Undue Influence

Petitioner accused before National Accountability Bureau (NAB) who entered into plea bargain with NAB but assailed imposition of 15% incidental charges over and above the liability so determined

Validity

National Accountability Bureau had no right to demand such incidental charges either in law or equity

Petitioner while he was deprived of his freedom agreed to the same which indicated use of undue influence

Such use of authority resulted in an unfair advantage over the other

National Accountability Bureau obtained an unfair advantage over the petitioner by extracting an amount from him not otherwise due by using its dominant position over petitioner

"Incidental charges" as part of plea bargain were unconscionable

According to S. 16(3) of Contract Act, 1872, burden of proof that contract was not induced by undue influence was on the person who was in a position to dominate the will of another when he entered into contract with such person and where transaction had appeared to be unconscionable

National Accountability Bureau was unable to explain what incidental charges, if any, were incurred in respect of a plea bargain

Law did not authorize NAB to charge the same and NAB had failed to discharge its burden of proof

Public functionaries were expected to act fairly and justly and could not be allowed to profit from predicament of a person in their custody

High Court condoned delay in invoking Constitutional jurisdiction by petitioner

In absence of law and/or expenses incurred by NAB, the clause of plea bargain whereby petitioner agreed to pay incidental charges was unenforceable for lack of free consent

High Court declared that such clause of plea bargain entered into by petitioner was void to the extent of 15% incidental charges and the same could not be recovered from petitioner

Constitutional petition was allowed, in circumstances.

Petitioner accused before National Accountability Bureau (NAB) who entered into plea bargain with NAB but assailed imposition of 15% incidental charges over and above the liability so determined

Validity

National Accountability Bureau had no right to demand such incidental charges either in law or equity

Petitioner while he was deprived of his freedom agreed to the same which indicated use of undue influence

Such use of authority resulted in an unfair advantage over the other

National Accountability Bureau obtained an unfair advantage over the petitioner by extracting an amount from him not otherwise due by using its dominant position over petitioner

"Incidental charges" as part of plea bargain were unconscionable

According to section 16 (3) of Contract Act, 1872, burden of proof that contract was not induced by undue influence was on the person who was in a position to dominate the will of another when he entered into contract with such person and where transaction had appeared to be unconscionable

National Accountability Bureau was unable to explain what incidental charges, if any, were incurred in respect of a plea bargain

Law did not authorize NAB to charge the same and NAB had failed to discharge its burden of proof

Public functionaries were expected to act fairly and justly and could not be allowed to profit from predicament of a person in their custody

High Court condoned delay in invoking Constitutional jurisdiction by petitioner

In absence of law and/or expenses incurred by NAB, the clause of plea bargain whereby petitioner agreed to pay incidental charges was unenforceable for lack of free consent

High Court declared that such clause of plea bargain entered into by petitioner was void to the extent of 15% incidental charges and the same could not be recovered from petitioner

Constitutional petition was allowed, in circumstances.

Onus after denial of transfer of property by the plaintiff would shift to the defendant to prove the genuineness of gift mutation

Defendant had failed to prove the transaction to be a "gift"

Ingredients of gift i.e. offer, acceptance and delivery of possession had not been proved in the present case

Defendant had not proved the time, date, place and witnesses before whom declaration of gift was made by the plaintiff

Actual consideration for the transfer of property had not been established on record

Claim of defendant that gift mutation had been entered on account of mutual love and affection as consideration had failed

Identity of person appearing for recording of mutation was not established

Identity of parties to the transaction, subject matter of the transaction, nature of transaction and consideration had to be proved to prove the genuineness of a transaction of transfer of property

None of the said ingredients had been proved by the defendant

Defendant could have applied for comparison of thumb impression to prove that plaintiff appeared before the revenue authorities to get mutation entered but it was not done

Defendant had not been able to prove that plaintiff got the gift mutation sanctioned and the entries in roznamcha waqiati had lost significance and could not be used to corroborate the gift that had not been proved otherwise

Property of plaintiff was firstly transferred to her father who was in a position to influence her decision

Defendant had not proved that any independence advice was available to the plaintiff if she had actually transferred the property to her father

Component of undue influence could not be ruled out in circumstances

Transaction in question was doubtful in every aspect and could not be upheld

Impugned mutation was void

Judgments passed by the Courts below were based on mis-reading and non-reading of evidence and erroneous exercise of jurisdiction

Suit property had been fraudulently transferred and suit was within time

Possession of one co-sharer was the possession of all co-sharers

Plaintiff being co-owner should be deemed to be in possession of inherited property

Private witnesses had not been able to prove the gift transaction so evidence of official witnesses would be of no use

Quality of witnesses and not quantity would matter

Erroneous concurrent findings based on mis-reading and non-reading of evidence were no longer sacrosanct

Law protected the right of women to inherit ancestral property

Trial Court had wrongly held that suit of plaintiff was not maintainable

Impugned judgments and decrees passed by the Courts below were set aside and suit was decreed

Revision was allowed in circumstances.

Defendant could not succeed in establishing that any valid marriage was contracted by the plaintiff or she was legally capable of contracting such marriage

Element of undue influence could not be ruled out in the present case

Alleged contract of marriage was result of undue influence

If alleged contract of marriage stood proved even then it was not "valid" and would be deemed to be result of undue influence as plaintiff had denied the same

Shariat Court had rightly decreed the suit of plaintiff while declaring the contract of Nikah as ineffective and inoperative

Appeal was dismissed in circumstances.

Predecessor of the parties remained ill for about three years and died on 20-11-2002 whereas alleged gift was executed on 12-06-2001

Two important ingredients of gift i.e. offer and acceptance were missing in the present case

Father who was on death-bed could not deprive his other sons and daughters by way of a gift

Donees had failed to prove the fact through any reliable evidence that gift in question was free from undue influence

Both the courts below had carefully examined the record and appreciated the evidence and reached to the right conclusion

Defendants had failed to prove the ingredients of a valid gift

Revision was dismissed in circumstances.

Sale-deed was invalid for want of consideration and same was result of deceit and undue influence practised on the vendor

Possession of suit land was never delivered to the vendees by the vendor

If any of the ingredients of sale was missing, transaction would not fall within the definition of "sale"

Expression 'in exchange for a price' used in S.54 of Transfer of Property Act, 1882 was very significant

Price was an essential ingredient in a sale and no transaction of sale could be said to be completed in the eye of law unless price was fixed or paid or part paid and part promised

Any fact might be proved which would invalidate any document or which would entitle any person to any decree or order relating thereto such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, want or failure of consideration or mistake in fact or law

False acknowledgment of receipt of price by a recital in a deed did not estop the seller from giving evidence as against the buyer that he had not received payment

Where a sale was effected through registered sale-deed wherein amount of consideration was mentioned, same could not be construed to be a "sale without consideration"

Party who had acknowledged the receipt of consideration in the sale-deed could show that he did not receive the same

Where vendor had admitted that he had executed sale-deed but alleged that same was under influence and without consideration, evidence to prove the same would be admissible

Rule of extrinsic evidence did not apply in such cases rather evidence to show the true nature of transaction was admissible

Vendor, in the present case, was suffering from high blood pressure and cardiac diseases and he was not having any independent advice at the time of alleged transaction of sale-deed

When there was allegation of fraud or deceit by an old man who had no independent advice and had been deprived of his valuable property by a document, onus would automatically shift upon the beneficiary to prove its contents

Court was not divested of powers to scrutinize the reasons and justifications for the impugned transaction of sale

Element of undue influence was not restricted to an illiterate Parda Nasheen lady rather it could prevail even on men in the particular circumstances of a case

Sale-deed in favour of defendants was got executed without consideration and under undue influence

Presumption of correctness was attached to the certificate endorsed on the sale-deed by the Registration Officer only for the purpose of proving that document had been duly registered

Presumption of correctness with regard to receipt of consideration by the vendor could only arise out of the admission made by him/her which could be contradicted by independent evidence

Vendees had failed to establish the payment of consideration amount and valid acknowledgement of its receipt in the sale-deed

Impugned sale was a sham and void transaction as not proved in accordance with law

Issues in civil cases had to be resolved on preponderance of evidence

Trial Court had failed to appreciate the evidence in its true perspective

Impugned judgment and decree passed by the Trial Court were based on misreading and non-reading of evidence, against law and fact, untenable and were liable to be set aside

Judgment and decree were set aside and suit was decreed

Appeal was accepted in circumstances.

Onus of proving that contract was not induced by undue influence rests on the person in a position to dominate the will of the other.

When an illiterate lady was made to sign or relieve of her property the beneficiary who was to receive the property, onus was upon him to show and prove that transaction made by him was fully proved and clear.

When a Pardanasheen or illiterate woman was made to transfer a property then it was very necessary and important that at the time of transfer of said property she must be assisted by some of her near and close one who could have given her advice as to what she was going to do.

Precise nature of influence exercised, manner of use, of influence, unfair advantage derived by the other party, had to be proved with precision, because the essence of undue influence was that a person was constrained to do against his will, and but for such influence, he would have refused to do the same if left to exercise his own judgment.

A, who by virtue of an agreement had surrendered his share in the property had alleged that he suffered from a mental ailment and started living with Z (his father-in-law) who, by taking advantage of his ailment, got certain documents signed by him and implemented in the official record

Validity

Factum of the said agreement having been arrived at between the parties was clearly inferred and demonstrated

Agreement could not be rendered void or ineffective unless it had been proved by A that the same was result of "undue influence" exerted upon him

A though was a well placed educated person but had not appeared to make any statement before the concerned Authorities in support of his allegations, his appearance and deposition would have enabled the other party to the agreement to cross-examine him and that would have been of immense importance

Long silence of A in the matter also gave rise to adverse inferences against him

Mere certification by the doctor and statement who statedly had been giving to A treatment would have been only a corroborative and supporting piece of evidence

Mere existence of relationship between the parties did not necessarily lead to the conclusion, as to exercise of undue influence

Precise nature of influence allegedly exercised, manner of use of influence, unfair advantage derived by the other party, had to be proved with precision because essence of "undue influence" was that a person was constrained to do against his will, but for the influence, he would have refused to do, if left to exercise his own judgment

Agreement was indeed executed between the parties which suffered from no factual or legal infirmity and had full legal efficacy and continued to bind the parties

Transaction made and envisaged by the agreement between the parties, in circumstances, was neither unconscionable nor was detrimental to the interest of A.

Illustrations-Transactions between parties enjoying unequal bargaining position would be viewed with suspicion and undue influence could be inferred from such circumstances

Undue influence would be inferred, when benefit was such that taker had no right to demand either in law or equity and grantor had no rational motive to give

­Undue influence could be inferred on the basis of capacity of a person to influence the decision of another and not his presence or absence at the time of decision.

Concept—Under influence can arise if coercion, oppression, or compulsion is exercised to dominate the will of the other party and the person concerned is not able to exercise his free violation because of mental, financial or physical distress as a result of undue influence.

Mere allegation or good relation between the parties without any clear suggestion that one of them was in a position to dominate the other does not justify the Court to assume that undue influence must have necessarily been exercised

Duty of Court is to meticulously examine the case especially of the ladies, illiterate indigent and poor so as to do complete justice.

Held, it was not necessary in order to prove exercise of influence by one person on the decision of another that the former must be present before the latter physically in order to influence the latter's decision, but the exercise of undue influence could be inferred from the circumstances depending on the facts of each case.

Attempt having been made to bring a Court of law under undue influence Supreme Court directed the Advocate-General to place that matter in a case for taking further action in accordance with law, before the High Court.

Sale-deeds, therefore, neither fictitious nor were those obtained fraudulently in circumstances- -Sale-deeds were thus binding as far as interest of vendors was concerned.

Undue influence-Customer applying to Bank to purchase for him foreign Exchange-Bank opening letter of credit for beneficiaries in exporting countries through its intermediary Bank, as Bank had no direct connection with countries of origin which were outside the sterling area and, therefore, Bank had to route letter of credit via sterling area-Intermediary Bank debited account of Bank with Sterling equivalent to amount required for purchase of foreign currency Sterling devalued before shipment of goods. materialised-Intermediary Bank debited to Bank with extra amount on account of devaluation Bank in order to realise excess amount paid by it to intermediary Bank obtained a promissory note for customer in its favour-Customer also executed a trust receipt hypothecating certain machinery mentioned in schedule attached thereto and also created an equitable mortgage by deposit of title deeds of landed property-Failure of customer to pay amount under pronote and finally refusing payment on ground that Bank got exe

Para 25 (3) (d) read with Constitution of Pakistan (1973), Art. 185 (3) Leave to appeal-Granted to consider whether petitioner having been found to be a tenant had a preferential right to sale of land in dispute and whether petitioner improved his status and acquired superior right as co-sharer before filing of suit and lastly whether pre-emptor in case in band not possessed of superior right at time of institution of suit and at time of its decree hence suit merited dismissal. [Pre-emption].

S. 16 read with Muhammadan Law-Gift-Undue influence Gift deeds proved by petition-writer and attesting witness to have been executed at donor's instance-Deeds read over to executant twice, once by petition-writer and secondly before Registrar-Executant walking three miles on foot to get deeds registered at Registration Office-Deceased executant of deeds, held, clearly shown to have had his mental and physical capacity, intact in spite of his advanced age-Plaintiffs having incurred donor's wrath by involving him in protracted and frivolous litigation, all ending in judgments against them, donor held, for obvious reasons, made gifts deliberately in favour of defendants who served him and with whom he was pleased at cost of plaintiffs-Plaintiffs having failed to discharge burden of proof in respect of transactions having been induced by undue influence, no room, held, to warrant interference with findings of High Court, not shown to be based on no evidence.

S. 16-Undue influence-Facts to be established for succeeding on ground of undue influence-Merely raising an atmosphere of suspicion-Held, not sufficient.

Question whether on proved facts undue influence could be held established-Can in particular case, be question of law-Gift deed-Existence of authority or influence established-Burden to prove that deed was not due to undue influence lies on person alleging gift to be result of free exercise of will of donor.

Undue influence-Allegation in plaint that alleged gift deed was executed under undue influence-Entirely missed by First Appellate Court while disposing of appeal-Held, such Court had not applied its mind to case.

(f) Contract Act (IX of 1872), S. 16-Undue influence Burden of proof.

S. 16-Undue influence-Woman entering into contract literate having full business aptitude as well as capable of looking after her own interest-Not entitled to any special consideration.

Undue Influence Defendant deciding to employ plaintiff as General Manager of his estate because of plaintiff's leading a deeply religious life-Contract of employment, held, not to have been induced by undue influence-Hard bargain is not necessarily unconscionable

Contract Act (IX of 1872), Ss. 16 and 19-A.

Undue Influence Undue influence-Plea of-To be raised by pleadings by specific allegation-Civil Procedure Code (V of 1908), O. VI, r. 4.

-Agreement to refer to arbitration entered into after the other party had approached the military authorities in martial law regime-Agreement, held, not necessarily executed under undue influence.

Undue Influence Classes of cases in which voluntary gifts would be set aside on ground of.

Proof-Matters relevant and sometimes conclusive : (1) transaction a voluntary gift, (2) if a contract, involved a manifestly inadequate consideration, (3) marked disparity in age and position of Parties-Onus.