Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6692 OF 2005
Rani Aloka Dudhoria and others …. Appellants
Versus
Goutam Dudhoria and others …. Respondents
WITH
CIVIL APPEAL NOS. 6693-6694, 6697, 6695 AND 6696 OF 2005
J U D G M E N T
S.B. SINHA, J.
Plaintiffs in a suit for partition are appellants before us. The dispute
between the parties relates to three items of properties described in
Schedules ‘A’, ‘B’ and ‘C’ of the plaint.
Shorn of all unnecessary details the fact of the matter is as under :-
2
Azimganj Raj Estate belonged to Raja Bejoy Singh Dudhoria. He
died in 1933. He was survived by two sons namely Kumar Chandra Singh
Dudhoria (KCSD) and Kumar Padam Singh Dudhoria (KPSD) who
succeeded to his estate. On or about 16.10.1953 a mutual partition was
entered into between KCSD and KPSD. Some joint family immovable
properties were divided and allotted between them on 50 : 50 basis. It was
also agreed that in future also on no account whatsoever there shall be any
deviation from this allotment and they would equally share the profit and
loss arising out of business.
KPSD died on 5.05.1968 and was survived by his widow Rani Aloka
Dudhoria and seven daughters, appellants herein except Seema Duhoria, the
original plaintiff No. 6. Respondents are heirs and legal representatives of
KCSD.
On or about 5.07.1977, a suit for partition was filed by the appellants
against KCDS and his sons, which was numbered as C.S. No. 384 of 1977,
wherein they admitted equal division of certain immovable properties
described in Schedule ‘A’ of the plaint and sought equal division thereof
3
between the parties in respect of properties mentioned in Schedule ‘B of the
plaint.
On or about 20.07.1979 a preliminary decree was passed in the suit
declaring shares in respect of Schedule ‘B’ properties – half : half between
the plaintiffs and the defendants.
One Shri Nirmal Kumar Mitra, Advocate was appointed as
Commissioner of Partition for the purpose of dividing the properties
between the parties and determining their respective liabilities (taxes etc)
on half and half basis. It was furthermore directed that valuation of the
property situated 91, Netaji Subhash Road, Kolkatta be got done by a valuer
and then offered to the parties for sale.
Several meetings were held by the Commissioner during the period
30.10.1979 and 10.02.1982.
In the meantime, however, KCSD, died on 16.12.1980 leaving behind
defendants No. 2 to 6 as his heirs and legal representatives.
4
On or about 10.07.1982 an application was filed by the defendants
praying inter alia for the following directions to the Commissioner :
“ (a) to divide the properties in Schedule C by holding a lottery
amongst the parties and thereby allotting two lots
accordingly;
(b) for determination of tax and other liabilities.”
By a consent order dated 1.09.1982 the said application was allowed,
directing:
“By consent of the parties there will be an order in
terms of prayer (a) of the petition, except the
Commissioner of Partition will sell out through
lottery the premises at Jiaganj, where the post
office is situated. The commissioner of Partition
will divide the properties as mentioned in
Schedule ‘C’ into two lots. It is agreed by and
between the parties that the division of the
properties into two lots first option will be given
to the client of Mr. Anindya Mitra to choose the
first lot. It is recorded that such properties as
mentioned in Schedule ‘C’ have already been
divided into two lots by the defendants, which
would be submitted to the Commissioner of
Partition for the purpose of holding the lottery.
Such lottery will be held by the Commissioner of
partition within two months and one half from
date. Whoever is in possession of the title deed in
respect of the properties will submit the same to
the Commissioner of partition for the purpose of
handing them over to the party concerned. By
consent of the parties there will also be an order in
5
terms of prayer (b) of the parties, so far as prayers
(d) and (e) of the petition are concerned. Mr. Deb
Kumar Sinha, Advocate of M/s Mukherjee &
Biswas and Mr. Ananda Agarwalla, Advocate of
M/s Rajesh Khaitan & Co. will sell the property
situated at Serampore along with the tank and hold
the sale proceeds of such sale for the purpose of
making payment in respect of the liabilities of the
joint properties. Such liabilities will be
ascertained by them and approved at a meeting of
the parties and thereafter disbursement will be
made, and the balance amount will be held by
them till further orders of this Court. Such
balance amount is to be deposited in a short terms
fixed deposit account with any nationalized bank.
Although the entire order has been passed by
consent of the parties. Mr.Chakraborty submitted
that this order be recorded to be made without
prejudice to the main contentions made by the
parties in the original suit. It is further recorded
that the client of Mr. Chakraborty has not filed any
affidavit in reply and under the circumstances he
does not admit the allegations as contained in
affidavit in opposition.”
In the proceedings dated 18.10.1982 the Commissioner observed: ‘it
is unfortunate nothing has yet been done on behalf of the plaintiffs with
regard to supplying of scheme of partition’.
The Commissioner asked the parties to give a clear and definite
answer to his query as to how they propose to make valuation of the
6
properties for implementation of the aforesaid consent order dated
1.09.1982.
An application was made for dismissal of Shri Nirmal Kumar Mitra
as a Commissioner of Partition. While declining the said prayer, the High
Court by its order dated 5.07.1983 appointed Mr. Ranojit Mitra, Advocate
as Joint Commissioner of Partition to act jointly with him and carry out the
order dated 1.09.1982, the operative portion whereof reads as under:
“…Under the circumstances, at this stage it was
not open to Mr. Anindya Mitra’s client to urge that
the properties should be valued first before the
same are put up for lottery by the Commissioner of
Partition. Various charges have been levied
against the Commissioner of Partition and in view
of loss of confidence by the plaintiff as also the
defendants including the defendant no. 6 in the
Commissioner of Partition, on the basis of which
they have prayed for removal of the Commissioner
of Partition. This Court does not wish to remove
the Commissioner of Partition at this stage. Mr.
Ranajit Mitra is appointed Joint Commissioner of
Partition to act with the Commissioner of Partition
jointly and carry out this Court’s order passed on
1.9.82 forthwith. There is also a similar direction
on Mr. Deb Kumar Sinha as also Mr. Ananda
Agarwalla to carry out the earlier order. Costs
would be costs in the cause.
The Commissioner of Partition was given 76
GMS. To be as remuneration, the Joint
Commissioner of Partition would also receive the
7
same remuneration of 76 Gms. to be shared by
both the parties equally.
It has further been brought to the notice of this
Court by Mr. A.C. Kar that inspite of inventory
being made and statement having been given by
the previous Commissioner of Partition of the
moveable properties, these moveable properties
and missing and to the steps had been taken with
regard thereto.
All parties including the Joint Commissioner of
Partition to act on signed copy of the minutes of
this order on the usual undertaking.”
On or about 10.06.1983 defendants/respondents made yet another
application for direction, inter alia, praying that:
“a) Plaintiffs be directed to choose any one of
the lots from either annexure ‘J’ or ‘K’ herein.
b) The lot chosen by the plaintiffs be allotted
to them and the other lot be allotted to the
defendants;
c) Alternatively, the lots prepared by the
defendants be put to lottery and allotment made in
accordance with the result of the lottery”
8
On or about 25.07.1983, a meeting of the Joint Commissioners was
held in which properties which were not in dispute were amicably divided.
It was suggested in the meeting that defendants should submit their
valuation in respect of the suit properties of Rajbari, Azimganj and
Dharmshala at Azimganj, (which were said to be impartible estates and were
not included in any of the two lots) and the plaintiffs shall have an option
either to accept the offer and take properties at that valuation or to ask the
defendants to purchase the properties at that valuation. In respect of third
property being, viz., situated at 91, Netaji Subhash Road, Calcutta it was
directed that both the plaintiffs and defendants would come with their own
valuation and if valuation thereof is agreed upon by the parties, then the
order dated 20.07.1979 shall be carried out.
In the meeting held on 30.07.1983 plaintiff No.2, Sheela selected lot
‘B’ out of the two lots suggested in the defendants’ scheme , and
accordingly lot ‘A’ was allotted to the defendants. Plaintiffs and defendants
declared that they do not have title deeds of any of the properties nor they
have created any encumbrances in respect of the properties. After some
discussions, the Joint Commissioners of Partition inter alia issued the
following directions :
9
“(b) It is made clear that on 2nd August, 1983
the parties will come prepared with their
valuations in respect of the three properties being
premises No.91, Netaji Subhas Road, Calcutta,
Rajbari at Azimganj and Dharamsala at Azimpunj.
(c) On 2nd August, 1983 the Joint
Commissioners of Partition will hold auction in
respect of the said three properties at the valuation
which the parties will make which would be
accepted as the reserve price.
(d) In the event either the plaintiffs or the
defendants do not give their valuation in respect of
any of the said three properties, then the
procedures which were decided during the last
meeting held on 25th July, 1983 would be
followed.”
On or about 16.08.1983 the defendants made the third application
inter alia praying for : (a) decree of partition in terms of allotment made by
the Joint Commissioners in its meting dated 30.07.1983; and (b) direction to
the Commissioners for allotment of the 3 remaining properties without
valuation.
On the said application, it was recorded that an order had already
been passed in terms of prayer (a). An order was also passed in terms of
prayer (b). It, however, appears that the prayers (a) and (b) made in the
10
notice of motion and the application were different. Whereas in the prayer
(b) of the notice of motion, allotment of the properties was to be made,
without valuation, no such prayer was made in the application itself. In this
connection, we may notice that prayer (b) in the notice of motion was:
“(b) Directions be given to the Joint
Commissioner of Partition regarding
allotment of properties being premises
No.91, Netaji Subhas Road, Calcutta,
Rajbati at Azimganj and Dharamshala at
Azimganj to offer the property to the parties
for being bid without valuation”
In the application, however the prayer (b) reads as under:
“(b) Directions be given to the Joint
Commissioner of Partition regarding
allotment of properties being premises
No.91, Netaji Subhas Road, Calcutta,
Rajbati at Azimgange and Dharamshala at
Azimganj;”
We may also note the order passed by Khastgir, J. in the following
terms:
“The matter was adjourned from time to time to
enable the parties to finally sign the terms of
settlement. But the parties could not agree to the
clauses suggested by the plaintiffs that in the event
the plaintiffs became the successful bidders of the
11
joint family properties the defendants should
indemnify and keep the plaintiff safe and harmless
in respect of any encumbrances or charge affecting
such properties which might have been created by
Kumar Chandra Singh Dudhoria, since deceased
or his heirs and successors. Similarly the plaintiffs
agreed to indemnify to keep the defendants safe
and harmless in respect of any encumbrances and
any charge affecting such properties which might
have been created by Kumar Padam Singh
Dudhoria or his heirs and successors. That clause
appears to be reasonable in as much as the parties
who bid for such properties and purchase the same
at such auction held by the Joint Receivers may
not suffer due to some encumbrances created by
the erstwhile owners. Under the circumstances for
the protection of interest of both the parties such
clause should be there in the order itself.
An Order in terms of prayer (a) of the petition had
already been passed for partition in terms of
allotment made at the joint meeting of the
th
Commissioner of Partition held on 30 July, 1983.
There will also be an order in terms of prayers (b)
and (c) of the petition.”
We will advert to this question a little later.
It, however, appears that during the period 11.06.1984 and
7.07.1991, i.e., for a period of about seven years, no demarcation in respect
of lot ‘A’ and lot ‘B’ properties had taken place. No step was taken by any
of the parties to purchase the said properties, one way or the other. The
12
question cropped up again before the Commissioner, in a meeting held on
7.07.1991, wherein on behalf of the appellants, Amita, Appellant No. 4
participated.
It was agreed to by and between the parties that as in terms of the
order of the court, the three properties were to be auctioned between them,
valuation of those three properties by any valuer was not necessary. Such a
consent appears to have been given to do away with the expenditures which
were required to be incurred therefor.
Admittedly the appellants remained absent in some meetings held by
the Joint Commissioners of Partition. By a letter dated 27.08.1991, the
Joint Commissioners expressed their unhappiness thereover stating that as
they were professional people, the parties should cooperate. It was directed:
st
“By notice dated 21 August, 1991 we fixed a
meeting today at the residence of Mr. Nirmal
Mitra, one of the Joint Commissioners for the
purpose of implementation of the decisions taken
th
by us during the meeting held on 7 July, 1991.
This meeting was extremely important. Mr.
Goutam Dudhoria, one of the party attended the
residence of Mr. Nirmal Mitra in time and waited
till 7.30 P.M. However, no one attended on behalf
of the Plaintiffs and the net result is that we could
not hold the said meeting. We do not appreciate
this kind of conduct of any of the parties. Parties
13
should realize that we are professional people and
we cannot afford our time to be wasted in this
manner.
th
Be that as it may, please take notice that on 11
September, 1991 we shall hold the scheduled
meeting at 4.30 p.m. at the Bar Library Club, first
floor, High Court, Calcutta. You are requested to
attend the said meeting along with your respective
clients. During the said meeting we will take the
necessary decisions relating to the items recorded
th
in the minutes of the meeting dated 7 July, 1991.
Should any party fail to attend the said meeting on
the scheduled day then the decision would be
taken in his/her absence.”
Yet again for a period of about 2-3 years, steps were taken only for
demarcation of other properties in Lot ‘A’ and Lot ‘B’. The question as
regards implementation of the order dated 11.06.1984 and partition of the
three properties without valuation in the aforementioned situation cropped
up once again.
Defendants moved the fourth application on or about 22.01.1997
stating that one of the Joint Commissioners, viz., Mr. Ranojit Mitra was
elevated as a Judge of the Calcutta High Court and in view of the non-
cooperation of the appellants herein at the meetings before the
Commissioner, the question of division and disposal of the three properties
14
was still hanging; and the properties being in a dilapidated condition require
repairs and furthermore tax liabilities were mounting.
Directions were sought for on the following terms:
“a) Mr. Nirmal Kumar Mitra, Bar at law be
directed to act as the Sole Commissioner of
Partition with consequential directions;
b) Minutes of the meeting dated December, 19,
1993 and February 27, 1994 along with the
plan annexed thereto being annexure ‘O’,
‘G’ and ‘H’ respectively to this petition be
treated as part of the order dated June 11,
1984 and be drawn up and completed
accordingly.
c) The commissioner of Partition be directed
to:
(i) Sell the three properties referred to in
paragraph 1 of this petition in terms
of the order dated June 11, 1984 after
giving peremptory direction to all
concerned in this regard;
(ii) In the event of either of the parties
failing to attend the date to be fixed
by the commissioner of partition for
auction, liberty be given to the
commissioner of partition to permit
the parties present to purchase the
said properties at their own valuation.
(iii) Ascertain and apportion the liability of the estate and
device ways and means to liquidate the same.
(iv) To complete allotment to the successful bidders within a
stipulated time as may be fixed by this Hon’ble Court.”
15
Sujit Sinha, J. on the said application by an order dated 10.09.1997
directed that Shri Nirmal Kumar Mitra to remain the sole Commissioner and
furthermore directed Shri A.P. Aggarwal, who appeared on behalf of the
appellants, to file an affidavit to the said application, the next date wherefor
was fixed on 10.03.1997.
By an order dated 10.03.1997, the learned Judge noted that the
Commissioner had made partition, allotment and demarcation of the other
properties in accordance with the decree and directed him to carry out the
order dated 11.06.1984 in respect of allotment of the remaining three
properties within four weeks, wherefor seven days’ notice was required to
be served on the parties in order to enable them to appear personally or
through their advocate and to proceed even ex-parte if any of the parties
chose not to appear.
Notice, pursuant to the said order, was served upon the learned
advocates for the parties. By way of abundant caution, however, notices
were directed to be served on three of the plaintiffs, viz., Plaintiff Nos. 1, 3
16
and 6. According to the appellants, plaintiff - appellant No. 1 herein was
unwell and away to Delhi. Plaintiff No. 3 had married long back and had
been staying in USA for more than 15 years and the plaintiff No. 6 Seema
was colluding with the defendants. No notice admittedly had been served
upon Amita, plaintiff No. 4. It, however, appears that Shri A.P. Aggarwal
appeared and sought for adjournment inter alia on the premise that Rani
Aloka Dudhoria, appellant No. 1 herein was ailing. No adjournment,
however, was granted. Liberty was given to the parties to mention the
matter before the court for extension of time. It is stated that in the
meantime the parties had changed their addresses. Amita had shifted her
residence from 48, Gariahat Road, Calcutta to 48/2B, Gariahat Road,
Calcutta.
A prayer for extension of time was made only by the counsel for the
respondents. The time was extended by three weeks, i.e., upto 7.05.1997 .
The Commissioner held a meeting on 8.05.1997. According to the
appellants, no notice was served on them. A notice, however, was sent on
28.04.1997 to M/s. Rajesh Khaitan & Co. intimating him about holding of
the meeting on 8.05.1997. According to the appellants, Mr. Anand
17
Aggarwal did not inform them despite having knowledge as regards the
changed address and contact numbers. In the said meeting, however, Seema
participated. She appeared with advocate Anand Aggarwal.
Appellants contend that she had no authority therefor.
In the said meeting, the learned Commissioner noticed the orders of
the High Court dated 20.07.1979 and 11.06.1984 so far as the same related
to auction of the property on a half and half share basis to be held by the
parties and the same was to be conducted between the two groups stating:
“(a) Bid offer shall be made with regard to 50%
interest and on acceptance of the bid, the
successful bidder will pay 10% of the
consideration immediately by cheque and
the balance within 45 days.
(b) In default of balance consideration, the
initial 10% shall stand forfeited and the bid
shall stand annulled, whereupon the other
party shall have the option to purchase the
property at the same price and on the same
terms and conditions.
(c) The successful bidder will have the
conveyance made in respect of the 50%
interest of the other party within 3 months
of the date of payment of the full
consideration and the other party shall take
necessary steps to comply therewith.
(d) Simultaneously with the payment of the
entire consideration the other party shall
hand over possession along with all
18
documents relating to title or tenancies to
the successful bidder.”
The bid in respect of the aforesaid three properties was to take place
on 9.05.1997.
Seema admittedly did not participate in the bid. Defendant No. 2
alone made a bid of Rs. 7 lakh for the Rajbari property and a bid for Rs.
75,000/- for Dharamshala property. Defendant Nos. 2 and 3 made a joint
bid of Rs. 24 lakhs for the properties situate at 91, Netaji Subhash Road.
It is not in dispute that the Rajbari property was situate on 4 bighas of
land. It contained more than 100 rooms. The Dharamshala property is a
double storeyed building situate on about one bigha of land. The Netaji
Subhash Road property is situated on 12 ½ cottahs of land. In the said bid
proceedings, it was, however, shown that the plaintiff No. 1 was allegedly
present and cheques had been handed over to her, as would appear from:
“ RAJBARI AT AZIMGANJ:
Plaintiffs –x Defendants No. 2 and 3 jointly
Rs.7,00,000/-
19
A cheque for Rs.35,000/- (Rupees thirty five
thousand) only being 5% of earnest money bearing
No. 629603 dated 09.05.97 drawn on Federal
Bank Limited, Bhowanipur, Calcutta is handed
over by Sidharth Dudhoria, the defendant No.3 to
Rani Akola Dudhoria, the Plaintiff No.1
A cheque for Rs.35,000/- (Rupees thirty five
thousand) only being 5% of earnest money bearing
No. 378915 dated 09.05.97 drawn on Federal
Bank Limited, Bhowanipur, Calcutta, is handed
over by Shri Goutam Dudhoria, the defendant
No.2 to Rani Aloka Dudhoria the Plaintiff No.1
DHARAMSHALA AT AZIMGANJ:
Plaintiffs –x Defendant No. 2 Rs.75,000/-
A cheque for Rs.75,000/- (Rupees Seventy five
thousand) only being 10% of the earnest money
bearing No. 378917 dated 09.05.97 drawn on
Federal Bank Limited, Bhowanipur, Calcutta is
handed over by Mr. G. Dudhoria, the defendant
No.2 to Rani Akola Dudhoria, the Plaintiff No.1
91, NETAJI SUBHAS ROAD, CALCUTTA
Plaintiffs –x Defendant No. 2
Rs.24,00,000/-
A cheque for Rs.2,40,000/- (Rupees Two lakhs
forty thousand) only being the agreed earnest
money bearing No. 378916 dated 09.05.1997
drawn on Federal Bank Ltd., Bhowanipur,
Calcutta is handed over by Shri Dudhoria the
defendant No.2 to Rani Akola Dudhoria, the
Plaintiff No.1”
20
The appellants contend that the plaintiff No. 1 was not and could not
have been present on the said day in the High Court as she was at Delhi.
There is no denial to such assertion.
The Defendants’ advocate served a notice asking the plaintiffs to
discharge their obligations under the conditions of sale finalised on
8.05.1997 including handing over of document relating to title, tenancies,
attornment, etc.
According to the plaintiffs, this letter had not been sent to or
forwarded to the plaintiffs. Stipulated period of 45 days expired on
20.06.1997. Allegedly, despite the same, payments had not been made by
the defendants in respect of any of the properties. A meeting was held only
on 30.06.1997 whence it was stated on behalf of the appellants that they
were not in possession of any documents in respect of properties at
Azimganj although the plaintiffs had agreed to hand over all the documents
available with them.
On behalf of the defendants/respondents, a letter dated nil addressed
to Mr. Anand Agarwal was issued, stating:
21
“In this regard we also refer you to the meeting
th
held at our office on 30 June which was attended
by you with your client. As it has been
represented by your clients through you that they
are not in possession of any paper pertaining to the
Rajbati and Dharamshala we under instruction of
our clients forward you herewith three several
cheques aggregating to Rs.6,97,500/- being the
balance payment in respect of the said two
properties for payment to your clients. It may
further be noted as agreed that you shall at your
earliest sent to us a list of documents in your
clients possession relating to 91, Netaji Subhas
Road, Calcutta and would also confirm whether all
your clients are available to sign papers relating to
transfer of the above properties and/or receipt of
such confirmation our clients would pay the
balance consideration of the said third property
alternatively an application would be made for
final disposal of the suit and upon such order as
the Hon’ble Court may direct necessary steps will
be taken.
Along with the said letter, the following cheques were enclosed, all of
which were drawn in favour of Mr. Anand Agarwal:
“1. Cheque No. 629605 dt. 1.7.97
Drawn by Siddharth Dudhoria on
the Federal Bank Ltd.
of Bhowanipore for Rs.3,15,000/-
2. Ch. No. 382712 dt. 1.7.97 drawn by Goutam Dudhoria
on the Federal Bank Ltd., Bhowanipore for Rs.67,500/-
3. Cheque No. 382713 dt. 1.7.97 drawn by
22
Goutam Dudhoria on the Federal Bank Ltd.,
Bhowanipore for Rs. 3,15,000/-“
It, however, stands admitted that the said cheques have not been
encashed. The said payments furthermore were only in relation to two of
the properties.
According to the plaintiffs, the appellant Nos. 1 and 4 allegedly
returned to Calcutta only on 17.07.1997.
It is, at this juncture, Amita Dudhoria wrote a letter dated 24.07.1997
to M/s. Rajesh Khaitan & Co. asking for copies of all the orders and minutes
of the meetings which had taken place in their absence alleging that that Mr.
Agarwal had all along been aware that Sheela Jain and herself had been
looking after the matter and that they had been away from Calcutta.
Rani Aloka Dudhoria is said to have gone back to Delhi with Seema
for treatment again on 28.07.1997. Allegedly, neither Seema nor Amita
Dudhoria disclosed about the development of the case to her. However, in
the meantime, xerox copies of the documents relating to 91 Netaji Subhash
23
Road were forwarded to the defendants by the appellants in terms of a letter
dated 23.07.1997.
Thereafter Amita alone made an application on 22.09.1997 for
cancellation of the sale of the three properties, stating:
“(1) In 1996-97, Rani Aloka, P1, and Seema, P6
had shifted from the original house to reside
together at a new place in Calcutta; she herselt
(Amita) had shifted to a separate new place.
(2) Amita had left Calcutta to stay at Delhi for a
year (1996-97) for medical treatment of her
mother, Rani Aloka, P1.”
It was prayed:
“b) The purported sale of three properties
namely premises no. 91, N.S. Road,
Calcutta 700 001, Rajbati in Azimganj and
Dharamsala at Azimganj on May 9, 1997 by
the Commissioner of Partition Mr. Nirmal
Kumar Mitra, Barrister at Law, be set aside
and/or cancelled;
d) Order dated March 10, 1997 passed by the
Hon’ble Justice Sujit Kumar Sinha be
recalled and/or set aside.
e) Commissioner of Partition and/or Receiver
be directed to make fresh inventory of all
movables and/or immovable lying inside
Rajbati, Azimganj.”
24
On the next day, i.e., on 23.09.1997, the respondents made the fifth
application for confirming the sale of all the three properties in their favour.
Appellant No. 4 took a change of her attorney from M/s. Rajesh Khaitan &
Co. to M/s. Dipak Dey & Associates.
A.N. Ray, J. (as the learned Chief Justice then was) gave an
opportunity to the appellant to bid for the three properties again but they
failed to do so. It is alleged that for the first time Mr. Anand Agarwal
informed Rani Aloka Duhoria about the application filed by Amita, Goutam
and Sidharth. Rani Aloka instructed him to oppose the application for
confirmation of sale of the defendants and to support the application of
Amita.
On 2.12.1997, Amita agreed to pay Rs. 20 lakhs in response to the
defendants’ offer and sought for six months’ time to deposit Rs. 10 lakhs
towards 50% of the amount but the High Court rejected the said prayer
stating that it was made with a view to delay the matter. The application for
confirmation of sale was, therefore, allowed, stating:
“It was urged that notice of the sale was not given
to all the parties. The advocates-on-record were
all along with notice of what was happening
before the Learned Commissioner of Partition. If
25
some party did not appear it was only because he
or she did not choose to appear.
If the history of this litigation is reviewed it will
be seen that the plaintiffs have not been active at
all in the matter of the present litigation. All steps
were taken by Mr. Chakraborty’s Clients all
along.”
The other plaintiffs also changed their lawyers replacing Anand
Agarwal with M/s Victor Moses & Co.
Two Letters Patent Appeals, one by Amita and another by other
plaintiffs except Seema, were filed, which were marked as APOT No. 742
of 1997 and APOT No. 71 of 1998.
The Division Bench by an order dated 8.01.1999, with the consent of
the parties, directed resale of the properties, stating:
“It is recorded that all allegations against Mr.
Anand Agarwal, Advocate of M/s Rajesh Khaitan
& Co., Advocates, are withdrawn. Mr. Agarwal
agrees to continue to represent Miss Sheema
Dudhoria.
Let this matter appear in the list marked “TO BE
MENTIONED” for filing of Terms of Settlement.
26
Miss Sheema Dudhoria is directed to be personally
present in Court on that date.”
Terms of settlement between the parties were considered. Some
changes were proposed. The agreed terms were signed by the parties on
28.01.1999. Amita offered a sum of Rs. 21 lakhs. An objection was raised
on behalf of Goutam and Sidharth that Amita should not be given the
opportunity to bid separately. In view of the said controversy, the Division
Bench released the matter by an order dated 29.01.1999.
We may, however, notice that whereas the Division Bench in its order
dated 8.01.1999 recorded that all allegations against Mr. Anand Agarwal
were withdrawn, a submission has been made before us that as the
settlement could not have been given effect to, the same also stood
withdrawn.
A special leave petition was preferred by Amita as also the other
plaintiffs except Seema.
By an order dated 13.03.2003, this Court refused to interfere in the
matters on the premise that the appeal had emanated from an interim order.
27
Contentions of the parties were however left open to be urged before the
High Court.
By reason of an order dated 10.02.2004, the Division Bench
dismissed the Letter Patents Appeals being APOT Nos. 742 of 1997 and 71
of 1998.
On or about 12.03.2004, cheques representing the amount of balance
consideration were forwarded by Goutam and Sidharth, which are said to
have not been encashed.
A review application was filed by the parties which has been
dismissed by reason of the impugned judgment dated 20.08.2004.
Mr. Manoj Goel, learned counsel appearing on behalf of the
appellants, would submit:
I. The impugned judgment cannot be sustained as the auctioneers had in
collusion committed fraud on the plaintiffs and/ or the court, the particulars
whereof are :-
28
(i) The application dated 22.01.1997 was moved by the defendant No.
2 after a complete lull of 13 years when the plaintiff No. 1 was
unwell and the plaintiff No. 4 was to take her to Delhi for
treatment. Thus, all proceedings took place behind their back.
(ii) At no point of time, the necessity of valuing the property having
been given up, only because a chartered valuer was not to be
appointed, the same would not mean that the property was not to
be valued at all. Plaintiffs tainted before the Commissioner as and
when they noticed therefor.
(iii) When one of the Joint Commissioners was elevated as a High
Court Judge and when a prayer had been made earlier that Mr.
N.K. Mitra be replaced by another Commissioner, the prayer for
his appointment as a sole Commissioner was an act of fraud on
court on the part of the respondents.
(iv) As the defendants knew that there was a provision for reserved
price to be fixed as per the agreement between the parties, as
would appear from the order dated 11.06.1984, the prayer
purported to have been made to value the said properties on their
individual basis was illegal. Consequently, the sale without fixing
29
a reserved price was also illegal. In any event, the sale should not
have been confirmed as the price was low and one of the plaintiffs
had outbid the defendants’ offer but stringent conditions were
imposed, viz., minimum payment despite the fact that the auction
purchaser themselves did not comply with the said conditions.
(v) A peremptory order dated 10.03.1997 was taken by the defendants
when except plaintiff No. 6, no other plaintiff was available.
(vi) The Commissioner could not have devised his own procedure as
regards service of notice despite the order dated 10.03.1997 that
notice should be served to all the parties. There was no reason to
serve notices only on plaintiff Nos. 1, 3, and 6 although it was the
plaintiff No. 4 who had been representing them. Notice was not
and could not have been served upon the plaintiff Nos. 1 and 4 as
at that point of time they were not in Calcutta. The notice dated
5.04.1997 asking the parties to appear on 10.04.1997 was for a
period of less than seven days’ despite the clear directions by the
High Court as contained in its order dated 10.03.1997. The
minutes of the meeting were again served on the Advocate and not
on the parties in violation of the court’s orders dated 11.06.1984
and 10.03.1997.
30
(vii) Four weeks’ time although had been prayed by Mr. Anand
Agarwal on the ground of illness of plaintiff No. 1, adjournment
was given for a lesser period so as to enable the defendants to
complete the entire deal within the said period.
(viii) Although the Commissioner advised the parties to seek extension
of time as the four weeks’ time had expired, an application was
made in respect thereof by the respondents without making the
appellants aware thereof.
(ix) Although the time granted by the court expired on 7.05.1997, the
purported sales were carried on 8.05.1997 and 9.05.1997 when the
Commissioner had become functus officio.
(x) Mr. Anand Agarwal had never informed the plaintiffs about the
meetings dated 8.05.1997 and 9.05.1997 and on the said dates
only defendant Nos. 2 and 3, their counsel and plaintiff No. 6 with
Mr. Anand Agarwal were present. It was for the first time that the
plaintiff No. 6 Seema ever participated in the court proceedings or
proceedings before the Commissioner.
(xi) Despite the fact that the Plaintiff No. 6 was a minor when the suit
was instituted, which fact was known to Mr. Anand Agarawal, she
not having attained majority executed a power of attorney in
31
favour of the plaintiff No. 1. She could not have represented the
plaintiffs. No such proof of authority was even asked by the
defendants, nor any proof therefor was filed. This appears to be
strange as the Commissioner who had been taking the proceedings
since 1979 knew that Sheela Jain and Amita alone were
representing the plaintiffs.
(xii) Although the property situated at Shrirampore was to be sold for
discharging joint fiscal liabilities of both the parties, one of the
conditions which was put was that the bidder shall pay and bear
the municipal and other land taxes.
(xiii) Although 10% of the consideration amount was to be paid through
a cheque drawn in favour of the plaintiff No. 1, representing the
other plaintiffs, a cheque was drawn in favour of plaintiff No. 6
who put the same in the joint account with the plaintiff No. 1 and
also withdrew the amount.
(xiv) Although in the terms of sale it was stipulated that the balance
consideration would be paid within 45 days, but the amount in
respect of Rajbari and Dharamshala properties situate at Azimganj
was tendered only on 3.07.1997 i.e. much after the said stipulated
period in violation of Clause (c)(ii) as also Clause (g) in terms
32
whereof no extension of time was permissible. No payment has
been made till date in respect of the property situated at 91, Netaji
Subhash Road property which was offered only in 2004.
(xv) Although no documents of title or other papers were available, in
respect of the properties in suit as would appear from the minutes
of the meeting of the Joint Commissioner dated 30.07.1983,
Clause (f) of the terms could not have been made a condition to be
fulfilled simultaneously with the payment of the entire balance
consideration.
(xvi) For holding of meeting dated 9.05.1998, no notice /
communication was sent to the parties except the defendants and
Seema. No inter-branch meeting took place which was in
violation of the terms of the preliminary decree. Although the
plaintiff No. 1 was not present in the meeting dated 9.05.1997, it
was shown that the cheques towards 10% payment in respect of
three properties were handed over to her which clearly points out
the fraudulent action on the part of the defendants and their
collusion with plaintiff No. 6 and even the Commissioner.
(xvii) Although the defendants were aware that no document of title was
available, in their communication dated 20.06.1997, they sought to
33
enlarge the time for payment by writing a letter just three days
prior to the expiry of 45 days period and put a condition of
simultaneously for handing over of documents.
(xviii)No explanation has been offered by Mr. Anand Agarwal as also
the plaintiff No. 6 as to why they had not objected to such tender
of payment which was contrary to the stipulated terms of sale held
on 8.05.1997 which clearly demonstrates that they had been
colluding with the defendants.
(xix) Cheques drawn in the name of Advocate on Record was no
payment in the eye of law particularly when the initial cheque in
respect of the deposit of 10% from the bid amount was drawn in
the name of the plaintiff No. 1. There is nothing on record to
show as to at whose instance the cheques were drawn in the name
of advocate and he had agreed to accept the same.
(xx) Yet again, so far as the property situated at 91, Netaji Subhash
Road is concerned, no simultaneous payment was made which was
in violation of the terms of conditions of sale. As the said
property was a tenanted one, the question of handing over of
actual physical possession thereof did not and could not arise.
34
II. The properties being impartible in nature, the sale of the said
properties could have taken place only in terms of the provisions
of Order XXVI, Rule 18 of the Code of Civil Procedure as also
those of the Partition Act.
III. The High Court in its order did not advert to the question as to
whether Seema had any authority or not to represent the appellant
wrongly but proceeded to hold that the plaintiffs, being not
diligent, were not entitled to any relief.
IV. The High Court committed a serious illegality insofar as it failed
to deal with the contentions raised by the appellants on fraud and
collusion of the parties.
V. The Commissioner had no authority to put the properties on
auction on 8.05.1997 which was beyond the period of three weeks
granted by the court.
VI. No bid having taken place either inter-parties or intra-parties and
as the defendant Nos. 2 and 3 had bid only individually the same
could not have been confirmed.
VII. As the properties were put on auction, the valuation of the
property was not relevant.
35
Mr. P.S. Narasimha, learned counsel appearing on behalf of the
appellants in Civil Appeal Nos. 6693-94 of 2004 would contend:
(i) The High Court committed a serious error to consider that the
parties were not diligent throughout on an assumption that the
matter had been going on from 1979 although diligence on their
part for a period of four months was only relevant.
(ii) As the plaintiff No. 6 was at all material time and still is
supporting the defendants, the High Court should have considered
the fact that the plaintiffs had not been present when the auction
took place.
(iii) Serious allegations of fraud and collusion made against the
advocate were withdrawn in view of the fact that a settlement
between the parties had been arrived at and as the settlement could
not be given effect to, withdrawal of allegations against him also
stood withdrawn.
(iv) The direction on the part of the learned Single Judge to deposit the
entire amount was unfair as even the defendants did not deposit
the entire amount by way of fulfillment of the condition of sale
which although raised in the review application but had not been
dealt with. As in terms of clause c(iii) of the condition of sale, the
36
amount was to be forfeited, the sale was confirmed but no payment
had been made within a period of six months.
(v) In terms of the provisions of the Partition Act, valuation of the
property was mandatory in nature. It was to be made both before
and after the preliminary decree.
(vi) Although the question as to whether a fraud has been practised or
not is a matter of proof, the High Court committed an illegality
insofar as it refused to enquire into the matter.
Mr. Sunil Gupta and Mr. Altaf Ahmed, learned senior counsel
appearing on behalf of the respondent Nos. 1 and 2, on the other hand,
would contend:
(i) The appellants did not file any application before the learned
Single Judge to challenge the sale of the plaintiffs’ share in the
said properties in favour of the defendants. They merely
supported the application of the plaintiff No. 4 who alone had filed
an application before the learned Single Judge to assail the said
sale.
37
(ii) When the plaintiff No. 2 Sheela was in Calcutta, she represented
the plaintiffs. After her marriage, plaintiff No. 4 Amita
represented the plaintiffs and when Amita also was not available,
plaintiff No. 6 Seema represented the plaintiffs because none of
the other plaintiffs were in Calcutta. She herself stated before the
Commission on 09.05.1997 that she had been authorised to attend
the meeting and to receive cheques for and on behalf of the
plaintiffs. Moreover, Seema, Amita and Rani Aloka were residing
together when Rani Aloka was in Calcutta during 1996-97. This
fact clearly shows a perfect harmony between Rani Aloka, Seema
and Amita and, thus, the allegation that Seema did not have any
authority to represent them is manifestly an afterthought.
(iii) As regards the allegation of lack of notice of the meetings before
the Commissioner, the same is also false as the plaintiffs or their
advocate had notice of all the meetings and even the terms of the
bidding were settled in presence of Seema and the plaintiffs’
advocate. Under Chapter I, Rules 6 and 13 of the Original Side
Rules of Calcutta High Court, an advocate of a party is entitled to
represent his/ her client in the suit and in all matters in connection
therewith.
38
(iv) No allegation of collusion on the part of their advocate was made
by the plaintiffs before the learned Single Judge. Furthermore, all
allegations made against their advocate were withdrawn by the
plaintiffs before the Division Bench.
(v) As regards alleged collusion between Seema and the defendants,
no evidence in support thereof has been furnished.
(vi) What happened in the meetings dated 8.05.1997 and 9.05.1997
was merely the implementation of what had earlier been agreed to
between the parties in the meetings dated 25.07.1983, 30.07.1983
and 7.07.1991.
(vii) As regards valuation of the property before bidding the plaintiffs
had agreed that valuation of the three properties was not necessary
which is evident from the orders dated 5.07.1983 and 11.06.1984
as also the minutes of the meetings dated 25.07.1983 and
30.07.1983. Moreover, there had never even been a suggestion to
the court by any side that since the property is indivisible for the
reasons stated in Section 2 of the Partition Act, there needs to be a
public sale. The sale took place only as an equitable measure for
the purposes of carrying out the division ordered in the
preliminary decree.
39
(viii) The plaintiffs have never cooperated with the defendants or the
Commissioner in implementing the orders of the court and failed
and/ or neglected to attend several meetings called by the
Commissioner.
(ix) Under Section 12 of the Limitation Act, 1963, for the purpose of
computing the limitation period, the day on which the order was
passed has to be excluded. As the last extension of time was
granted by an order dated 17.04.1997 for three weeks, it would
expire on 8.05.1997 and not on 7.05.1997. Furthermore, the terms
and conditions of the bidding process were finalized on 8.05.1997
and on 9.05.1997, only the same were given effect to.
The relationship between the parties is not in dispute. The extent of
the joint family properties is also not in dispute. We are concerned with
only 3 impartiable properties as described in Schedule ‘B’ of the plaint,
namely – premises No. 91, Netaji Subhas Road, Calcutta, Rajbari at
Azimganj and Dharamshala at Azimganj. Indisputably the said properties
were put to auction, a bidding was held by the Commissioner of Partition on
th
9 May, 1997. So far as the property - Rajbati at Azimganj is concerned,
defendant Nos. 2 and 3 had purchased it jointly for a sum of Rs.7,00,000/-
40
whereas the property commonly known as Dharamshala at Azimganj was
purchased by defendant No.2 alone for a sum of Rs.75,000/-. Similarly the
property at Netaji Subhas Road, Calcutta was purchased by defendant No.2
alone for a sum of Rs.24,00,000/-
The core question which arises for our consideration is as to whether
the said purported auction was held de’hors the provisions of the Partition
Act, 1893 or in accordance therewith. Indisputably the property situated at
Netaji Subhas Road, Calcutta, is a double storeyed building on a land
measuring 12 ½ cottah. It is situated at a prime location.
Rajbari at Azimganj has been constructed on a land measuring more
than 4 bighas. The building consists of more than 100 rooms. Indisputably
again a large number of joint movable properties situate therein. The
property known as Dharamshala at Azimganj also has a double storeyed
building situate on 1 bigha of land approximately.
Validity of the sale of the said properties, as indicated hereinbefore, is
in question inter alia on the premise that :-
41
(i) The provisions of the Partition Act have not been
complied with.
(ii) Seven out of eight plaintiffs had no notice as regards
the date fixed for auction.
(iii) Defendants/respondents in any event having not
deposited the amount required within the time
stipulated, the auction sale was required to be set
aside.
When a property is put to auction in a suit for partition, the provisions
of the Partition Act, indisputably, shall apply.
Section 2 of the Partition Act, 1893 provides that whenever in a suit
for partition in which, if instituted prior to the commencement of the Act, a
decree for partition might have been passed, it appears to the court that, by
reason of the nature of the property to which the suit relates, or of the
number of the shareholders therein, or of any other special circumstance, a
division of the property cannot reasonably or conveniently be made and that
a sale of property and distribution of the processes would be more beneficial
for all the shareholders, the court may, direct sale thereof subject to the
42
condition that the request therefor had come from a shareholder or
shareholders interested individually or collectively to the extent of one
moiety or upwards. What therefore was necessary is that there should be a
request from a shareholder ; a formal prayer to that effect may not be
necessary ; a positive finding that the property is incapable of division by
metes and bounds would be necessary and that the property cannot be
reasonably or conveniently be partitioned.
Section 3 of the Act envisages sale of the property within the
shareholders. It unlike the provisions of the Code of Civil Procedure, does
not debar a shareholder from taking part in auction inter alia on the premise
that the shareholder may be interested in keeping the property to himself. A
balance must be struck in regard to the individual interest of the shareholder
having regard to the conflicting interest in the respective bids vis-à-vis the
value of the property.
Parties have half share in each of the properties in suit. In terms of
th
the preliminary decree and order dated 20 July, 1979 valuation of the suit
property was to be done by a well known valuer. Such an order was passed
on the basis of an agreement between the parties. Ascertainment of
43
valuation of the suit property was directed in terms of Sections 2 and 3 of
the Partition Act. The said order indisputably had not been varied, altered
or modified.
Azimganj properties had initially been put in two lots. However,
subsequently the defendants-respondents through their application dated
th
16 August, 1983 took out the same from that two lots. From various
applications as also of the proceeding before the Commissioner of Partition,
no mechanism could be agreed upon for division of the said properties. It
was, therefore, a case where the requirement of Section 2 of the Partition
th
Act were clearly attracted. An application was also filed on 16 August,
1983 by the defendants/respondents stating :-
“11. Your petitioner states that in order to
obviate the question of valuation of properties a
base price be fixed from which the parties may be
at liberty to bid as was the order made His
Lordship the Honourable Mr. Justice A.K. Sarkar
th
on 20 July, 1979 and the same procedure be
followed in respect of the three properties.”
Thus, base or the reserve price was to be fixed for the said properties
also. The said decision is fortified from the Minutes of the Meeting dated
44
th
30 July, 1983 of the Joint Commissioner and the order of the Court dated
th
10 June, 1984.
Before the High Court specific ground in this behalf had been taken.
In fact there is a clear admission on the part of the defendants/respondents
th
as would appear from their application dated 16 August, 1983 that the
properties were kept out of the lots since they were incapable of partition by
metes and bounds.
It furthermore appears that in their counter-affidavit the
defendants/respondents have clearly admitted:
“Thereafter the defendants in the said suit being
Kumar Chandra Singh Dudhoria and his branch
prepared a Scheme for partition of the immoveable
properties and submitted the same to the
Commissioner of Partition. The said Scheme
suggested, inter alia, that three properties which
could not be partitioned by metes and bounds
namely Premises No.01, Netaji Subhas Road,
Calcutta, Rajbari and Dharamshala at Azimganj
(hereinafter referred to as the said properties) be
offered to the parties for sale through bidding
without valuation. The rest of the joint immovable
properties were divided into two lots viz. “A” and
“B”.
45
It may not, therefore, be correct to contend that the provisions of the
Partition Act were not attracted.
Sub-section (2) of Section 3 mandates valuation to be made by the
court at which a sale of the share or shares can be directed to be made only
when the highest price is offered to be paid by another co-sharer. Sub-
section (3) of Section 3 thereof provides that if no shareholder is willing to
buy share or shares at the price so ascertained, the applicant or applicants
shall be liable to pay all costs of or incidental to the application or
applications, which leads to the conclusion that in the absence of pre-
determining valuation in regard to the half share of the properties, the
properties in question could not have been put to auction sale.
It has been contended that the plaintiffs agreed that valuation of the
property was not necessary. The said contention cannot be accepted for
more than one reason, firstly because of the order passed by the High Court
in passing a preliminary decree, which could be varied or modified only by
a subsequent order ; secondly because once the provisions of the Partition
Act are held to be applicable, keeping in view the legal principles attracting
46
construction of Sections 2 and 3 thereof, no deviation, therefore, in our
opinion was permissible.
It is not the contention of the plaintiffs/appellants that only a public
sale was permissible in law but even in regard to agreed inter se sale
amongst the co-sharers, the provisions of the Partition Act were required to
be followed.
In K. Ramamurthi Iyer v. Raja V. Rajeswara Rao, [ (1972) 2 SCC
721 ] this Court held :-
“ The scheme of Sections 2 and 3 apparently
is that if the nature of the property is such or the
number of shareholders is so many or if there is
any other special circumstance and a division of
the property cannot reasonably or conveniently be
made the court can in its discretion, on the request
of any of the shareholders interested individually
or collectively to the extent of one moiety or
upwards, direct a sale of the property and
distribute the proceeds among the shareholders.
Now where a court has been requested under
Section 2 to direct a sale any other shareholder can
apply for leave to buy at a valuation the share or
shares of the party or parties asking for sale. In
such a situation it has been made obligatory that
the court shall order a valuation of the share or
shares and offer to sell the same to the shareholder
who has applied for leave to buy the share at a
price ascertained by the court. In other words if a
47
plaintiff in a suit for partition has invoked the
power of the court to order sale instead of division
in a partition suit under Section 2 and the other
shareholder undertakes to buy at a valuation the
share of the party asking for sale the court has no
option or choice or discretion left to it and it is
bound to order a valuation of the share in question
and offer to sell the same to the shareholder
undertaking or applying to buy it at a valuation.
The purpose underlying the section undoubtedly
appears to be to prevent the property falling into
the hands of third parties if that can be done in a
reasonable manner. It would appear from the
Objects and Reasons for the enactment of the
Partition Act that as the law stood the court was
bound to give a share to each of the parties and
could not direct a sale or division of the proceeds.
There could be instances where there were
insuperable practical difficulties in the way of
making an equal division and the court was either
powerless to give effect to its decree or was driven
to all kinds of shifts and expedients in order to do
so. The court was, therefore, given a discretionary
authority to direct a sale where a partition could
not reasonably be made and the sale would, in the
opinion of the court, be more beneficial to the
parties. But having regard to the strong attachment
of the people in this country to their landed
possessions the consent of the parties interested at
least to the extent of a moiety in the property was
made a condition precedent to the exercise by the
Court of the new power. At the same time in order
to prevent any oppressive exercise of this privilege
those shareholders who did not desire a sale were
given a right to buy the others out at a valuation to
be determined by the court.
48
As regards construction of Section 3 of the Act it was held :-
“…The language of Section 3 of the Partition Act
does not appear to make it obligatory on the court
to give a positive finding that the property is
incapable of division by metes and bounds. It
should only “appear” that it is not so capable of
division. It has further been contended that the
respondent had maintained throughout that the
property was capable of division. He could not,
therefore, take advantage of the provisions of the
Partition Act…”
[See also Sathi Lakshmana KC v. PC Mohandas, 2008 (4) KLT 401
and Smt. Rukmani w/o Late Ethraj v. Uday Kumar S/o Late B. Venkatesalu,
ILR 2008 KAR 13]
Our attention has been drawn to a decision of this Court in Badri
Narain Prasad Choudhary v. Nil Ratan Sarkar, [(1978) 3 SCC 30]. Therein
while opining that Sections 2 and 3 of the Partition Act are interlinked,
having regard to the fact that the property being small could not
conveniently and reasonably be partitioned without destroying its intrinsic
wealth, this Court evolved an equitable method to take the value of the
property as Rs 50,000/- in 1963 and allowed a reasonable increase for the
rise in price since 1963, taking into account the rise in price in the locality,
and gave the defendant the first option to retain the whole property on
49
payment of 13/16 share of that valuation (including the increase) to the
plaintiffs within a period of specified therein.
The said decision does not lay down any legal principle. In any event
it has no application to the facts of the present case, keeping in view the
extent of the properties, as indicated by us heretobefore. We may
furthermore notice that therein unfortunately attention of this Court was not
drawn to the decision of this Court in K. Ramamurthi Iyer (supra).
It was urged before us that such a question having never been raised,
this Court should not permit the same to be raised before this Court for the
first time. It, however, appears that the plaintiffs/appellants raised the said
contention in the grounds of appeal. Though raised, the same had not been
considered by the Division Bench.
In any event if the defendants-respondents intend to invoke equity
they must also do equity. As would appear from the record, apart from the
th
order passed at the time of passing of the preliminary decree dated 20 July,
1979 but also from the Minutes of the Joint Commissioner’s Meeting dated
th th
30 July, 1983 ; application of the respondents dated 16 August, 1983 and
th
from the order dated 10 June, 1984, it is clear that the provisions of the
50
Partition Act shall apply, particularly when in view of the decision of this
Court in K. Tamamurthi Iyer (supra), neither any aforementioned
application was necessary nor any specific finding thereto was imperative.
Once it is held that the provisions of the Partition Act are applicable, the
court was bound to comply with the provisions thereof. If that is the legal
principle, on interpretation of the Partition Act as also from the decision of
this Court, it must be held that the Commissioner of Partition and the High
Court failed to comply with the said provisions.
In Malati Ramchandra Raut (Mrs) v. Mahadevo Vasudeo Joshi,
[1991 Supp (1) SCC 321 ] this Court held :-
“9. It is the duty of the court to order the valuation
of the shares of the party asking for a sale of the
property under Section 2 and to offer to sell the
shares of such party to the shareholders applying
for leave to buy them in terms of Section 3 at the
price determined upon such valuation.”
We may also notice that in T.S. Swaminathan v. Official Receiver
of West Tanjore, [ AIR 1957 SC 577 ], this Court held as under :-
“14. It must be remembered that the decree was
one for partition of the properties belonging to the
51
joint family of which the Defendant 3 and the
appellant were coparceners. While effecting such a
partition it would not be possible to divide the
properties by metes and bounds there being of
necessity an allocation of properties of unequal
values amongst the members of the joint family.
Properties of a larger value might go to one
member and properties of a smaller value to
another and therefore there would have to be an
adjustment of the values by providing for the
payment by the former to the latter by way of
equalisation of their shares. This position has been
recognised in law and a provision for such
payment is termed “a provision for owelty or
equality of partition’.”
We may quote with approval the meaning of the term ‘owelty’ :-
“‘Owelty ’.— When an equal partition cannot be
otherwise made, courts of equity may order that a
certain sum be paid by the party to whom the most
valuable property has been assigned. The sum thus
directed to be paid to make the partition equal is
called ‘owelty’.”
This could clearly show that the court has no power to direct sale de’ hors
the provisions of the Partition Act.
This brings us to the question as to whether the provisions of Section
6(1) of the Partition Act have been complied with or not. Sub-section (1) of
52
Section 6 of the Partition Act mandatorily requires fixation of a reserved
price. Parties appear to have agreed thereto before the Commissioner of
th
Partition as would be cleared from the respondents’ application dated 16
August, 1983. Such a stand had also been taken by the parties before the
th
High Court as would appear from the order dated 11 June, 1984 which is to
the following effect :-
“….It has been suggested by the Advocate on
Record of the Petitioner as also of the defendants
that a base price be fixed as the reserve price and
thereafter the parties may be given the liberty to
bid for the properties and the ultimately purchaser
in turn would pay the half price to the other
party…”
It is of significance to notice that respondents in their application
nd
dated 22 January, 1997 prayed for a direction from the High Court to the
Commissioner of Partition that “they may be given leave to sell the said
properties without fixing any reserve price” as also “that a liberty be given
to the Commissioner of Partition to permit the parties present to purchase
the said properties at their own valuation.”
If the provisions of Section 6 of the Partition Act are imperative in
nature any such prayer could not have been entertained. Such a
53
leave/liberty had not been granted to the Commissioner. The Commissioner
th
was directed to carry out of the auction sale in terms of the order dated 11
June, 1984. It has been urged that the plaintiffs-appellants themselves
agreed that the properties need not be valued. However, from the order
th
dated 11 June, 1984 it appears that with a view to avoid the costs and
expenditure to be incurred toward the appointment of the valuer, it was
stated that the valuation of the properties need not be done by a valuer but
the same would not mean that the plaintiffs-respondents had themselves
agreed not to have any valuation of the properties at all. The respondents,
however, had even not denied or disputed that he had also agreed to the
same which would appear from the following statements made by
respondent No.2 in his affidavit before the High Court, which read as
under :-
“9. Your petitioner states that Advocate on
behalf of your petitioner as also the Advocates,
appearing for the other defendants had suggested
that a base price be fixed as the reserved price and
thereafter the parties may bid for the properties
and ultimate purchaser shall have to pay the half
price to the other party in order to obviate the
costs and expenditure involved in having the
properties valued by a valuer but the said
suggestion was never acceded to by the plaintiffs.
In this connection the copies of the minutes of the
th th
meeting dated 25 July 1983 and 30 July 1983
are annexed hereto and collectively marked as ‘D’.
54
… … …..
12. Your petitioner further states that if the
properties are to be valued by a valuer the
minimum costs of such valuation would be about
Rs.25,000/- and your petitioner is not in a position
to afford such expenses in respect of such
valuation. If the procedure suggested by your
petitioner is accepted neither the plaintiffs nor the
defendants would be prejudiced in any way but
expenses for valuation of the properties can be
dispensed with.”
th
We may also notice from the order sheet dated 11 June, 1983 that
the Court had allowed the prayers (b) & (c) of the petition and not of
‘Notice of Motion’ where prayer (b), as noticed hereinbefore, was to the
following effect:-
“b) Directions be given to the Joint
Commissioner of Petition regarding allotment of
properties being premises no. 91, Netaji Subhas
Road, Calcutta, Rajbati at Azimganj and
Dharamshala at Azimganj.”
This court would go by the records of the High Court and not by the
prayer made in the notice of motion.
55
No application for modification of that order had been prayed for. In
any event the said order could not have been passed in supersession of the
th
order dated 20 July, 1979. Valuation of a property of this nature even, in
the interest of justice, is to protect the rights of the parties. Code of Civil
Procedure provides therefor as would appear from Order XXI Rule 72A(2).
Although the said provision may not ipso facto available but we are
referring thereto, as apart from the fact that the court had such a duty to fix
the reserve price, this Court in D.S. Chohan v. State Bank of Patiala,
[ (1997) 10 SCC 65 ] had set aside the sale for not complying with the
statutory provisions of fixing the reserve price under Order XXI Rule 72A
(2) of the Code of the Civil Procedure.
We have been taken through the conduct of the parties in great detail.
Even if for the time being we keep aside non-appearance of some of the
plaintiffs-appellants at each stage of the proceedings before the
Commissioner(s) of Partition, it is clearly borne out from the records that
admittedly notices had been issued by the Commissioner of Partition only to
th
three plaintiffs on 5 April, 1997, namely plaintiff No1 ; plaintiff No.3 and
plaintiff No.6. Why no notice was issued to Amita Dudhoria has not been
explained. It is difficult to comprehend that only three of them were
56
chosen, - one of them being ill, another being in U.S.A. for more than 26
years and another allegedly colluding with the defendants.
It is not necessary for us to delve in detail in regard to the conduct of
Shri Anand Aggarwal, Advocate, but in view of Rule 18 of Order XXVI of
the Code of Civil Procedure, there cannot be any doubt, whatsoever that the
Commissioner should have issued notice to all the parties.
Mr. Manoj Goel has placed reliance on a large number of decisions
before us to contend that Rule 18 of Order XXVI is mandatory. We,
however, need not advert to the said decisions as atleast seven out of eight
plaintiffs contend before us that they did not have notice of bidding. None
of the plaintiffs have been shown to have bid for any of the three properties.
It is unlikely that they would stay out even if they had notice and allowed
the defendants to bid behind their back. Sheema Dudhoria evidently had
been supporting the defendants. Even the learned Single Judge recorded
that she had given instructions to support the case of the defendants.
Such a notice was also necessary as in a suit for partition each party
has an individual right. One of them atleast is siding with the defendants.
Even the plaintiffs admittedly had received payment in part. Even the
57
defendants did not offer the bid jointly. Defendant No.2 in his individual
capacity had offered his bid in one of the properties in his individual name
and only with defendant No.3 in respect of one of the properties.
It must also be placed on record that the High Court in its order dated
th
10 March, 1997, categorically directed the Commissioner of Partition to
give at least 7 days’ clear notice to the parties before holding any such
meeting so as to enable them to be present personally or through their
advocates. Issuance of such a notice was imperative in character.
In D.S. Chohan v. State Bank of Patiala [(1997) 10 SCC 65], this
Court held:
“…An objection was raised by the appellants
against the acceptance of the said bid of the
respondent on the ground that there was non-
compliance with the mandatory provisions of
Order 21, Rule 72-A CPC. The said objection was
rejected by the learned Single Judge and the
appeal filed by the appellants has been dismissed
by the Division Bench of the High Court by the
impugned judgment.
3. In view of the specific requirement contained in
sub-rule (2) of Rule 72-A of Order 21 CPC that in
cases where leave to bid is granted to the
mortgagee, the Court shall fix a reserve price as
regards the mortgagee and unless the Court
otherwise directs the said reserve price has to be in
consonance with requirement of clauses (a) and
(b), it was incumbent for the Court to fix the
58
reserve price. In the order dated 2-1-1981 the
Court, while permitting the respondent mortgagee
to make the bid, did not give any direction
regarding fixing the reserve price. The sale in
favour of the respondent having been made in
violation of the mandatory provisions of Order 21,
Rule 72-A(2) CPC cannot be upheld and has to be
set aside.”
A Division Bench of the Kerala High Court in Nedungadi Bank Ltd.
v. Ezhimala Agrl. Products [2003 (3) KLT 1011] while opining that
“reserve price” and “upset price” though analogous and almost homologous
but are not synonymous, stating:
“…While understood in the context in which the
expression is employed in the code, "reserve
price" means a price reserved at an auction as the
minimum amount realisable by sale of the property
so as to realise the entire mortgage debt or a
proportionate portion of the mortgage debt- a price
which will remain static during the sale unless the
court on grounds of genuine diffidence on the side
of the decree-holder chooses to reduce the same.
Fixation of reserve price is peculiar to situations
where court grants permission to mortgagee-
decree-holders to bid in the auction. Upset price
and reserve price are certainly the lowest prices for
which the properties will be sold in auction. But
the term "reserve price is exclusive to mortgagee-
purchasers. The term "upset price" is used
generally in respect of purchases by all others
including third parties. When upset price has been
59
fixed, the bid should commence with that price
and the sale will ultimately be held for an amount
higher than that price. But in the case of reserve
price, the bid can commence with the upset price
which may be an amount below the reserve price.
But the moment the mortgage-decree holder avails
the leave granted to him by the court, the sale will
be knocked down in his favour for the reserve
price, though nothing prevents a conscientious
decree-holder from bidding and purchasing for a
higher amount.”
Emphasizing the need to comply with the statutory rules as contained
in various provisions under Order XXI of the Code of Civil Procedure, this
Court in Manilal Mohanlal Shah and Others v. Sardar Sayed Ahmed Sayed
Mahmad and another [AIR 1954 SC 349] held that the inherent power of the
court cannot also be resorted to circumvent the mandatory provisions of the
Code.
This Court in Laxmikant Chhotelal Gupta v. State of Maharashtra,
[ (2007) 5 SCC 713 ] clearly held :-
“14. Even when an auction takes place under
orders of the competent civil court, the procedures
laid down in the Code of Civil Procedure are
required to be complied with. Objections to the
validity of sale at the instance of one party or the
other are required to be considered and
determined. Even an appeal lies against such an
60
order in terms of Order 43 Rule 1( u ) of the Code
of Civil Procedure.
15. Provisions of a statute, whether directory or
mandatory, necessitating strict or substantial
compliance are questions which must be
determined by the courts. This Court thought that
the High Court would do so. Presumably the effect
and purport of this Court’s order having not been
brought to its notice, we, therefore, are of the
opinion that the matter should be directed to be
considered afresh by the competent authority. We
are informed at the Bar that Respondent 4 being
Assistant Commissioner of Sales Tax is the
competent authority therefor. We, therefore, while
setting aside the order of the High Court would
direct the said authority to consider the
contentions raised by the appellants herein on their
own merits.”
A large number of circumstances had further been brought to our
notice to establish collusion and fraud. We may notice some of them.
th
The application dated 20 January, 1997 was moved after 13 years at
the time when plaintiff No.1 was unwell and plaintiff No.4 had to take her
to Delhi for treatment. No court proceeding had taken place for 13 years.
A reserved price had not been fixed. Notices had not been given to all the
61
parties. For the said purpose, the Commissioner could not have devised his
own procedure.
Sheema Dudhoria had shown an unusual interest in attending the
meetings allegedly without instructions from other plaintiffs. Even Anand
Agarwala, Advocate, appeared without notice. He did not raise any
objection in that regard and even accepted the cheque after the expiry of 45
days wherefor no order of the court or the Commissioner of Partition was
obtained.
If any auction had taken place by fraud or collusion the same is non
est in the eyes of law. We are not suggesting that mere suspicion of fraud
would amount to proof thereof but the High Court in our opinion should
atleast have gone into such a question. The Division Bench, in our opinion,
should also have gone into this question. If it required proof, the question
should have been clearly answered by referring to the documents and other
materials on record so as to enable it to arrive at a finding that no fraud or
collusion had taken place. A finding to that effect one way or the other was
required to be arrived at. The Division Bench proceeded on the basis that
despite notices the plaintiffs did not participate in the proceeding without
62
considering as to whether their plea that they did not receive any notice was
correct or not. Even the learned Single Judge did not return any finding.
The learned Single Judge did not frame any issue. Furthermore some
material irregularities had also taken place in the conduct of auction. Notice
of clear 7 days had not been given to the plaintiffs. Only 10% of the sale
amount was received by plaintiff No.6. Even that amount was in the name
of Rani Aloka Dudhoria. The cheque was deposited in the joint account
which was withdrawn by her alone.
On one occasion the High Court declined to confirm sale in favour of
the appellants when six months’ time had been asked for the purpose of
deposit of the amount. However, such a request on the part of plaintiff
No.4-appellant had not been acceded to.
The defendants-respondents did not deposit the amount within 45
days of the date of auction. It is stated that no payment had been made in
respect of the property 19, Netaji Subhash Road, Calcutta. The cheque was
made in the name of the Advocate on record. Although initially the cheque
was drawn in the name of plaintiff No.2, there was no such stipulation
therefor. Any payment made to Anand Aggarwala after the expiry of the
stipulated period of 45 days must be held to be in violation of the terms and
63
th
conditions stipulated in regard to the sale of the property dated 8 May,
1977.
In Behari Kunj Sahkari Avas Samiti v. State of U.P. & Ors. [2008
(10) SCALE 551], this Court observed:
“13. In State of A.P. and Anr. v. T. Suryachandra
Rao [2005(6) SCC 149] it was observed as
follows:
By "fraud" is meant an intention to deceive;
whether it is from any expectation of advantage to
the party himself or from the ill will towards the
other is immaterial. The expression "fraud"
involves two elements, deceit and injury to the
person deceived. Injury is something other than
economic loss, that is, deprivation of property,
whether movable or immovable or of money and it
will include and any harm whatever caused to any
person in body, mind, reputation or such others. In
short, it is a non- economic or non-pecuniary loss.
A benefit or advantage to the deceiver, will almost
always call loss or detriment to the deceived. Even
in those rare cases where there is a benefit or
advantage to the deceiver, but no corresponding
loss to the deceived, the second condition is
satisfied.”
Fraud as is well known vitiates all solemn acts. Suppression of a
document, it is also trite, may amount to fraud on the court. The effect of
64
commission of fraud must be taken note of. [See also Bank of India and
Another v. Avinash D. Mandivikar and Ors. (2005) 7 SCC 690]
For the views we have taken, it is not necessary for us to go into the
questions of fraud and collusion in details. The impugned judgments of the
High Courts are set aside. We, however, keeping in view the peculiar facts
and circumstances of the case and in exercise of our jurisdiction under
Article 142 of the Constitution of India would issue the following
directions:-
(a) The matter shall be fixed before the learned Single Judge of the
High Court under the heading “FOR BEING MENTIONED”
on 6.04.2009, on which date all the parties shall remain present
either personally or through their learned Advocates. No
separate notice therefor need be issued.
(b) The High Court shall pass an order as regards the valuation of
the properties under the provisions of the Partition Act.
(c) The High Court may either by itself or through the
Commissioner of Partition or any other
65
Advocate/Commissioner cause an inter party auction to be held
on a date to be fixed therefor.
(d) All amounts deposited or paid to the parties by respondent
No.2 and/or 3 shall be returned to them forthwith. If in the
parties auction sale is not found to be possible, the High Court
may pass such other order/orders as may deem fit and proper.
The appeals are allowed with the aforementioned directions. There
shall be no order as to costs.
………………………J.
( S.B. SINHA )
………………………J.
( CYRIAC JOSEPH )
New Delhi
March 05, 2009