Full Judgment Text
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PETITIONER:
TARINIKAMAL PANDIT AND ORS.
Vs.
RESPONDENT:
PERFULLA KUMAR CHATTERJEE (DEAD) BY L.R.S
DATE OF JUDGMENT21/02/1979
BENCH:
KAILASAM, P.S.
BENCH:
KAILASAM, P.S.
KRISHNAIYER, V.R.
KOSHAL, A.D.
CITATION:
1979 AIR 1165 1979 SCR (3) 340
1979 SCC (3) 280
CITATOR INFO :
R 1984 SC1471 (27,54)
ACT:
Plea, which is a pure question of law taken for the
first time may be permitted to be raised even at the last
tier of appellate stage in the Supreme Court.
Suit against purchaser non-maintainability on ground of
purchase being on behalf of plaintiff-Whether applies to an
auction sale by a Receiver appointed under Order 40 Rule 1
of the Civil Procedure Code-Scope of section 66 of the
C.P.C. read with order XXI Rule 82 and order XL Rule 1.
"Purchase certified by the Court" in Section 66 refers
only to the certificate issued by the Court to the Purchaser
under order XXI Rule 94 C.P.C.
HEADNOTE:
The plaintiffs-appellants filed a suit against the
defendants-respondents claiming their title on an
unregistered document to the suit property and premises
purchased by the latter through a sale by the Receiver under
the orders of the Court, on the ground that they were co-
owners thereof by virtue of the said document. The trial
court decreed the suit but the High Court, on appeal,
accepted the appeal and dismissed the suit.
Allowing the appeal by certificate, the Court
^
HELD: 1. A pure question of law on the facts and
circumstances of a case can be taken for the first time in
the Supreme Court. [351 B-C]
(a) In the instant case, the plea that "as the title
has vested in the respondent by virtue of the confirmation
of sale and the registered conveyance, the plaintiffs-
appellants cannot rely on an unregistered document" is a
pure question of law not involving any investigation of the
facts. [351C-E]
Yaswant Deorao Deshmukh v.Walchand Ramchand
Kothari,[1950] S.C.R. 852 @ 861; Raja Sri Sailendra Narayan
Bhanja Rao v. State of orissa [1956] S.C.R. 72; Seth Badri
Prasad and ors v Seth Nagarmal and ors., [1959] Suppl. 1
S.C.R. 769 @ 773; State of U.P and Anr v Anand Swarup [1974]
2 S.C.R. 188; T. A A Appanda Mudaliar v. State of Madras
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A.I.R. 1976 S.C. 2459; applied.
2. In a suit against the purchaser on the ground that
the purchase was made on behalf of plaintiff or on behalf of
some one through whom the plaintiff claims, the plaintiff
cannot succeed in displacing the title of the defendant on
the basis of the unregistered agreement,[352 C]
on the pleadings, in the instant case, the question of
law raised cannot result in the suit being dismissed as not
maintainable. The claim of the appellant as a real owner was
not based on the unregistered agreement alone.
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The suit was based on the plea that the suit property and
the premises were purchased in ownership (i.e.) on the claim
that the appellants-plaintiffs were the real owners of the
property.[352 C-D]
G. H. C. Ariff v. Jadunath Mazumdar Bahadur, A.I.R.
1931 P.C. 79, Meritime Electric Co. Ltd. v. Genral Dairies
Ltd., A.I.R. 1937 PC 114; referred to.
3. Section 66 of the Civil Procedure Code prohibits any
person claiming that a purchase certified by the Court in
such manner as may be prescribed in favour of a person was
made on behalf of the plaintiff. In order to invoke the
prohibition it is necessary to establish that the person
against whom the suit cannot be maintained is a person
claiming title under a purchase certified by the Court in
such manner as may be prescribed. A certificate by the Court
for the purchase in the manner prescribed is, therefor,
essential. [353 B-C]
The word "prescribed" is defined under section 2(16) of
the Civil Procedure Code, as meaning prescribed by Rules.
The provision as to grant of a certificate by a court under
a purchase is prescribed in Order 21. Order 21, Rules 64 to
73 prescribe the procedure relating to sale generally while
Rules 82 to 103 prescribe the procedure relating to sale of
immovable property. When the Court makes an order confirming
the sale under Order 21, Rule 92, the sale becomes absolute.
After the sale becomes absolute under Rule 94 the Court
shall grant a certificate specifying the properties sold and
the name of the person who at the time of the sale is
declared to be the purchaser. Such certificate is required
to bear the day and the date on which the sale became
absolute. [353 C-E]
The certificate by the Court referred to in Section 66
C.P.C. is a certificate under Order 21, Rule 94. The
procedure envisaged for sale generally and sale of immovable
property under Order 21 is sale by a public auction. Sale by
a Court through the Receiver appointed by Court is not
contemplated under these provisions. In a sale by a Receiver
a certificate to the purchaser under Order 21, Rule 94, is
not given by the Court. Therefore, the prohibition under
Sec. 66 cannot be invoked in the case of a sale by the
Receiver. A Receiver is appointed under Order 40 Rule 1, and
a property can be sold by the Receiver on the directions of
the Court even by private negotiations. The requirement of
Sec. 66 of the C.P.C., is a certificate by the Court as
prescribed. Since Section 66 is not applicable to sales by
Receiver it is not necessary to go into the question whether
a sale by the Receiver under the Rules of the Calcutta High
Court would come within the purview of s. 66. Section 66
refers to execution of sales only and has no application to
a sale held by a Receiver. In this case, the conveyance Ex.
5 was in accordance with the original side Rule of the High
Court. [353 E-G]
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JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1626 of
1973.
Appeal by Special Leave from the Judgment and Order
dated 16-9-1971 of the Calcutta High Court in Appeal from
Original Decree No. 209/66.
S. N. Andley, K. C. Sharma, Prem Malhotra and Uma Datta
for the appellant.
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L. N. Sinha, G. S. Chatterjee, D. N. Mukherjee and D.
P. Mukherjee for the Respondent.
The Judgment and Order of the Court was delivered by
KAILASAM, J.-This appeal is by plaintiff 1, legal
representatives of plaintiff 2 and plaintiff 3 by
certificate granted by the High Court Calcutta against its
judgment dismissing the suit.
The suit was filed by the plaintiffs for the
declaration of each of the plaintiffs’ title to the extent
of 1/4th share each and in all 3/4th for all the plaintiffs
of the suit property and the premises with the findings that
the suit property and the premises were purchased in co-
ownership awarding the plaintiffs and the defendants equal
1/4th share each in terms of the agreement dated 2.4.1960
and for partition of the suit property and premises in equal
1/4th share each and for a decree of Rs. 45,000 with further
accruals by way of receipt of further rent till full
realisation of the claim. In the alternative a decree for
accounts of the dissolved partnership on declaration of
dissolution of the same and partition of the suit property
and premises in equal 1/4th share to each of the plaintiffs
and the defendant by metes and bounds.
The defendant in his written statement denied the claim
of the plaintiff and contended that the suit property was
never purchased in co-ownership or that the plaintiffs were
entitled to 3/4th share. He contended that plaintiffs 2 and
3 advanced Rs. 10,000 each as loan and that they had no
claim to the property he having purchased the property in
court auction as the absolute owner.
The trial court decreed the suit. The defendant
preferred an appeal to the High Court which accepted the
appeal and dismissed the suit.
The facts of the case may be shortly stated. The suit
property in Darjeeling belonged to one Harbhajan Singh
Wesal. He executed a mortgage in favour of the Calcutta
National Bank Ltd. The bank instituted a suit against
Harbhajan Singh Wesal for recovery of Rs. 1,82,403-11-3 and
for enforcement of the mortgage. Pending suit the Calcutta
National Bank was wound up and the High Court of Calcutta
passed a decree against Harbhajan Singh and appointed the
Official Liquidator of the Calcutta National Bank as
Receiver of the mortgaged property including the suit
properties. On 5-9-1959 a final decree was passed directing
the sale of the mortgaged property including the suit
properties at Darjeeling by public auction subject to
confirmation by the Court.
The defendant Prafulla Kumar Chatterjee was interested
in buying the property in Darjeeling. He was negotiating
with the Receiver for
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the purchase of Darjeeling properties. On 10.6.1959 he
received a letter from D. N. Mukherjee advocate advising him
to give an offer to the Receiver and on 22.6.59 the
defendant obtained an engineering estimate and made an offer
to the Receiver to purchase the property for Rs. 32,000. On
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20.11.59 an advertisement appeared in the newspaper by P.W.
1, K. K. Kshetry, Solicitor of the bank, for auction of the
suit property. The property was auctioned on 15th December,
1959 and the defendant offered the highest bid for Rs.
30,000. On the same day the defendant deposited Rs. 7,500/-.
While the sale was awaiting confirmation by the High Court a
higher offer was made by one Baidyanath Garsi and thereupon
the defendant offered Rs. 40,000 which was accepted by the
court and the sale in favour of the defendant was confirmed
by the the High Court for a sum of Rs.40,000 on 19.1.60. The
defendant deposited a sum of Rs. 2,500 in addition to Rs.
7,500 that had already been deposited. The defendent was
granted three months’ time for depositing the balance sum of
Rs. 30,000. The defendant did not have funds to pay the
balance of Rs. 30,000 and had to raise the amount.
On 2.4.1960 an agreement was entered into between the
three plaintiffs and the defendant. The suit by the
plaintiffs is mainly based on this agreement P-45 dated
2.4.60. The agreement is signed by the three plaintiffs as
well as by the defendant. According to the recital in the
agreement the parties after learning from the notification
in the newspaper of the sale of the suit property agreed
between themselves to call the bid jointly in co-ownership
in the name of the defendant and that in pursuance of the
agreement the defendant was deputed to call the bid. The
agreement further states that accordingly the defendant was
sent to Calcutta and the bid at the auction which was
finally knocked down on 19.1.60 for a sum of Rs. 40,000 in
the name of the defendant. The agreement also provided that
the plaintiffs and the defendants would be entitled to equal
shares in the property. Another term of the agreement
provided that the conveyance shall be drawn in the joint
names of the parties by obtaining leave from the High Court.
On 7.4.60 the defendant executed two receipts Exs. 22
and 22A in favour of the second and the third plaintiffs
respectively. It is recited in the receipt that the
defendant received a sum of Rs. 10,000 as the share of the
purchase price of the property sold in public auction by the
Official Liquidator in pursuance of the agreement amongst
themselves. Though the receipt was typed in Darjeeling on
7.4.60 the defendant signed the receipt at Calcutta on 11-4-
60. In the meantime on 8.4.60 the defendant filed an
application in the High Court of Calcutta praying that the
time for completion of the sale be extended by three months
from 19-4-60 and the conveyance be executed in
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favour of the three plaintiffs and himself. On 11-4-60 a sum
of Rs. 30,000 was paid to M.R. Kshetry. The request for the
conveyance to be made in favour of the three plaintiffs and
the defendant was given up and the court directed the
execution of the conveyance in favour of the defendant
alone. On 17-6-60 a conveyance was executed by the Registrar
of the High Court and the Receiver in favour of the
defendant alone in pursuance of the order of the court dated
11-4-60. On 2-1-61 the plaintiffs served a notice on the
defendant calling upon him to partition the property and
deliver their shares and render accounts. On 3-6-61 the
plaint in the suit was filed.
The plaintiffs apart from oral evidence very strongly
rely on three documents to prove that they are joint owners
and are entitled to 3/4th share in the suit property. The
first document is the agreement between the parties dated
2.4.60. The second are two receipts dated 7.4.60 issued by
the defendant in favour of plaintiffs 2 and 3. The third
document is the application filed by the defendant on 8-4-60
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in the High Court praying that the conveyance may be
effected in favour of the three plaintiffs and himself. The
case for the plaintiffs is that between 20th and 23rd
November, 1959 there was an advertisement in the newspapers
by the Official Receiver announcing the sale of the suit
property. According to the plaintiffs the three plaintiffs
and the defendant mutually agreed to call the bid jointly in
co-ownership in the name of the defendant and to purchase
the property in equal shares contributing equally the bid
money and the other costs as might be incurred for the
conveyance of the property. It was further agreed that the
plaintiffs and defendant would have equal share in the
property. According to the plaintiffs in pursuance of the
agreement the defendant was sent to Calcutta where he bid on
15.12.59 for Rs. 30,000 and the bid was confirmed by the
High Court on 19.1.60 for a sum of Rs. 40,000. Out of the
bid money a sum of Rs. 7,500 was paid to the Receiver on
15.12.59 and a sum of Rs. 2,500 on 19-1-60 and the balance
of Rs. 30,000 on 11-4-60. In the meantime it is stated that
the plaintiffs and the defendants considered it advisable to
have the verbal agreement between them reduced to writing
and thus the agreement dated 2.4.60 came into existence.
After the full bid money was paid, the plaintiffs
contributing equally, a deed of conveyance was executed on
17-6-60 and registered at Darjeeling. According to the
mutual agreement the parties were entitled as co-sharers to
enjoy and occupy the suit property in co-ownership and were
also entitled to income from them. It was further agreed
that the defendant would manage the joint property for the
co-owners of the property and the defendant would realise
the rents for and on behalf of the parties with liability to
pay the respective shares
345
to each of the plaintiffs. The defendant, on the other hand,
submitted that he was trying to purchase the suit property
from the previous owner Harbhajan Singh by private
negotiations before the proceeding was started for auction
sale. The defendants efforts to purchase the property from
the owner proved abortive and he decided to purchase the
suit property in the auction sale when the property was
advertised for sale. As the defendant was not acquainted
with the procedure of court’s sale he approached the first
plaintiff for legal service and the first plaintiff gave
directions as to how the defendant should proceed. The
defendant denied that he was sent by the plaintiffs to
Calcutta for calling the bid. According to him he went of
his own accord, attended the public auction on 15.12.59 and
offered Rs. 30,000 for purchasing the property and when the
bid was accepted he paid Rs. 7,500 and that money belonged
to him alone. Eventually, the sale was confirmed in favour
of the defendant for Rs. 40,000 and he paid a sum of Rs.
2,500 in court to make up Rs. 10,000 i.e. One-fourth of the
bid-amount all by himself As the defendant had to pay the
balance of Rs. 30,000 and as he was in short of funds he
approached the first plaintiff who was his lawyer and asked
for his advice. As the time for payment of balance amount
was fast approaching the defendant frantically tried to find
a person who could advance him temporary loan of Rs. 20,000
which amount he needed for completing the purchase. As he
was not successful he requested the first plaintiff to find
from amongst his clients persons who could make temporary
advance of the amount. According to the defendant in the
first week of April, 1960 the first plaintiff informed the
defendant that two of his clients, namely plaintiff Nos. 2
and 3, were agreeable to advance the requisite amount but in
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view of the provisions of Bengal Money Lenders’ Act they
were not willing to advance the amount unless some sort of
safeguards were provided for and the transaction was not
described as loan. The first plaintiff drafted a document in
the form of an agreement and the defendant signed it under
the advice and suggestion of the first plaintiff on the
understanding that the document was not intended to be acted
upon and was only to remain as a security for the loan and
that the recitals in the said document do not represent the
real nature of the transaction. The defendant admitted that
plaintiffs 2 and 3 advanced to the defendant a sum of Rs.
10,000 each by way of loan and the defendant had to sign in
their favour the documents acknowledging the receipt of the
loan. The defendant denied that the plaintiffs and the
defendant contributed equally for payment of the bid money
or in defraying the incidental costs in equal shares. The
defendant asserted that he alone paid the entire bid money
and bore all the incidental expenses and that there was
never any co-ownership or co-
346
partnership. He submitted that as the conveyance was
executed exclusively in his favour the plaintiffs had no
right to the property.
The plaintiffs have sought to prove that the parties
after learning from the notification in the newspaper of the
sale of the property agreed between themselves to call the
bid jointly in co-ownership in the name of the defendant and
in pursuance of that agreement the defendant paid the
deposit. Further it is the plaintiffs’ case that in
pursuance of the agreement the defendant was sent to
Calcutta where he bid at the auction which was finally
knocked down for the benefit of all. The plaintiffs’ claim
that they contributed 1/4th of the price of the property and
the expenses i.e. Rs. 13,500 each. Further, it was contended
by the plaintiffs that the bid by the defendant was for the
benefit of the three plaintiffs and the defendant and that
it was agreed that the conveyance should also be in favour
of all of them.
It is seen from the evidence that the defendant was
interested in buying the property alone before the
advertisement appeared in the newspapers on 20-11-59 and 23-
11-59. The defendant received Ex. V a letter dated 10-6-59
from D. N. Mukherjee advocate, advising him to give an offer
to the Receiver so that he can place the matter to the court
for an order for sale by private negotiation. Soon after,
the defendant obtained an engineering estimate of the value
of the property under Ex. M and in accordance with the
valuation wrote Ex. L on 22.6.59 to K. K. Kshetry offering
Rs. 32,000 for the property. On 15-12-79 the defendant went
to Calcutta by himself and made a bid for Rs. 30,000 and
deposited Rs. 7,500 of his money. The plaintiffs admit that
the entire deposit was made by the defendant but pleaded
that it was agreed that on accounts being taken the expenses
will be shared by the plaintiffs. Due to a third party
making a higher offer the defendant had to raise the bid for
Rs. 40,000. It is also not in dispute that the defendant by
himself paid Rs. 2,500 over Rs. 7,500 already paid to make
1/4th of the bid amount. The bid for Rs. 40,000 was made by
the defendant alone. On behalf of the plaintiffs it is
stated that 2 or 3 days after the advertisement appeared the
defendant went to the first plaintiff and told him that he
did not have sufficient funds and requested the first
plaintiff to join him to purchase the property and that 2 or
3 days later plaintiff 3 and son of plaintiff 2 came to
first plaintiff and expressed their desire to purchase the
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property and the plaintiff advised them to purchase the
property jointly with the defendant in shares. Plaintiff 3,
Daluram Agarwala, deposing as P.W. 5 does not support this
case. In cross examination P.W. 5 stated that on November 24
or 25, 1959 he and one N. K. Aggarwala, who is the son of
plaintiff No. 2, went to see the first
347
plaintiff. It was decided among them that the property would
be purchased in the names of all the four of them, the
plaintiffs and the defendant. He would further say that the
defendant on return from Calcutta towards the end of
December, 1959 stated that the property had been purchased
in the names of three plaintiffs and the defendant. It is
thus the case of P.W. 5 that the defendant was sent by all
the three plaintiffs to bid on their behalf and that the
defendant bid on behalf of all of them. P.W. 7, the son of
the second plaintiff, would state that it was agreed that
the property would be bought in the name of the defendant
and that there was no talk that it would be purchased in the
names of all the four of them. It is rather inexplicable as
to how plaintiffs 2 and 3 who wanted to buy the property
separately for themselves agreed to purchase jointly for the
benefit of all of them. It is also difficult to accept the
plea that palintiffs 2 and 3 went to the first plaintiff who
is an advocate and there agreed to purchase the property in
equal shares between the defendant, first plaintiff and
themselves. The second plaintiff had an office in Calcutta
and the Calcutta office had a Munim and three other partners
in whom they had complete confidence. In the circumstances
it is strange that they wanted the first plaintiff to be a
co-sharer so that he could attend to all the legal
questions. There is no explanation as to why plaintiffs 2
and 3 who were independant businessmen would join to
purchase the property. The explanation that the agreement
was arrived at to keep the bid low is purile. The evidence
discloses that the plaintiffs were taking active part in the
transaction after 2.4.1960 while between November, 1959 when
the advertisement appeared and the date of agreement, there
was comparative quiet, which fact probablises that the
plaintiffs were not taking any part in the activities of the
defendant regarding the bid in the court auction of the
property. The dealings of plaintiffs 2 and 3 show that they
were dealing with the defendant at arms’ length insisting on
passing of a receipt for their payment of Rs. 20,000 and
accompanying the defendant and paying the money to the
Receiver themselves. It is highly improbable that they would
have deputed the first defendant to go and bid on their
behalf. There is no explanation as to why their share of the
bid of Rs. 30,000 or the subsequent bid for Rs. 40,000 was
not paid by them. The story that before the defendant bid
for the property for Rs. 30,000 there was an agreement
between the plaintiffs and the defendant that the bid should
be on behalf of all of them cannot be accepted.
The next question that arises is whether the plaintiffs
have proved their case that plaintiffs 1, 2 and 3 each of
them paid Rs. 13,500, Rs. 10,000 being their share of the
bid money and Rs. 3,500 towards expenses. The two receipts
Exs. 22 and 22A are acknowledgements by
348
the defendant of receipt of Rs. 10,000 from each of the
plaintiffs 2 and 3. The defendant admits that he did receive
Rs. 10,000 from each of the plaintiffs 2 and 3 but his case
is that it is a loan. There can be no doubt that the
defendant was paid Rs. 10,000 by each of the plaintiffs 2
and 3. The case of the plaintiffs is that they paid in
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addition Rs. 3,500 each towards expenses. There is no
receipt for this extra payment. But the plea on behalf of
plaintiffs 2 and 3 is that the son of the second plaintiff
paid Rs. 27,000 to the Receiver Kshetry personally
representing the share of plaintiffs 2 and 3 of Rs. 13,500
each. We find it difficult to accept the story for
plaintiffs 2 and 3 were reluctant to part with Rs. 10,000
each without receipt even though the first plaintiff assured
that there was no need for a receipt. In fact the money was
not parted with by them till the second plaintiff’s son
accompanied the defendant to Calcutta and paid it in person
to the Receiver. In such circumstances, it is not possible
to accept the plea of plaintiffs 2 and 3 that they did not
insist on a receipt for payment of Rs. 3,500 each. In this
connection, the evidence of P.W. 1 Kshetry that out of the
sum of Rs. 30,000 paid in cash Rs. 27,000 was handed over to
him by Narendra Kumar Aggarwal and only the balance was paid
by the defendant was relied on by the plaintiffs to show
that the share of plaintiffs 2 and 3 of Rs. 13,500 each was
paid. According to the defendant second plaintiff’s son
Narendra gave him Rs. 20,000 and he had Rs. 10,000 and he
and Narendra counted Rs. 30,000 and handed over the sum of
Rs. 30,000 to Kshetry, in the presence of the Judge. On the
evidence the High Court came to the conclusion that the
money was counted by Narendra and the defendant before it
was paid to Kshetry and if Narendra handed to the Solicitor
a sum of Rs. 27,000 after counting, the inference that Rs.
27,000 belonged to plaintiffs is not justified. We agree
with the view taken by the High Court. We therefore find
that plaintiffs 2 and 3 have not proved that they paid Rs.
3,500 each towards the expenses. The evidence relating to
payment by the first plaintiff is even worse. According to
the first plaintiff, who examined himself as P.W. 2, on 2nd
April, 1960 when the agreement was signed he paid Rs. 10,000
as his share of purchase price and Rs. 2,500 towards cost,
Rs. 12,500 in all in cash to the defendant. He did not
consider it necessary to take a receipt in view of the
signed agreement which he thought was sufficient
acknowledgment of the liability by the defendant. The first
plaintiff was cross-examined about the availability of the
sum with him. He admitted that he had no accounts and that
the payment of Rs. 12,500 is not recorded any where. The
first plaintiff would add that he paid another Rs. 1,000 by
issuing a cheque in favour of the third plaintiff with a
direction that the third plaintiff should pay the
349
sum of Rs. 1,000 to the defendant towards expenses. A cheque
was no doubt drawn by the first plaintiff in favour of the
third plaintiff but there is nothing to indicate that this
amount was to be paid to the defendant. The third plaintiff
did not obtain any receipt from the defendant. The High
Court rightly rejected the plea on behalf of the first
plaintiff that the proceeds of the cheque were paid to the
defendant. On the record there is hardly any acceptable
evidence for establishing the payment of Rs. 13,500 by the
first plaintiff to the defendant or the payment of Rs. 3,500
each by the plaintiffs 2 and 3 to the defendant.
There is no explanation by the plaintiffs as to how the
conveyance came to be registered in the name of the
defendant only when the agreement was that it should be
taken in the name of the three plaintiffs and the defendant
jointly. The agreement contemplated taking of the conveyance
in the names of the three plaintiffs and the defendant and
in fact the application made by the defendant to the court
prayed that the sale be confirmed in favour of the three
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plaintiffs and the defendant and the conveyance issued in
their joint names. But the application for confirmation in
the joint names was not pressed and the conveyance was
ultimately made in favour of the first defendant alone.
There is no explanation as to why the plaintiffs did not
insist on the bid being confirmed in the names of all of
them and the conveyance issued in their joint names. Equally
on the side of the defendant there is no explanation as to
why the signed the agreement which povided that the sale
should be for the benefit of all of them and as to why he
applied to the court praying for the confirmation of the
sale in favour of all of them. Neither has the defendant
denied receipt of Rs. 10,000 from each of the plaintiffs 2
and 3. There is no provision for payment of interest by the
defendant to plaintiffs 2 and 3 for the sums advanced. If it
had been loan simpliciter there could be no explanation for
absence of provision for payment of interest. On a close
analysis of the evidence led on behalf of the plaintiffs and
the defendant we agree with the High Court that neither the
version of the plaintiffs nor that of the defendant
discloses the entire truth. The conclusion we arrive at on
the evidence is that the plaintiffs have failed to prove any
prior agreement before the defendant made his bids for Rs.
30,000 and later for Rs. 40,000 and paid the deposits
amounting to Rs. 10,000 by himself. Plaintiffs 2 and 3 have
failed to prove that they have paid Rs. 3,500 each towards
expenses in addition to payment of Rs. 10,000 by each of
them which is admitted. The first plaintiff has totally
failed in proving that he had paid any part of the
consideration. On the side of the defendant there is no
explanation as to why he subscribed to the
350
agreement agreeing to share the property along with the
three plaintiffs and for his applying to the court for
confirmation of the sale in favour of all of them. Neither
is there any explanation by him as to why plaintiffs 2 and 3
advanced Rs. 20,000 without interest.
Taking all the circumstances into account we feel the
irresistible inference is that the defendant having made the
bid by himself later on found himself badly in need of money
to pay the balance of the bid amount. In trying to find the
money he sought the help of the plaintiffs and received
payment of Rs. 20,000 from plaintiffs 2 and 3. The crucial
question is whether this amount was received merely as a
loan as contended by the defendant or given on the agreement
that plaintiffs 2 and 3 should be entitled to a share each.
The conduct of the defendant shows that while he badly
needed the money he was not willing to share the property
with them for the amount. Equally plaintiffs 2 and 3 wanted
the share in the property for the money advanced by them. It
is clear that the money was not advanced as a loan. It may
be that the plaintiffs 2 and 3 were insisting on a hard
bargain but it cannot be denied in the circumstances in
which the defendant was placed that he had accepted it. The
condition insisted upon by plaintiffs 2 and 3 might not have
been fair but the agreement arrived at in the circumstances
cannot be said to be due to undue influence. The relief to
which the plaintiffs are entitled to under the agreement
cannot be denied. The High Court after observing that
plaintiffs 2 and 3 who are businessmen would not have lent a
large sum of money without charging interest and that it is
not likely that the plaintiffs would have been so charitable
towards the defendant who was a stranger was of the view
that it was not necessary to examine the defendant’s
financial position and record a finding on the point for the
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purpose of appeal. While holding that the defendant’s
version also does not disclose the entire truth the High
Court held that would not help the plaintiffs who have to
prove the case they set up in the plaint. On the short
ground that the agreement dated 2nd April, 1960 does not
reflect the true nature of the transaction the High Court
held that the suit must fail. We are of the view that if the
amount was not advanced as a loan but paid towards acquiring
of a share in the property the relief cannot be denied. In
the circumstances, the plaintiffs 2 and 3 are entitled to
1/4th share each in the property on their payment of their
share of the expenses i.e. Rs. 3,500 each. The defendant has
been in possession of the property ever since the purchase
and the plaintiffs are entitled to their share of the rents
collected by the defendant. We estimate the share of the
rents collected for each of the plaintiffs at Rs. 25,000.
The result is the appeal is allowed to the extent that there
will be a decree for partition and separate possession of
1/4th share
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each of plaintiffs 2 and 3. Plaintiffs 2 and 3 will pay to
the defendant Rs. 3,500 each and interest at 10 per cent per
annum from the date of the conveyance and receive Rs. 25,000
each from the defendant towards their share of the rent
collected upto date. The first plaintiff will not be
entitled to any relief and the suit so far as he is
concerned is dismissed. There will be no order as to costs.
Before we conclude we will shortly refer to the
question of law raised by Mr. L. N. Sinha on behalf of the
defendant. He submitted that as the title in the property
vested in the defendant by confirmation of the court sale
and later by a registered conveyance, the plaintiffs cannot
seek relief on the unregistered agreement Ex. 4 as conveying
any title to them. This point was not taken in any of the
courts below but learned counsel submitted that because it
is a pure question of law not involving any investigation of
facts and as it goes to the root of the matter the court may
permit the point to be taken. In support of his contention
that a pure question of law in the circumstances can be
taken for the first time in this Court he relied on the
decisions of this Court in Yaswant Deorao Deshmukh v.
Walchand Ramchand Kothari(1), Raja Sri Sailendra Narayan
Bhanja Deo v. The State of Orissa (2), Seth Badri Prasad and
others v. Seth Nagarmal and others(3), State of Uttar
Pradesh & Anr. v. Anand Swarup(4) and T. G. Appanda Mudaliar
v. State of Madras(5). As the point raised is a pure
question of law not involving any investigation of the
facts, we permitted the learned counsel to raise the
question. The plea of the learned counsel is that as the
title has vested in him by virtue of the confirmation of the
sale and the registered conveyance the plaintiff cannot rely
on the unregistered agreement. In support of his contention
the learned counsel relied on the decision of the Privy
Council in G. H. C. Ariff v. Jadunath Majumdar Bahadur(6)
and Maritime Electric Co. Ltd. v. General Dairies Ltd.(7).
In G. H. C. Ariff v. Jadunath Majumdar Bahadur it was
doubted whether the English equitable doctrine can be
applied so as to modify the effect of an Indian statute. The
court expressed itself thus:".......but that an English
equitable doctrine affecting the provisions of an English
statute relating to the right to sue upon a contract, should
be applied by analogy to such a statute as the Transfer of
Property Act and with such a result as to create without any
writing an interest which the statute says can only
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be created by means of a registered instrument, appears to
their Lordships, in the absence of some binding authority to
that effect, to be impossible". The Court further observed:
"Their Lordships do not understand the dicta to mean that
equity will hold people bound as if a contract existed,
where no contract was in fact made: nor do they understand
them to mean that equity can override the provisions of a
statute and (where no registered document exists and no
registrable document can be procured) confer upon a person a
right which the statute enacts shall be conferred only by a
registered instrument." In Meritime Electric Co. Ltd. v.
General Dairies Ltd. (supra) the court observed: "....where
as here the statute imposes a duty of a positive kind, not
avoidable by the performance of any formality, for the doing
of the very act which the plaintiff seeks to do, it is not
open to the defendant to set up an estoppel to prevent it".
The decisions are clear that the plaintiffs cannot succeed
in displacing the title of the defendant on the basis of the
unregistered agreement. But this will not help the defendant
as the suit is based on the plea that the suit property and
the premises were purchased in co-ownership i.e. on a claim
that the plaintiffs were the real owners of the property.
The claims of the plaintiffs as a real owner is not based on
the unregistered agreement alone. On the pleadings in the
case the question of law raised cannot result in the suit
being dismissed as not maintainable.
The second question the learned counsel raised was that
the suit is barred under section 66 of the Civil Procedure
Code. The trial court overruled the plea on the ground that
although the sale in question is a court sale it is not
according to the rules prescribed by the Civil Procedure
Code but only according to the Rules of the Calcutta High
Court on the original Side. The learned counsel submitted
that the purpose of section 66, Civil Procedure Code,
applies equally to court sales conducted under Rules of
Civil Procedure Code as well as those conducted under the
High Court Rules. Reliance was placed on a decision of the
Privy Council in Bishun Dayal v. Kesho Prasad and Anr.(1)
where the only case pleaded by the plaintiff was that the
person through whom he claimed derived his right to half of
the village from the auction purchase having been made in
part on his behalf by the auction purchaser, it was held
that the claim was barred by section 66, Civil Procedure
Code, inasmuch as no case independent of auction purchase
and basing title upon subsequent possession was put forward
in the plaint. Section 66 of the Civil Procedure Code runs
as follows:-
"66(1). No suit shall be maintained against any
person claiming title under a purchase certified by the
Court in such
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manner as may be prescribed on the ground that the
purchase was made on behalf of the plaintiff or on
behalf of some one through whom the plaintiff claims."
(2). x x x x x
S. 66 prohibits any person claiming that a purchase
certified by the court in such manner as may be prescribed
in favour of a person was made on behalf of the plaintiff.
In order to invoke the prohibition it is necessary to
establish that the person against whom the suit cannot be
maintained is a person claiming title under a purchase
certified by the court in such manner as may be prescribed.
A certificate by the court for the purchase in the manner
prescribed is therefore essential. The word "prescribed" is
defined under s. 2(16) of the Civil Procedure Code as
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meaning prescribed by Rules. The provisions as to grant of a
certificate by a court under a purchase is prescribed in
Order 21. Order 21, Rules 64 to 73 prescribe the procedure
relating to sale generally while Rules 82 to 108 prescribe
the procedure relating to sale of immovable property. When
the court makes an order confirming the sale under order 21,
Rule 92, the sale becomes absolute. After the sale becomes
absolute under Rule 94 the court shall grant a certificate
specifying the properties sold and the name of the person
who at the time of the sale is declared to be the purchaser.
Such certificate is required to bear the day and the date on
which the sale became absolute. The certificate by the court
referred to in sec. 66 is a certificate under order 21, Rule
94. The procedure envisaged for sale generally and sale of
immovable property under Order 21 is sale by a public
auction. Sale by a court through the Receiver appointed by
court is not contemplated under these provisions. In a sale
by a Receiver a certificate to the purchaser under Order 21,
Rule 94, is not given by the Court. Therefore, the
prohibition under sec. 66 cannot be invoked in the case of a
sale by the Receiver. A Receiver is appointed under Order
40, Rule 1, and a property can be sold by the Receiver on
the directions of the court even by private negotiations.
The requirement of s. 66 of the C.P.C. is a certificate by
the court as prescribed. In this case the conveyance Ex. 5
was in accordance with the original side Rules of the High
Court. In the view we have taken that s. 66 is not
applicable to sale by Receiver it is not necessary to go
into the question whether a sale by the Receiver under the
Rules of the Calcutta High Court would come within the
purview of s. 66. Section 66 refers to execution of sales
only and has no application to a sale held by a Receiver. In
this view the objection raised by the learned counsel for
the defendant has to be rejected.
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ORDER
When the Judgment was delivered in Court on 16th
January, 1979, allowing the appeal to the extent that there
will be a decree for partition and separate possession of
one-fourth share each of plaintiffs 2 and 3, the parties
expressed their desire to agree amongst themselves and
divide the properties finally and report a settlement to
that effect and prayed that the Court may be pleased to pass
a decree in terms of the compromise. Leave was granted to
the parties to enter into a compromise and report the matter
to the Court for the passing of the decree in terms of the
compromise. Accordingly the parties have entered into a
compromise and have filed the compromise memo along with
plans for passing of the final decree. Accordingly we direct
that a decree be passed in terms of the compromise.
S.R. Appeal allowed.
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