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Prabhakar Dinanath Vs. Shaligram Dinanath and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtMumbai High Court
Decided On
Case NumberO.C.J. Appeal No. 68 of 1953
Judge
Reported inAIR1954Bom256; (1954)56BOMLR87; ILR1954Bom682
ActsBombay High Court Original Side Rules - Rules 502 and 523; High Court Rules; High Court Orders - Order XXI
AppellantPrabhakar Dinanath
RespondentShaligram Dinanath and ors.
Appellant AdvocateR.B. Andhyarujina, Adv.
Respondent AdvocateK.T. Desai, Adv.
Excerpt:
- - in our opinion, it is unnecessary to decide that question as it is clear that the appeal must fail on merits. ' rule 523 is clearly mandatory in its language and, the court is empowered to open a bidding only on the grounds mentioned in rule 523 and those grounds are fraud or misconduct in the management of the sale or the fact of the purchaser being disqualified from purchasing by reason of holding a fiduciary position, and it is not disputed that the ground on which the appellant attempted to have the bidding opened does not fall within the ambit of rule 523. but what is urged by mr. rule 502 is clearly procedural. andhyarujina has pointed out to us, has been borrowed from an old english statute and it is rather interesting to note how that english statute came to be enacted......7 and that section points out that it was the settled practice of courts of equity in england to open biddings in sales by auction of land even more than once and that practice caused much inconvenience and the parliament was anxious that the courts of equity should no longer have the power to open biddings and, therefore, section 7 was enacted, and that section laid down that the practice of opening biddings shall be discontinued, unless the court or judge shall, on the ground of fraud or improper conduct in the management of the sale, open the biddings.therefore, it was in order to circumscribe the discretion of the courts of equity in england that the parliament had to enact section 7, and in england the discretion of the courts of equity was limited to opening biddings to the two.....
Judgment:

Chagla, C.J.

1. Respondents Nos. 1 and 2 and the appellant are brothers and respondent No. 3 is the mother. The appellant filed a partition suit, the family being a joint and undivided Hindu family, and the partition sought was a partition of property belonging to the Joint family. A preliminary decree in this suit was passed on November 21, 1950. On January 25, 1952, the Court directed that an immovable property belonging to the joint family should be sold by the Commissioner either by public auction or by private contract. On November 14, 1952, pursuant to this order the Commissioner put up the property to auction. The -highest bid reached was Rs. 70,000, and as that bid did not come up to the reserve bid fixed, the auction was postponed.

On April 2, 1953, the Court reduced the reserve bid and the property was again put up for auction on May 13, 1953, when Rs. 70,500 were offered by respondents Nos. 1 and 2, and that being the highest bid and as that came up to the reserve bid, the property was knocked down. On July 4, 1953, the appellant took out a chamber summons to set aside the sale on the ground that the trustees of Seth Chaganlal Walchand Jain Maternity Hospital were prepared to offer Rs. 75,500 for this property. The trustees backed out of this offer and on July 11, 1953, the appellant made an affidavit on the summons, stating that another person by the name of Ardeshir Baxai was prepared to offer Rs. 76,000. The Chamber Judge dismissed the summons on July 13, 1953.

On July 17, 1953, the respondents applied for confirmation of the sale. The appellant contended before the learned. Judge that the sale should not be confirmed in view of the higher offer made by Baxai. The learned Judge rejected that contention and confirmed the sale on July 20, 1953. It is against this order that this appeal is preferred.

2. Mr. Desai for the respondents has raised a preliminary point that the appeal does not lie inasmuch as the appellant did not prefer an appeal from the order dismissing the summons. In our opinion, it is unnecessary to decide that question as it is clear that the appeal must fail on merits. Now, this is not a sale which has been effected in execution of a decree and, therefore, It is clear that O. XXI has no application. The sale is governed by the High Court Rules framed for regulating the procedure on the Original Side and the two rules which we have to consider are Rules 502 and 523.

Rule 523 provides: 'No bidding shall be opened, except with the consent of the purchaser, or unless it be shown that there has been fraud or misconduct in the management of the sale, or that the purchaser, by reason of being in a fiduciary position, was disqualified from purchasing.' Rule 523 is clearly mandatory in its language and, the Court is empowered to open a bidding only on the grounds mentioned in Rule 523 and those grounds are fraud or misconduct in the management of the sale or the fact of the purchaser being disqualified from purchasing by reason of holding a fiduciary position, and it is not disputed that the ground on which the appellant attempted to have the bidding opened does not fall within the ambit of Rule 523.

But what is urged by Mr. Andhyarujina is that although the language of Rule 523 is mandatory, Rule 502 gives a discretion to the Court not to confirm a sale on grounds other than those mentioned in Rule 523, and turning to Rule 502, it provides:

'No sale of immoveable property made under this chapter, shall become absolute, until it has been confirmed by the Court.'

3. Now, in our opinion, it is impossible to contend that although the Court is precluded from going behind the auction on any ground other than the grounds mentioned in Rule 523, when it comes to confirm a sale it can extend its jurisdiction and refuse to confirm the sale on some other ground. Rule 502 is clearly procedural. Iti provides that before a sale can become absolute,] the purchaser must obtain as it were an impri-' matur of the Court. It is the confirmation by the Court that gives the title to the purcrtaser. But Rule 502 does not deal with the grounds on which the Court may refuse to confirm the sale. Those grounds are to be found in Rule 523, and if the person who challenges the sale does not bring his challenge within the ambit of Rule 523, he cannot sustain that challenge when the time comes for the Court to confirm the sale under Rule 502.

The language of Rule 523 seems to be rather quaint. 'No bidding shall be opened' is an expression which, Mr. Andhyarujina has pointed out to us, has been borrowed from an old English statute and it is rather interesting to note how that English statute came to be enacted. The statute in question is 30 and 31 Vic. c. 48, and this particular point has been dealt with in Section 7 and that section points out that it was the settled practice of Courts of Equity in England to open biddings in sales by auction of land even more than once and that practice caused much inconvenience and the Parliament was anxious that the Courts of Equity should no longer have the power to open biddings and, therefore, Section 7 was enacted, and that section laid down that the practice of opening biddings shall be discontinued, unless the Court or Judge shall, on the ground of fraud or improper conduct in the management of the sale, open the biddings.

Therefore, it was in order to circumscribe the discretion of the Courts of Equity in England that the Parliament had to enact Section 7, and in England the discretion of the Courts of Equity was limited to opening biddings to the two cases mentioned in that section. Therefore, Rule 523 follows the language of Section 7 and it is only different in this respect that a further ground is provided in Rule 523 which would entitle a Court to open a bidding and that ground is the disqualification of the purchaser on the ground of his holding a fiduciary position.

Therefore, both in England and on the Original Side of the High Court the position is identical. It is not open to the Court to open a bidding in its discretion. The bidding can only be opened on the grounds mentioned in Rule 523, and if none of those grounds exists, the Court has no power to go behind the auction, open the bidding and allow the property to be re-sold to some other higher purchaser. It is equally clear that if the Court has no discretion to travel outside the ambit of Rule 523, it has no discretion also to refuse to confirm the sale, unless it has the power under Rule 523 to open the bidding.

4. The result, therefore, is that the appeal fails and must be dismissed with costs. Liberty to the respondents' attorneys to withdraw the sum of Rs. 500 deposited in Court as security for costs.

5. Appeal dismissed.


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