Proof of good faith in transactions where one party is in relation of active confidence:
Where there is a question as to the good faith of a transaction between parties, one of whom stands to the other in a position of active confidence, the burden of proving the good faith of the transaction is on the party who is in a position of active confidence.
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ADVERTISEMENTS:
Illustrations:
(а) The good faith of a sale by a client to an attorney is in question in a suit brought by the client. The burden of proving the good faith of the transaction is on the attorney.
(б) The good faith of a sale by a son just come of age to a father is in question in a suit brought by the son. The burden of proving the good faith of the transaction is on the father.
Comments:
Principle:
ADVERTISEMENTS:
This section provides that where a person is so related to another in a position of active confidence, the burden of proving good faith of any transaction between them lies on the person in good faith. According to Section 111 an active confidence is imposed upon a person in good faith. The active confidence means and indicates “the relationship between the parties must be such that one is bound to protect the interest of other.” A relationship of active confidence stands between the contracting parties when one imposed the duty of good faith upon another who occupies position of trust and confidence.
Such relationship exists in cases such as, father and sons; advocate and client; doctor and patient; husband and wife etc. In all such cases the law imposes a duty of good faith upon person occupying the above positions. There an exception to this rule where a fiduciary or confidential relationship subsists between the contracting parties.
Proof of active confidence:
Section 111 applies to the circumstances where there is valid transaction between the parties and one of them is accruing benefit from the transaction without acting in good faith or is taking advantage of his position. In such cases the burden of proving good faith of the transaction is on the transferee or beneficiary and the relationship of active confidence must be proved. The burden of proving good faith in transaction would be on defendant, dominant party i.e. the party who is in position of active confidence.
“Active confidence indicates that the relationship between the parties must be such that one is bound to protect the interests of the other”.
Fiduciary relationship:
ADVERTISEMENTS:
Where a confidence is imposed by one party to another during the course of transaction, the fiduciary relationship may arise if there arises conflict of interests between the parties. “Where a fiduciary or quasi-fiduciary relationship exists, the burden of sustaining a transaction between the parties rests with the party who stands in such relation and is benefited by it.” When Director issuing additional shares has no fiduciary duty to inform the current shareholders about the benefit and the question of burden of proving bona fide of director does not arise. In a transaction entered into by a pardanashin lady in favour of her managing agent, every onus in upon the agent to show conclusively that the transaction was honest and bona fide.
Transaction with Pardanashin ladies:
When any transfer is made by a pardanashin lady the principle embodied in Section 111 applies. In cases involving transfer by pardanashin ladies, it is incumbent that those who rely upon them should satisfy the court that they had been explained to and understood by those who executed them.
“The rule above applies only to strictly pardanashin woman, women who live in complete seclusion and do not appear in public according to the customs and manners of their country and who on account of their ignorance or want of contract with outside would have not the capacity of understanding business transactions and incapable of managing their own affairs are also entitled to the protection of the court.”—SARKAR
111A. Presumption as to certain offences:
(1) Where a person is accused of having committed any offence specified in subsection (2), in—
(а) any area declared to be a disturbed areas under any enactment, for the time being in force, making provision for the suppression of disorder and restoration and maintenance of public order; or
(b) Any area in which there has been, over a period of more than one month, extensive disturbance of the public peace,
and it is shown that such person had been at a place in such area at a time when firearms or explosives were used at or from that place to attack or resist the members of any armed forces or the forces charged with the maintenance of public order acting in the discharge of their duties, it shall be presumed, unless the contrary is shown, that such person had committed such offence.
(2) The offences referred to in sub-section (1) are the following, namely:—
(a) an offence under section 121, Section 121A Section 122 or Section 123 of the Indian Penal Code (45 of 1860);
(b) criminal conspiracy or attempt to commit, or abatement of, an offence under section 122 or Section 123 of the Indian Penal Code (45 of 1860).
Comments:
This section was inserted by the Terrorist Affected Areas (Special Courts) Act, 1984 which came into force on 14.7.1984. Presumption can be drawn against any person for having committed offences laid down in sub-section 2 of this section.