent or safe-guard his interest, and it could well be that by inadvertence, or design, or collusion the case may be pleaded or pursued by the remaining or surviving legal heirs, in a manner so as to unjustly deprive the third party of their lawful rights.
31. In this case we find that prima facie credible material has come on record in the form of payment of Rs. 35 lacs by the appellant to the then interim Administrator Shivendra Bahadur Singh, which amount was also reflected in the statement of account filed by the said interim Administrator before the single Judge of this Court.
32. All other objections of the respondents would be a matter for adjudication by the learned Single Judge after the appellant is permitted to intervene or impleaded as a party.
33. In the above circumstances, we allow the appeal and set aside and reverse the order dated 17-1-2002 passed by the learned single Judge, and allow the application (I.A No. 490/99) to the extent that the appellant shall be entitled to participate in the proceedings in order to enable it in safeguarding its interests and that also to the extent of that part of the estate of Rani Padmavati, which is the subject matter of the sale deed dated 11-10-1988 as alleged to have been executed by late Shivendra Bahadur Singh in favour of the appellant, including the legal capacity of late Shivendra Bahadur Singh, as an Administrator Pendente Lite to enter into the sale deed with the appellant, and also in relation to the legal effect of the said transaction, making it clear that the appellant shall not be entitled in any manner to intervene or interfere with, or participate in the pending probate case qua the remaining estate.
34. Appeal is accordingly allowed to the above extent.
35. The parties are left to bear their own costs.
Appeal allowed.
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