Full Judgment Text
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PETITIONER:
BADRI NARAIN CHOUDHARY & ORS.
Vs.
RESPONDENT:
NILRATAN SARKAR
DATE OF JUDGMENT10/03/1978
BENCH:
SARKARIA, RANJIT SINGH
BENCH:
SARKARIA, RANJIT SINGH
KAILASAM, P.S.
CITATION:
1978 AIR 845 1978 SCR (3) 467
1978 SCC (3) 30
ACT:
Partition Act, 1893 Ss. 2 and 3, scope of-Interpretation of
the pleadings Equity jurisdiction of the Courts-Powers of
Court dehors provisions of Act.
HEADNOTE:
In a suit for partition of the suit property, which was very
small in dimension measuring .013 acres only filed by the
plaintiff’s-appellants, the trial Court by its judgment
dated 14-8-1961 decreed the suit and in doing so took
recourse to the provisions of S. 3 (2) of the Partition A
1893 as could not be con. veniently partitioned. The trial
judge fixed the valuation of the suit premises at Rs.
11,250/- and directed. "that the suit premises being
incapable of partition shall be put to sale between the
plaintiffs and the defendant, and the same shall be sold to
that party who offers to pay the highest price above the
valuation of Rs. 11,250/-". Since the highest bid in the
last auction held by the Court in June 1965, was Rs.
50,000’/- and by the plaintiffs the defendant was given an
option to purchase the property at that price and deposit
the sale money by July 1965. On his failure, the Court
accepted the highest bid of the plaintiffs. Accepting the
defendant-respondent’s appeal, the High Court, held, "by
making the averments in paragraphs 8 and 10(c) of this
plaint, the plaintiffs have clearly made out a case to be
dealt with u/s. 2 of the Act", and therefore, equity had to
be worked out between the parties by allowing the defendant
who was residing in the 1st floor and having a shop in the
ground floor to purchase the share of the plaintiffs under
the provisions of S. 3 (1) r/w S. 2 of the Act. Taking Rs.
11,250/- as the price of the whole property in suit which
was the valuation fixed by the trial Court. the High Court
worked out the value of the plaintiffs’ share as Rs.
9,000/-, and that of the defendant as Rs. 2,250/- and
further directed that the defendant be allowed to purchase
the plaintiffs’ share in the suit property.
Allowing the appeal by special leave and remitting the case
to the trial Court, the Court
HELD : 1. Under s. 3 r/w S. 2 of the Partition Act, the
Court can exercise the power u/s 3; y(i) there is a request
of any of the shareholders interested individually or
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collectively to the extent of one moiety or upwards, for
sale of the property and its distribution and (ii) it
reaches an opinion that by reason of the nature of the
property or the number of shareholders or some special
circumstances, a division of the property cannot reasonably
or conveniently be made and that a sale of the property, and
distribution of the proceeds would be more beneficial for
all the shareholders. From the word "may" it is clear that
even when both the conditions are satisfied, the Court has
discretion to direct ,or not to direct a sale of the
property and distribution of the proceeds. The request
contemplated is a sine qua non for directing a sale because
such a request necessarily signified his willingness to have
his share converted into money so that the co-shares may, by
means of the procedure provided in S. 3, buy them out. The
request for sale envisaged by s. 2 must be one for public
sale. If no such request has been made to ’the Court s. 3
cannot be brought into operation.
In the instant case, it is clear from pleadings, that
neither in substance nor in form any request within the
purview of s 2 had been made by any of the parties (co-
shares). That condition precedent for invoking s. 3 (1) was
larking The provisions of Ss. 2 and 3 of the Partition Act
are therefore not applicable to the peculiar circumstances
of the case. [470 F-H, 471 A-B, F-G]
2.In cases, not covered by Sections 2 and 3 of the Partition
Act, the power ,of the Court to partition property by any
equitable method is not affected by
468
the said Act. In a situation where it is found as a fact,
that the suit property is so small that it cannot be
conveniently and reasonably partitioned by nietes and bounds
without destroying its intrinsic worth, the Court can devies
such other feasible method for affecting partition as may
appear to it to be just and equitable, in the circumstances
of the case. In the instant case the suit proparty, being
incapable of division in specie, there is no alternative but
to resort to the process called Owelty, according to which
the rights and interests of the parties in the property will
be separated, only by allowing one of them to retain the
whole of the suit property on payment of such compensation
to the other as may be a just equivalent of his share. [471
G-H, 472 A-B)
Ram Prasada Rao v. Subramanian, A.I.R. 1958 A.P. 647
approved.
[The Court observing, that a more equitable method would be
to take the value of the property as Rs. 50,000/- which was
the highest bid in 1963 and to allow a reasonable increase
for the rise in price, since 1963 upto this date, directed
the Trial Court to dispose of the case in conformity with
its observations after hearing the parties and after taking
such further evidence as may be required preferably within
three months from the date of its order]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil,Appeal No. 2388 of
1968.
(Appeal by Special Leave from the Judgment and Decree dt.
20-3-1967 of the Patna High Court in First Appeal No. 488,
of 1961)
Lal Narain Sinha, F. C. Nariman, S. C. Aggarwala &
Aruneshwar Gupta For the Appellants
A. B. N. Sinha, S. N. Prasad for the Respondent
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The Judgment of the Court was delivered by
SARKARIA, J.-This appeal by special leave, is directed
against a judgment, dated March 20, 1967, of the High Court
of Judicature at Patna. It arises from these circumstances:
The defendant respondent purchased 3/16 share for Rs.
2,250/in the suit premises by a sale deed, dated March 25,
1957. Before this sale, the respondent was already in
occupation of the premises as a tenant paying a monthly rent
of Rs. 53/-, inclusive of water-tax, to the then proprietor.
The plaintiffs-appellants, who, at the material time, were
members of a joint Hindu family governed by Mtakshara Law,
purchased the remaining 13/16 share in the suit premises for
Rs. 9,000/- by a sale deed, dated April 27, 1957. They
already owned and possessed a parcel of land adjacent to the
suit premises and they intended to open a market there after
amalgamating. the same with their share in the suit
premises. They asked the respondent to partition and
separate their share. The respondent did not agree.
Therefore, on August 8, 1959, on the preceding facts, the
appellants, instituted the suit (No. 64 of 1959) for
partition of the suit property, in the Court of the Subordi-
nate Judge, First Court, Patna.
In the plaint, it was inter alia alleged that since the suit
property, was of very small dimensions, measuring .013 acre
only, and its partition by metes and bounds was not
feasible. The plaint also contained’
469
a proposal from the plaintiffs to purchase the defendant’s
share in the suit premises at a price which may be held
reasonable and proper by the Court.
The defendant resisted the suit. He pleaded that he was a
permanent tenant in the suit premises and not a tenant from
month to month; that the plaintiffs had purchased only the
right to receive their proportionate share of the monthly
rent, to the extent of Rs. 39/-, but they were not entitled
to claim partition. An alternative proposal was made that
the defendant was willing to buy the share and rights of the
plaintiffs on a valuation that may be fixed by the Court.
The Subordinate Judge by his judgment dated August 14, 1961,
decreed the suit and in doing so, held that the defendant
was not a permanent tenant but a tenant from month to month
only, that the dimensions and the area of the suit premises
being very small, it could not be conveniently partitioned
and therefore, it was necessary to have recourse to Section
3(2) of the Partition Act, 1893. He fixed the valuation of
the suit premises at Rs.11,250/- and director "that the
’suit premises being incapable of partition shall be put to
sale between the plaintiffs and the defendant, and the same
shall be sold to that party who offers to pay the highest
price above the valuation made by me".
According, the suit property was repeatedly auctioned
between the parties. The first was herd in September 1963,
the highest bid was offered by the plaintiffs. The last
auction was held in June 1965, the highest bid being Rs.
50,000/- offered by the plaintiffs. The defendant was given
the option to purchase the property at that price and
deposit the sale money by July 19, 1965. The defendant
failed to do so. The Court thereon ordered that "the next
highest bid of the plaintiffs to the extent of Rs. 50,000/-
is accepted".
Against the decree of the Trial Court, the defendant
preferred an appeal to the High Court. The Division Bench
who heard this appeal held that by making the averments in
paragraphs 8 and 10(c) of the plaint, "the plaintiffs have
clearly made out a case to be dealt with under Section 2 of
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the Act," and therefore, equity had to be worked out between
the parties by allowing the defendant to purchase the share
of the plaintiffs under the provisions of Section 3‘(1),
read with Section 2 of the Act. Taking Rs. 11,250 as the
price of the whole property in suit which was the valuation
fixed by the Trial Court-the High Court worked out the value
of the plaintiffs’ share as Rs. 9,000/-, and that. of the
defendant’s share as Rs. 2,250/- and further directed that
the defendant be allowed to purchase the plaintiffs’ share
in the suit property, for Rs. 9,000/-. Accordingly, it
accepted the defendant’s appeal and dismissed the cross-
objections of the plaintiffs. Hence,, this appeal by the
plain-
tiffs.
Mr. Lal Narain Sinha, learned counsel for the appellants,
contends that the High Court was in error in holding that
the plaintiffsappellant, had made any request such as in
contemplated, by Section
470
2 of the Partition Act, 1893, and therefore, it was necesary
to have recourse to Section 3 of the Act. It is submitted
that Sections 2 and 3 of the Act did not apply to the case)
which had, in consequence, to be dealt with de-hors the Act
in accordance with equitable principles. The High Court-
proceeds the argument has allowed to defendant-respondant
to purchase the share of the plaintiffs in the suit property
for Rs. 9,000/- only; while the current market value of his
share would be more than 10 or 12 times of that figure,
which was highly unjust and unfair to the appellants.
As against this, it is urged on behalf of the respondent,
that once it is held that the Act does not apply, the Court
has no power to sell the property. It is pointed out that
the High Court had given the respondent the first option to
purchase the plaintiffs share in the property at the value
of Rs. 9,000/- because the equity was entirely on the side
of the respondent, that the plaintiffs were residing away
from the property, they owned 5 or 6 houses in Patna, while
the respondent and his widowed sister were residing in the
first floor of the suit property and the respondent was
running a shop in the ground floor. It is further submitted
that the value of the plaintiffs’ 13/16 share fixed by the
High Court was the piece at which they had purchased,it in
1957, and the suit for partition was filed in 1959, that in
these circumstances the High Court was right in not taking
into account any increase in its value subsequent to its
purchase in 1957. It is maintained that it would work
hardship on the respondent who was a poor man, to fix the
value of the plaintiffs’ share by auction beetween the
parties.
Before dealing with these rival contentions, it is necessary
to ascertain whether the High Court was right in holding
that the plaint contained a request such as is referred to
’InSection 2 of the Act, and therefore, the ’Court had but
to accept "theprayer made by the defendant to buy the share
and rights of tilt"plaintiffs exactly in- terms of Section 3
of the Act".
Sections 2 and 3 of the Act are inter-linked. A perusal of
Sections 2 and 3 will show that the Court can exercise the
power under Section 3. if
(i) there is a request of any of such
shareholders interested individually or
collectively, to the extent of one moiety or
upwards, for sale of the property and its
distribution, and
(ii) it reaches an opinion that by reason of
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the nature, of the property or the number of
shareholders or some special circumstances, a
division of the propert cannot reasonably or
conveniently ’he made, and that a sale of the
property and distribution of the proceeds
would be more beneficial for all the
shareholders.
Even when both these conditions are satisfied, the Court has
a discretion to direct or not to direct sales of the
property and distri-
471
bution of the proceeds. This is clear from the word "may"
used in this Section.
It will be seen from the above analysis that the request
contemplated in No. (1) is a sine qua non for directing a
sale because such a request necessarily signifies his
willingness to have his share converted into money, so that
the co-sharers may, by means of the procedure provided in
Section 3, buy them out. The request for sale envisaged by
Section 2 must by one for public sale. If no such request
has been made to the Court, Section 3 cannot be brought into
operation.
Now let us see whether the plaint contained any prayer
which-as the High Court has held-substantially amounted to a
request for such sale under Section 2. The material part of
the plaint reads as follows :
"8. That the premises in suit is very small in
dimension, measuring .013 acre only, and if it
is considered by the court that the separation
of the defendants share in the said premises
is not feasible, the plaintiffs beg to offer a
price held to be reasonable and proper to the
defendant for his share in the said premises.
Again, in Para 1 O(c) it is prayed : "That in the
alternative when division of premises in suit is considered
not feasible, sale of the defendant’s share or of the
premises be directed and the same be .sold to the plaintiffs
for reasonable and proper price."
By no stretch of language, the above extracts from the
plaint, could be construed to contain a request under
Section 2 that the suit ,Property be publicly sold and its
sale proceeds distributed pro rata ’between the parties.
Nor could, by any reckoning, the alternative proposal
contained in the defendant’s written statement, to the
effect, that he was prepared to buy out the plaintiffs share
at evaluation that may be fixed by the Court. amount to a
request under Section 2.
In short. neither in substance nor in form any request
within the ,purview of Section 2 had been made by any of the
parties (co-sharers). That condition precedent ; for
invoking Section 3(1) was lacking.
Thus considered, it is clear that the provisions of Sections
2 and 3 ,of the Partition Act are not applicable to the
peculiar circumstances of the case. At the same time, there
is a concurrent finding of fact ’recorded by the courts
below that the suit property is so small, that it cannot be
conveniently and reasonably partitioned by metes and bounds,
without destroying its intrinsic worth. This finding is un-
assailable. In our opinion in such a situation the Court
can devise such other feasible mode for effecting partition
as may appear to it to be just and equitable in the
circumstances of the case.
The suit property, being incapable of division in specie,
there is no alternative but to resort to the process called
Owelty, according
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472
to which the rights and interests of the parties in the
property will be separated, only by allowing one of them to
retain the whole of the suit property on payment of just
compensation to the other. As rightly pointed out by K.
Subba Rao, C. J. (speaking for a Division Bench of Andhra
High Court in A.I.R. 1958 Andhra Pradesh 647), in cases not
covered by Sections 2 and 3 of the Partition Act, the power
of the Court to partition property by any equitable Method
is not affected by the said Act.
Now in the present case, the defendant is the smaller co-
sharer and he is using the property as a shop-cum-residence.
Equity requires that he should be given a preferential right
to retain the whole of the suit property on payment of
compensation being the just equivalent of the value of the
plaintiffs’ share to them. The valuation of’ Rs. 9,000/-
fixed by the High Court, was certainly not a fair com-
pensation for the plaintiffs’ 13/16 share. This was the
price at which the plaintiffs had purchased their share on
April 27, 1957. But in 1958, more than one year before this
suit, which was instituted on August, 1959. a plan or scheme
for concertina this locality into a market had been approved
by the authorities. This must have led’ to an immediate
spurt in the value of the land in the locality. In this
connection it is pertinent to note that when in 1963 this
Property was, in execution of the decree of the trial court,
put to auction, the highest bid fetched by it was Rs.
50,000/-. It was therefore, highly unfair to the plaintiffs
to fix the value of their share at Rs. 9,000/-, even on
March 20, 1967 when the High Court’s judgement was
pronounced. Although the value of the property could be
fixed by auction between the two parties, we feel that this
method’ would be unsatisfactory in this case as the
plaintiffs who own the, major share and have unlimited
resources, would outbid the defendant. In the
circumstances, we think that the more equitable method would
be to take the value of the property as Rs. 50,000/- in 1963
and allow a reasonable increase for the rise in price since
1963 to this date, taking into account the rise in price in
the locality and give the defendant the first option to
retain the whole property on payment of 13/16 share of that
valuation (including the increase) to the plaintiffs within
a period of three months or such further period that may be
granted by the Court of first instance, facing which the
plaintiffs will be entitled to be allotted and put in
possession of the whole, of the suit property. on payment to
the defendant ’of 3/16 share of the value of the property
determined by the Subordinate Judge, Patna, in the manner
aforesaid.
For the foregoing reasons, we allowed this appeal and send
the case back to the Subordinate Judge, Patna, with the
direction that the should take such further evidence with
regard to the increase in the value of similar properties in
the locality since 1963. as the parties may wish to produce,
and then and after hearing the parties, dispose of the case
in conformity with the observations made in this Judgment.
There shall be no order as to costs in this Court.
S.R.
Appeal allowed.
473