(Prayer: This Writ Petition is filed Under Article 227 of the Constitution of India praying to set aside the order dtd:20.2.2016 passed in I.A.No.VI in F.D.P.No.10/2012 on the file of the Senior Civil Judge Kundapura vide Annexure-A.)
1. Petitioners, in this writ petition, are challenging the Order dated 20.2.2016 allowing I.A.No.6 filed by respondents No.1 to 4 in FDP No.10/2012.
2. Heard Sri.K.A.Ariga for Sri.K.S. Ranjith learned Counsel for the petitioners and Sri. Vighneshwar S. Shastri, learned Counsel for Respondents No.1 to 4.
3. Respondents No.1 to 4 brought a suit, O.S.No.5/2010 for partition and separate possession of their 70/432 share in A and B schedule properties. It was decreed and a preliminary decree was drawn. Respondents No.1 to 4 were granted 20/144th share in suit schedule A property. Petitioner No.1 was granted 40/144th share, respondents No.5 to 7 were granted 12/144th share each and petitioner No.2 and respondent No.8 were granted 24/144th share each in A schedule property.
4. Respondents No.1 to 4 filed FDP No.10/2012 and sought for appointment of a Court Commissioner to partition the A schedule property into 432 equal shares and to deliver 70 shares to them. An Advocate by name Sri. Prakash Chandra Sheetty Giliyaru was appointed as a Court Commissioner. He submitted a report taking assistance of a qualified Civil Engineer. Second petitioner herein raised certain technical objections. Parties agreed to purchase different items in A schedule property as per their convenience. First petitioner offered to purchase the said item No.5. Parties also agreed that the sale proceeds as per agreed valuation should be deposited before the Court immediately after submission of report by the Court Commissioner. Purchasers of items 1 to 4 were ready to deposit the value of property which they had agreed to purchase at that stage. Second respondent filed an objection stating that value fixed for item No.5 is on the higher side.
5. First respondent filed the instant I.A.6 under Section 3 of the Partition Act, 1893 ( Act for short) read with Section 151 CPC and prayed that A schedule properties be sold by public auction either in one lot or separately for the highest market value and proceeds thereof be deposited before the Court for distribution among the share holders.
6. It is contended in the affidavit filed by the first respondent in support of I.A.No.6 that the second petitioner is coming in the way of resolving the matter amicably by raising objections with regard to valuation. All parties had agreed and fixed the value of item No.5 at Rs.4.5 lakhs per cent. Second petitioner expressed his desire to purchase item No.5 voluntarily. Accordingly, Commissioner prepared a mahazar, and the same was signed by the second petitioner also.
7. In sum and substance, case of the first respondent applicant is that the second petitioner had agreed to purchase item No.5 in A schedule property at the rate of Rs.4.5 lakhs per cent and subsequently went back on his offer. Thus, he is making attempts to prolong the FDP proceedings. With these averments, first respondent prayed before the Court below to order for a public auction. Second petitioner opposed I.A.No.6. On consideration of the material on record, Court below has allowed the said I.A. and permitted public auction of A schedule property by fixing the upset price at Rs.4.5 lakhs per cent in respect of item No.5.
8. Assailing the correctness of the impugned order, Sri.K.A. Ariga, learned Counsel for the petitioners submitted that Sections 2 and 3 of the Act are not applicable to the facts of this case. Section 2 of the Act can be pressed into service in special circumstances only where the division of the property cannot be reasonably and conveniently made. In the instance case, it is clear from the Commissioner s report that all the properties are divisible. Therefore, the impugned order is contrary to law.
It is next argued by him that even if it is assumed that Section 2 of the Act could have been invoked, yet the impugned order is unsustainable because the procedure laid down in Section 3 has not been complied with. Thus, the impugned order is bad in law and liable to be set aside by allowing this writ petition.
9. Per contra, Sri Vigneshwara S. Shastri, learned Counsel for the respondents submitted that there is no dispute with regard to other properties except item No.5 in A schedule property. By mutual consent, the valuation was fixed at Rs.4.5 lakhs per cent. Second petitioner had agreed to purchase the same. In order to prolong the proceeding, he went back on his offer. Therefore, the instance I.A. was filed seeking sale by public auction. Countering the argument of the petitioners, Sri Shastri submitted that in view of the conduct of the second petitioner, the property could not be divided conveniently. Therefore, Section 2 of the Act can be pressed into service. So far as Section 3 is concerned, he submitted that the valuation of Rs.4.5 lakhs per cent was by mutual consent in the presence of Commissioner. Now that sale is permitted by public auction with Rs.4.5 lakhs as reserve/upset price, the petitioners should not have any grievance. Accordingly, supporting the impugned order, he prays for dismissal of this writ petition.
10. Facts are not in dispute in this case. There are five items in suit schedule A properties. Commissioner s report is placed for perusal of this Court. It discloses that there were mutual discussions between the parties and they have agreed on the valuation of properties. They have further agreed to take different properties and pay value. Thus, it appears, parties agreed on the valuation of properties and divided them among themselves. They have also agreed to deposit the value of respective properties so that the amount pooled in could be distributed in the ratio of their respective shares. There is no dispute with regard to items No.1 to 4.
11. The second petitioner herein agreed to purchase item No.5 but went back on his offer. All parties except the second petitioner herein were anxious to deposit the amount in respect of the properties which they had agreed to purchase and to see that the final decree proceedings were concluded. However, the second petitioner on one pretext or the other was avoiding and got objections filed through his month with regard to the valuation of the property. In such circumstances, respondents No.1 to 4 filed instance I.A.6 with a prayer to order for sale of A schedule property by public auction. It is stated in the affidavit filed in support of the I.A. that due to sudden death of first respondent s husband, she and her children are driven to penury. Accordingly, the instant I.A. was filed requesting the Court to order for sale of A schedule properties. Second petitioner filed a short counter which reads as follows:
COUNTER FILED BY THE OPPONENT NO.5
It is submitted:
1. That the application filed by the petitioners at this stage is not maintainable.
2. That the commissioner can use other mode for dividing the suit schedule properties on the basis of the market value agreed by the parties and only in such case where some item of the suit schedule properties cannot be divided, the commissioner can suggest for the auction.
3. It is therefore prayed that the application filed by the petitioners may be dismissed with cost in the interest of justice.
It is significant to note that the tenor of the counter extracted above clearly indicates that the second petitioner has admitted the valuation.
12. The trial Court on consideration of material on record has allowed the I.A. In the early portion of the impugned order (Paragraph No.11), the learned trial Judge has held that Sections 2 or 3 of the Act are not applicable. However, in the concluding paragraph, the learned trial Judge has held that it is a fit case to invoke Sections 2 and 3 of the Act and allowed the I.A.
13. Section 2 deal with power of Court to order sale of property in lieu of division. Section 3 contains the procedure when sharers offer to buy the shares of party/s.
14. Section 2 envisages 3 contingencies. Where ever, it appears to the Court that firstly by reason of nature of the property , secondly by the number of shareholders and thirdly, due to any other special circumstances a division of a property cannot be either reasonably or conveniently be made, the Court may on the request of any shareholder, direct sale of the property and distribution of its proceeds.
15. In the instant case, parties have agreed on the valuation of suit schedule properties. The respective parties have also agreed to purchase the property chosen by them at the agreed price. The parties who chose items 1 to 4 in A schedule property were diligently looking forward to conclude the execution proceedings. It is the second petitioner herein who had agreed to purchase item No.5 has gone back on his offer.
16. Shri Ariga s arguments are in two limbs. Firstly, that Sections 2 and 3 are not applicable to the facts of this case. Secondly, that the Court below erred in not following the procedure prescribed in Section 3 of the Act.
17. Both limbs of arguments advanced by the learned Counsel should fail for the following reasons:
a) Though I.A.6 is filed under Section 3 of the Act, the prayer contained therein is to permit the Commissioner to sell A schedule properties by public auction for the highest market value. Therefore, it must be held that the said I.A. is indeed one under Section 2 of the Act.
b) Section 2 of the Act empowers a Court to direct sale of property and distribution of proceeds. The underlying purpose of a Final Decree Proceeding in a partition suit is to ensure that the decree of Court is translated into physical delivery of respective properties to the shareholders in a just and appropriate manner. In the case on hand, the executing Court did appoint a Commissioner. All parties agreed on the valuation of the five properties in the A schedule. They further agreed to purchase the item/s of their choice. Shareholders who had chosen items No.1 to 4 were anxiously looking forward to pay the value fixed for the property chosen by them. Had the second petitioner also honoured his commitment to purchase item No.5 and deposited the agreed value, it would have concluded the final decree proceeding to the satisfaction of all concerned. His retraction compelled the applicants in I.A.6 to make an avoidable request to the Court below to order for sale of A schedule properties by public auction. The contingency which emerged as a result of second petitioner s rescission to honour his commitment, in my opinion, is a special circumstance found in Section 2 of the Act. The contents of the I.A. are clear and unambiguous and contain a request for sale of the schedule A property by a public auction;
c) the second limb of petitioner s argument with regard to procedural irregularity in not obtaining a valuation report is also fallacious because a Court will have to embark upon ordering for valuation, only if it receives a request by any of the shareholder/s seeking leave to buy a share or shares of the parties. In the case on hand, the request of the applicants in the I.A. was to order for sale by public auction. None of the shareholders had applied seeking leave of the Court below to buy any share or shares. Therefore, in the given set of facts, Section 3 had no application at all.
d) An executing Court has been given discretionary authority to direct a sale where partition cannot reasonably made and in the opinion of the Court, sale is more beneficiary; it may be profitable to quote the following passage from the judgment of the Hon ble Supreme Court in the case of R. Ramamurthi Iyer v. Raja V. Rajeswara Rao, reported in 1972 2 SCC 721 at page 726 and it reads thus:
8. The Partition Act was enacted to amend the law relating to Partition Act. Section 2 and 3 are as follows:
2. Whenever in any suit for partition in which, if instituted prior to the commencement of this Act, a decree for partition might have been made, 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 the property and distribution of the proceeds would be more beneficial for all the shareholders, the Court may, if it thinks fit, on the request of any of such shareholders interested individually or collectively to the extent of one moiety or upwards, direct a sale of the property and a distribution of the proceeds.
3.(1) If, in any case in which the Court is requested under the last foregoing section to direct a sale, any other shareholder applies for leave to buy at a valuation the share or shares of the party or parties asking for a sale, the Court shall order a valuation of the share or shares in such manner as it may think fit and offer to sell the same to such shareholder at the price so ascertained, and may give all necessary and proper directions in that behalf.
(2) If two or more shareholders, severally apply for leave to buy as provided in sub-section (1) the Court shall order a sale of the share or shares to the shareholder who offers to pay the highest price above the valuation made by the Court.
(3) If no such shareholder is willing to buy such share or shares at the price so ascertained, the applicant or applicants shall be liable to pay all costs of or incident to the application or applications.
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 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 ali 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.
18. Though the trial Court was oscillating with regard to the application of Sections 2 and 3 of the Partition Act, it has ultimately allowed the I.A. and ordered for sale of suit schedule A properties. Section 3 is clearly not applicable to the facts of the case. But having allowed the I.A. filed under Section 2 of the Act, it was mandatory for the Court below to comply with Section 6 of the Act and to fix a reserve price . Without referring to Section 6, the Court below has fixed an upset price of Rs.4,50,000/- per cent for item No.5. With regard to the reserve price of other properties in the A schedule namely, items No.1 to 4, the Court below has held that it shall be as fixed by the Court Commissioner. This is impermissible. Section 6 mandates that the reserve price shall be fixed by the Court. Therefore, the Court below ought to have fixed the reserve price of items No.1 to 4 also.
19. In view of above discussion, this writ petition should succeed in part due to non-compliance of Section 6 of the Act.
20. In the result, the following:
i) Writ petition is allowed in part;
ii) The impugned order to the extent of non-compliance of Section 6 of the Act in not fixing the reserve price in respect of items No.1 to 4 in schedule A property is set aside;
iii) The matter is remitted back to the Court below with a direction to fix the reserve price in respect of items No.1 to 4 in schedule A property and thereafter, proceed further.
Petition allowed in part. No costs.