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Dodbasappa Dharmappa Vs. Pradhanappa Venkappa - Court Judgment

LegalCrystal Citation
Decided On
Case Number Second Appeal No. 585 of 1923
Reported inAIR1926Bom33; (1925)27BOMLR1318
AppellantDodbasappa Dharmappa
RespondentPradhanappa Venkappa
Excerpt: particulars were given of the fraud alleged. one of the issues raised at the trial was : is the sale fraudulent and illegal as alleged by defendant. evidence was led by the parties on the issues framed. at the conclusion of the case the trial judge sent for the record of the execution proceedings and on going through it raised suo motu additional issues to ascertain if the plaintiff had practised fraud upon the executing court by exaggerating the amount of the encumbrances on the land, and getting the land sold for a small amount; and the parties were allowed to adduce additional evidence. no fresh evidence was led; but by consent two depositions taken in a previous case were brought on the record. the court found that the plaintiff was guilty of the misrepresentation alleged and..........allegation of fraud instead of its being generally framed as was the case namely, ' is this court sale fraudulent and illegal as alleged by defendant no. 4 v ' however that may be, the trial proceeded on issues nos. 1 to 7 as originally framed. thereafter the learned subordinate judge in his anxiety to do justice between the parties felt that a perusal of the record of the execution proceedings was necessary and adjourned the case in order to enable him to send for the record and to deliver judgment. he sent for the record and went through it, evidently with very great care, it appeared to him that other suspicious circumstances, not brought to his notice, in the pleadings existed; and thereupon suo motu he framed issues nos. 8 to 11 and adjourned the suit to enable both sides to otter.....

Madgavkar, J.

1. The plaintiff-appellant Dodbasappa purchased the right title and interest of defendant No. 3 Shiddappa and defendant No. 4, Pundappa, in the land in suit in execution of a money decree against them in favour of Rangrao in Suit No. 62 of 1905. The sale was confirmed and the appellant got the sale certificate in 1907. The present suit is for possession Defendants-respondents Nos. 1 and 2 refuse to give him possession on the ground that they are in possession as mortgagees and that the mortgage has not expired. The suit is also resisted by defendants Nos. 3 and 4 on the ground that the appellant has been guilty of fraud in execution. Both the lower Courts have upheld the respondents' plea and dismissed the suit. The plaintiff appeals.

2. The precise issues found in both the lower Courts were that the execution had proceeded without notice to respondent No. 4 and that the appellant was guilty of this fraud as well as of misrepresentation to the Court at the time of sale that there was a mortgage of Rs. 2,500 on the property, whereas the actual mortgage amount was less. He thus induced the Court to confirm the sale though the price realised was Be. 325.

3. Four main points are taken in the appeal for the appellant. (1) The respondents having failed to pursue their remedy to set aside the sale as laid down under Order XXI, Rule 90, cannot now set up the present defence without first setting aside the sale by way of application or suit. (2) Respondent No. 4 failed in his pleadings to give the necessary particulars of the fraud; and the fraud held proved was based on a new case set up by the trial Court and not raised by respondent No 4. (3) The findings of fraud were based not upon the legal evidence but were surmises arrived at by irregular procedure. (4) A.8 in any case, defendant-respondent No. 3, who was admittedly as owner of the northern half, had not defended the suit, as against him at least, the appellant's claim should have been allowed.

4. It is contended for the respondents that in the judgment appealed against no serious objection to the procedure in the trial Court appears to have been taken that the appellant consented to certain previous depositions being put in and that therefore the findings of the lower Courts should be accepted; and although as regards misrepresentation as to the amount of the mortgage, issues Nos. 8 to 11 were raised by the trial Court at a late stage, ample opportunity was given to both sides to adduce evidence, and the appellant was therefore in no way prejudiced. In view of our conclusion on the other points, it is not necessary to express a definite opinion on the first contention of the appellant. But, speaking for myself, it appears to me to be too wide a proposition that a defence is barred because a suit might be barred, or that a judgment-debtor, who has allowed the sale to be confirmed, cannot subsequently set up a defence of fraud, as in the present case.

5. In this appeal it is necessary to enter into gone detail as to the actual trial and of the pleadings. In his written statement, Exhibit 15, respondent No. 3 set up (para 3), firstly, collusion between the appellant and respondents Nos. 1 and 2, secondly, (para 6), absence of notice of the execution proceedings, and thirdly, agreement between the decree holder Rangrao and the appellant to purchase the property for a small amount. Apart from this, no particular fraud was alleged. Order VI, Rule 4, is clear that the appellant was entitled to particulars of the misrepresentation and fraud set up to resist the title ordinarily vesting in him under Section 65, Civil Procedure Code-a principle emphasised by Lord Selborne L. C, in Wallingford v. Mutual Society (1880) 5 App. Cas. 685 .

6. These particulars of fraud were only added in the respondents' evidence, Exhibit 37. What the precise collusion consisted of had not been even set up and, therefore, he refers presumably to the collusion set up by respondent No. 3, in the previous suit No. 46 of 1012, that was decided against respondent No. 3 in the judgment Exhibit 58.

7. Apart from its vagueness the case of collusion as between the appellant and respondent No. 8 may briefly be dismissed as having been res judicuta in the litigation between the two parties concerned, when it was raised by respondent No. 3 as plaintiff; and even if proved, it would hardly suflice for the sale to be set aside by the parties concerned six years after the event. Similarly no particulars were given in the pleadings of the alleged collusion between the appellant and respondents Nos. 1 and 2. In the written statement the only substantial ground alleged is the absence of notice. It would have been preferable perhaps if the second issue in the trial Court had been denned and confined to this allegation of fraud instead of its being generally framed as was the case namely, ' Is this Court sale fraudulent and illegal as alleged by defendant No. 4 V ' However that may be, the trial proceeded on issues Nos. 1 to 7 as originally framed. Thereafter the learned Subordinate Judge in his anxiety to do justice between the parties felt that a perusal of the record of the execution proceedings was necessary and adjourned the case in order to enable him to send for the record and to deliver judgment. He sent for the record and went through it, evidently with very great care, It appeared to him that other suspicious circumstances, not brought to his notice, in the pleadings existed; and thereupon suo motu he framed issues Nos. 8 to 11 and adjourned the suit to enable both sides to otter evidence if they chose The oral evidence actually preferred consisted of Rangrao and his clerk Hanmant. They were merely called pro forma and their former evidence in suit No. 46 of 1912, instituted by defendant No. 3, was put in by consent. The learned Subordinate Judge then came to the conclusion (1) that the alleged notice served upon respondent No. 4 was never served; (2) that the appellant in conspiracy with Eangrao and his clerk Hanmaut fraudulently represented to the Court that it was duly served; and (3) that at the time of the sale the appellant had deliberately misrepresented to the executing Court that the mortgage was for Rs. 2,500 instead of a smaller amount.

8. Conceding the wide powers under Order XIV with regard to the framing of issues, there can be no question, I think, on the record that this issue of misrepresentation of the mortgage amount was an issue completely outside the pleadings and wag raised by the learned Subordinate Judge himself on a perusal of the record of the execution proceedings, which he himself had sent for and which neither party had putin The materials,. on which the Court may frame issues, are clearly laid down in Order XIV, Rule 3; and these issues were outside the rule. In his very anxiety to do justice, the learned Subordinate Judge followed the course reprobated by this Court in Naro Hari v. Anpurnabai I.L.R.(1874) 11 Bom. 160 and took the case altogether out of the hands of the litigants and made for the respondent a case which he had no intention of making out for himself. Moreover, the findings on these issues are based on inferences or rather on surmises founded on certain circumstances in (he execution records before the learned Subordinate Judge, particularly the endorsement as to the mortgage amount of Rs. 2.500 on the sale proceeding, Exhibit 54. This endorsement, however, was signed not by the appellant, but by one Hanmant Balaji who was one of the bidders. In the vernacular record there is no admission of the appellant that he had made any such representation to the Court. In the English record this admission is immediately followed by a retractation. Under the Code of Civil Procedure the vernacular record is more authoritative. Moreover, it is no part of the duty of a bidder to inform the Court of the existence of the amount of incumbrance; and it appears to us therefore that this issue should never have been raised and that in any case the inference against the appellant as based on the irregular procedure cannot be supported.

9. It remains to consider the only substantial ground, namely, the absence of notice to respondent No. 4. Here again, on the evidence produced, both the Courts have arrived at an adverse conclusion against the appellant similar to that stated above' The bailiff Balkrishna, who has made the affidavit of proper service on the summons, Exhibit 47, has not been called. Hanmant Venkaji, the karkunof Kangrao. who accompanied the bailiff to identify respondents Nos. 3 and 4, was called but not a single question has been put to him in regard to the service or the alleged conspiracy of which he alone would be the direct agent along with the bailiff. The record of his evidence put in is silent on the matter of service, and the further evidence is entirely directed to quite a different point than the point now in issue. The same observations apply with reference to Rang-rao and the appellant. The learned Subordinate Judge has arrived at his conclusion mainly on the basis of the application, Exhibit 52, by Rangrao for time to present Hanmant before 'the Court. This ground is clearly insufficient as a pleader's ,karkun need not necessarily always be present in Court. In any case these are all questions which ought to have been put. to Rangrao and Hanmant. Yet without a single question to either, both the Courts have in fact held proved a conspiracy on the pert of Rangrao, hiskarkun and the bailiff and the appellant in addition, to make a false representation of service, which was never effected. The trial Court has again followed a course reprobated by their lordships of the Privy Council in Bal Qangadkar Tilak v. Shrinivas Pandit I.L.R(1915) . 39 Bom. 441 . Hanmant, it should be observed, stated that respondent No. 4 was present at the sale. We are of opinion that respondent No. 4 has failed to prove absence of service, much less the fraud and conspiracy set up, and that the procedure and the inference of the lower Courts on this point cannot be supported.

10. It is not necessary to consider the question of collusion as between respondent No. 8 and respondent No. 4, with regard to their dealing with the property in the sale deed, Exhibit 38, of 1903, and the sale deed and resale of half in 1907, except to observe that this course of dealings between the two respondents Nos. 3 and 4 inter se is not easily reconcileable, with the present contention of respondent No. 4 that he was on hostile terms with respondent No. 3 and had no information of the execution or the sale.

11. As regards the value or the small price paid by the appellant, there is one element which does not find place in the judgments appealed against. Till 1918 the auction purchaser could not obtain possession of the property by reason of the right to possession for another twelve years of the mortgagees, respondents Nos. 1 and 2. This period and the interest on the purchase amount accumulating would, to a certain extent, reduce the amount paid, and might together with the comparatively smaller value twelve years ago of the land purchased, explain to some extent at all events, the price obtained in execution without the necessity of fraud or conspiracy of the kind alleged, I would, therefore, allow the appeal.

Fawcett, J.

12. I agree with my learned brother's view, over-ruling the first contention of the appellant's counsel, and holding that the defence as to the sale being a nullity is not necessarily barred because defendant No. 4 did not sue to set the sale aside within the time allowed by law or take the other remedies available to him in execution under the Code of Civil Procedure. The decisions of this Court in Shunkar Daji v. Dattatraya Vinayak I.L.R. (1921) 45 Bom. 1186 :23 Bom. L.R. 514 and Mahadev v. Sadashiv (1920) 22 Bom L.R. 1083 show that such a defence can be set up, even though it rests on a claim, which could not be set up by the same person as a plaintiff. It is unnecessary to consider this point further, because I agree that the appeal should be allowed on other grounds.

13. Assuming that the defence that the sale by which the plaintiffs obtained his title to the land is vitiated by fraud or illegality can be set up, it is necessary to see what exactly is the fraud or illegality that is pleaded by defendant No 4, So far as illegality is concerned, although in paragraph 8 of the written statement defendant No. 4 says that there were many legal defects in the sale by which it was rendered null and void, the only actual illegality specified is that notice had not been duly served upon him in the prior execution proceedings. Under the ordinary rule that fraud or illegality must be specifically pleaded and particulars given, that is the only illegality that was really raised by his pleadings.

14. In regard to fraud the allegation in paragraph 7 is very vogue and merely says that the plaintiff managed to get the property for a small amount, without the knowledge of defendant No. 4 and with fraudulent intent. That plea in itself would not really raise a case of fraud as it should be pleaded But we can take into consideration the fact that the plea of fraud was developed during the trial and is taken by the Subordinate Judge in considering issue No. 2 to be the allegation that the plaintiff deceived defendant No. 3 by persuading him to believe that he (the plaintiff) would purchase the property for a small sum with a view to resell it to defendant No 3, whenever he returned the amount with interest.

15. There is also an allegation of collusion between the plaintiff and defendant No 3 for defrauding defendant No. 4 of his half share in the land. The latter part of this allegation has not been found proved, as I read the Subordinate Judge's judgment, but he did find that the plaintiff induced defendant No. 3 to consent to the final bid that he made at the auction, representing to him that he would reconvey the land to defendant No. 3 as soon as the amount was paid, and that since the A plaintiff never intended to keep his promise and other bidders were prevented from raising the price as a result of this misrepresentation, the Court sale was fraudulent and illegal. The Assistant Judge in appeal has held that the depositions of Rangrao and Hanmant in the previous Suit No. 46 of 1912 show that the bidding at the sale was low, because there was an understanding that the plaintiff should purchase the land at a low price and then reconvey it to defendant No. 3. But this is not made the basis of his final order and it appears to me to be incidentally referred to. His final conclusion is one confirming the finding of the lower Court that the confirmation of sale was due to fraud practised on the Court and that the plaintiff was a party to this fraud. However, even assuming that such collusion is a finding of fact on which the lower Courts' decrees are partially based, it is in my opinion quite clear that those findings are not supported by admissible evidence and have been arrived at in a manner that is clearly opposed to the provisions of the law as to res judicata, and as to the method of obtaining a reversal of a conclusion arrived at in a trial. This particular collusion or understanding was the subject-matter of the Suit No. 46 of 1912 between defendant No. 3 and the plaintiff, and the finding that that understanding was not proved is clearly res judicata as between the plaintiff and defendant No. 3, who were the principal persons concerned in the alleged arrangement. The Subordinate Judge, therefore, so far as defendant No. 3'e portion of the land is concerned, clearly had no jurisdiction to arrive at a contrary finding to that which had been come to in the previous suit. No doubt it was open to defendant No. 4, who was not a party to that litigation, and was a prior assignee as to his half of the land, to set up this alleged agreement or collusion and prove it. But such proof must obviously be based on something more than mere consideration of the testimony of some of the witnesses in the previous litigation. The Subordinate Judge, in his exercise of such jurisdiction, was virtually acting as if he was a Court of appeal from the Subordinate Judge who tried the prior suit, and he was deciding that appeal not on all the materials of that suit but on two piarticular depositions which were given in that suit and which bad been put in in this litigation, without any further cross-examination of the two witnesses in regard to the matter. He was not in such a good position as the Subordinate Judge, who tried the suit of 1912 and who had the witnesses before him, to decide the question; and he had, in my opinion, no power to decide that the collusion and agreement set up were proved' merely on the scanty materials that satisfied him and the Assistant Judge, There has, in my opinion, been an error in regard to the fundamental rules on which an issue can be decided in a suit, and the findings, so far as they affect defendant No. 3, offend against the law of res judicata,

16. It is also further open to question whether in any case the agreement or collusion set up would amount to fraud. For it has been held by their lordships of the Privy Council in Mahomed Mira Ravuthar v. Savvasi Vijaya Raghunadha Gopalar I.L.R.(1899)Mad. 227 that 'the charge against a bidder that he and those who have acted in concert with him have acted in such a manner as to prevent the best price being obtained does not of itself amount to a charge of fraud, nor will proof of such concert invalidate the sale to him.' It seems to me that this ruling would apply to the present allegation, but it is unnecessary to go into this because, on the grounds I have already given, the findings of the two lower Courts can clearly not be accepted and should be interfered with in second appeal.

17. Then as regards the fraud that has been actually found by the Subordinate Judge on the additional issues, raised in Exhibit 63 and confirmed by the Assistant Judge in appeal, I entirely agree with my learned brother that in raising those issues the Subordinate Judge was acting without jurisdiction and against the fundamental principles as to how a suit should be tried and determined, which have been laid down by the Privy Council in the leading case of Goree Monea Dossee v. Jitggut Indvo Narain (1866) 11 M.I.A. 1 . I give all credit to the Subordinate Judge for being actuated by a desire to do justice in the case, and I also do not in any way desire to limit the power that a Court has under Order XIV, Rule 5, Civil Procedure Code, to frame additional issues. But the additional issues authorised by this rule are such as may be necessary for determining the matters in controversy between the parties, and that I think is a clear indication that it was not the intention of the legislature that the Judge should travel outside the actual averments and counter-averments of the parties My learned brother has already referred to the remarks on this point in Naro Hari v. Anpurnabai I.L.R.(1874) 11 Bom. 164 n and I may further draw attention to the observation in that judgment that what is to be considered is the case made by a party and not the case as 'moulded by the astuteness of the Judge.' I think that is very applicable to the present case. The Subordinate Judge on a perusal of the record has made out a case for defendant No. 4, which he never set up and never intended to set up, because apparently it was not within his knowledge that the representation had been made which is mentioned by the Subordinate Judge who confirmed the sale. And this applies all the more to a case like the present, where the additional issues are framed after the whole trial has been finished and the case is reserved merely for judgment. The mere fact that the parties were given an opportunity of adducing additional evidence in regard to the further issuer does not suffice to validate a procedure opposed to the law laid down by the Code of Civil Procedure and the Privy Council in the matter. No doubt there are exceptions when a Court is justified in holding a thing invalid on a ground which has not been pleaded. An instance of such an exception is afforded by Surajmal v. Triton Insurance Company Ltd. (1924) 27 Bom. L.R. 770. where the Privy Council says :-

No Court can enforce us valid, that which competent enactments have declared shall not be valid, nor is obedience to such an enactment a thing from which a Court can be dispensed by the consent of the parties, or by a failure to plead or to argue the point at the outset (L, R. 2 Ex. 338). The enactment is prohibitory. It is not confined to affording a patty a protection, of which he may avail himself or not as he pleases. It is not framed solely for the protection of the revenue and to be enforced Solely at the instance of the revenue officials, nor is the prohibition limited be cases, for which a penalty is exigible.

18. Clearly this is not a case which comes under the above category. The Privy Council have frequently drawn our attention to the undesirability of upsetting titles which appear to be valid on the face of them in execution proceedings of civil Courts, and the law provides a limited period and a limited method for obtaining a cancellation of a Court sale, so as to upset the title based upon it. In any case I agree with my learned brother that the finding about this misrepresentation is based on surmises which do not afford a proper ground for holding it proved that the plaintiff was a party to this alleged fraud. There has been a further disregard of the ordinary requirement that a person who is charged with fraud should, when he is examined in Court, be cross-examined in regard to it and his explanation taken into consideration. But, apart from that, it seems to me that the lower Courts were clearly not justified in considering this particular question of fraud, which had not been raised in the pleadings or evidence of defendant No. 4 and which is not a case of fraud prohibited by statute in the public interest.

19. Then, as regards the finding that the wale was illegal because no notice had been served upon defendant No. 4, it seems to me that this is not a case like that of Khiarajmal v. Daim I.L.R.(1883) 32 Cal. 296 : 23 Bom. L.R. 514 or that of Shankar Daji v. Dattatvaya Vinayak I.L.R. (1921) 45 Bom. 1186 . In cases of that kind there is no proper representation of the party or they have not been parties to the proceedings in which the sale takes place. And even if there had been an objection that a person was not a proper legal representative, the Court had never applied its mind to the matter. But in this case a notice was ordered to issue to defendant No 4 and the bailiff made a return that it had been duly served by fixing it upon the house, where defendant No. 4 was living at the time. The Court naturally accepted this report, which was supported by the affidavit of the bailiff. Even assuming that it is true that as a matter of fact defendant No. 4 was not in that house and that the notice was not properly served, still this is no sufficient ground for now saying that the sale by which the plaintiff obtained his title, was a nullity on that account. I think there can be no clearer authority on this point than that provided by a very similar case in Paresh Nath Mallick v. Hari Charan Dey I.L.R. (1923) Cal. 622 . There it waa alleged that the decree was a nullity because the summons had not been served upon the party contesting the validity of the sale, which arose out of a decree. In subsequent proceeding it was actually held that the summons had not been served and the ex parte, decree was set aside. But the question still remained whether the sale was a nullity on that account, and Sir Lawrence Jenkins, in his judgment, at page 627, says:-

Therefore, those conditions were established which entitled the aggrieved defendant to have the decree set aside under Section 108. But though the decree was thus set aside in September, 1006, the Court could not have passed its decree in 1903 without holding that the summons had been duly served that is the condition laid down by Section 100 of the Civil Procedure Code of 1882. So we have this position, that the Court wrongly, as events have subsequently shown, found that though the defendant was not present the summons had been duly served. The purchaser was entitled to rely on that finding. lie had not the opportunity or the means of questioning the propriety of the decision at which the Court had arrived when it determined that the conditions were established entitling it to pass an ex parts decree; and the Court should have much hesitation in visiting a purchaser at one of its sales with the consequences of an irregularity or defect of procedure which was not discovered by the Court, or its officers, and was not apparent on the face of the record.

20. Those remarks apply appositely to the present case, where the Court could not proceed to order a sale unless it found that notice had been duly served on defendant No. 4, I am quite aware that in this case it is alleged that the plaintiff himself procured an improper service, but that aspect of the case is not supported by any actual evidence and is based on pure surmises from a perusal of the record in the execution proceedings, so it is not a finding which can, in my opinion, be held to have been arrived at on proper materials.

21. Accordingly, in my opinion, the case is not one like those considered in Khiarajmal v. Daim I.L.R. (1904) Cal. 296 : 6 Bom. L.R. 1 and Malkarajun v. Narihari I.L.R.(1900) 25 Bom. 337 : 2 Bom. L.R. 927 . I think, therefore, that the decrees of the lower Courts are vitiated by substantial errors in the procedure provided by the Code or any other law for the time being in force, which has led to error in the decision of the case upon the merits. I am very reluctant to interfere in cases where two Courts have held that fraud has been established. But in determining whether there has or has not been any fraud, the lower Courts have gone outside the proper foundation for determination of such a question, and there has been substantial error, which, I think, necessitates our interference. I agree, therefore, in allowing the appeal.

22. We accordingly reverse the decrees of the two lower Courts dismissing the plaintiff's suit and his first appeal with costs and substitute a decree in favour of the plaintiff for possession of the land in suit as prayed and directing an inquiry as to mesne profits from the institution of the suit until delivery of possession to the plaintiff or the expiration of three years from the date of this decree, whichever event first occurs. The Subordinate Judge should, after ascertaining the amount of such mesne profits, pass a final decree in accordance with Order XX, Rule 12, Civil Procedure Code, as to the amount of such profits.

23. The plaintiff-appellant must get his costs throughout from defendants Nos. 3 and 4, each being jointly liable for the costs of the appeal to this Court.

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