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Banke Lal and ors. Vs. Jagat NaraIn and Damodar Das and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad High Court
Decided On
Judge
Reported in(1900)ILR22All168
AppellantBanke Lal and ors.
RespondentJagat NaraIn and Damodar Das and anr.
Excerpt:
execution of decree - sale in execution--sale set aside--second sale in execution of a different decree--first sale subsequently confirmed in suit for that purpose--title of purchasers at first sale--civil procedure code, sections 311, 312. - cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m. savant, jj] jurisdiction of school tribunal constituted under maharashtra employees of private schools (conditions of service) regulations act, (3 of 1978) held, school run by the cantonment board is a primary school and it is not a school recognised by any such board comparable to the divisional board or the state board. the school tribunal constituted under section 8 of.....arthur strachey, c.j.1. these two first appeals are connected appeals in connected suits, the same persons being plaintiffs and appellants in both. they are also connected with second appeals nos. 405 and 633 of 1897, in which the same persons are plaintiffs, each case raises the question of the rights of the plaintiffs under a purchase at an execution sale of certain zamindari property as against other purchasers who claim to have respectively bought at other sales certain portions of that property. it will be convenient to consider separately the two first appeals, as to which one judgment will suffice, as it did in the court below.2. the litigation arises out of the failure of the firm of lachmi narain of bareilly. several suits were brought against the firm by creditors, who obtained.....
Judgment:

Arthur Strachey, C.J.

1. These two first appeals are connected appeals in connected suits, the same persons being plaintiffs and appellants in both. They are also connected with second appeals Nos. 405 and 633 of 1897, in which the same persons are plaintiffs, Each case raises the question of the rights of the plaintiffs under a purchase at an execution sale of certain zamindari property as against other purchasers who claim to have respectively bought at other sales certain portions of that property. It will be convenient to consider separately the two first appeals, as to which one judgment will suffice, as it did in the Court below.

2. The litigation arises out of the failure of the firm of Lachmi Narain of Bareilly. Several suits were brought against the firm by creditors, who obtained decrees. One of the decree-holders was one Kalka Prasad. He put in execution his decree against Ram Sarup and Piare Lal, the representatives of the debtor Lachmi Narain, and on the 20th November 1885, there were sold in execution of the decree the rights and interests of the judgment-debtors in a village called Said pur, or Saidpur Hawkins, and those rights and interests were purchased by the plaintiffs. One of the questions raised by the appeals is as to the exact extent of the interest acquired by the plaintiffs by that purchase, and whether it included the portions claimed by the defendants. At all events, it included the twenty biswas share of the judgment-debtors in mauza Saidpur. Objections were raised to the sale by the judgment-debtors on the ground of irregularity in publishing or conducting it under Section 311 of the Code of Civil Procedure, The Court executing the decree allowed the objections and set aside the sale on the ground that the notification of sale was so vague in its description of the property to be sold as to be misleading to intending purchasers. That order was passed on the 5th May 1886. Under the Code as it then stood no appeal lay from the order of the executing Court, but under the decisions of this and other High Courts a regular suit lay at the instance of the auction purchasers to set aside the order and to have the sale confirmed. Before, however, anything was done to question that order, certain portions of the village Saidpur were, on the 20th September 1886, sold in execution of other decrees passed against the same judgment-debtors. One of these was a decree of Kunwar Harcharan Lal. In execution of that decree two pieces of property were sold. One portion, described as 'Hawkins Kothi, with inclosure and land,' was purchased by Damodar Das, the respondent in F.A. No. 116. Another, described as 'Begam Bagh, with masonry inclosure and kothi therein, and land,' with other details not necessary to state, was purchased by Jagat Narain, the respondent in P.A. No. 115. On the 4th December 1886, both sales were confirmed under Section 312 of the Code, and in February 1887, the purchasers obtained possession. It is under these sales that the defendants-respondents resist the claim of the plaintiffs-appellants to possession of these plots by virtue of the sale of the 20th November 1885. That sale, it will be remembered, bad been set aside on the 5th May 1886. On the 20th September 1886, that is, on the very day of the purchases by the defendants, the plaintiffs brought a suit to set aside the order of the 5th May 1886, and for confirmation of their sale of the 20th November 1885. It has not been contended that by reason of that suit the defendants' purchases are effected by the doctrine of lis pendens. That contention could not have been successfully raised; first, because there is no evidence to show that at the time of the sale of the 20th September 1886, the suit instituted on that date had already been filed; and, secondly, because, even assuming the institution of the suit to have come first, it clearly had not become 'contentious' within the construction placed by this Court and other High Courts upon Section 52 of the Transfer of Property Act, 1882, at the time of the sale on the same day. The only persons whom the plaintiffs made parties defendants to that suit were the judgment-debtors whose property had been sold. They never made the present defendants parties to that suit, although the Court pointed out the advisability of their so doing if they claimed those portions of the property which the defendants had purchased on the 20th September 1886. The defendants to that suit, the judgment-debtors, filed written statements confessing judgment. Nevertheless on the 7th March 1887, the Court of First Instance dismissed the suit on the ground that the plaintiffs persistently refused to specifically answer the Court's inquiry as to the particulars of the property which they claimed to have purchased on the 20th November 1885, and more especially whether they claimed that that sale included the kothis and gardens subsequently purchased by the defendants. From that decision the plaintiffs appealed to the High Court, which, on the 14th May 1888, reversed the first Court's decree and allowed the claim. The judgment and decree of the High Court in the first place awarded the plaintiffs 'possession of the property in suit, to wit, mauza Saidpur together with the groves.' Secondly, it 'declared that the auction-sale in favour of the appellants dated the 20th November 1885, was a good auction-sale, and that the property as aforesaid sold thereat was purchased by them.' In September 1888, the plaintiffs obtained formal possession of mauza Saidpur in execution of the High Court's decree. They were resisted in obtaining possession of the plots which the defendants had purchased; and hence these suits, the first against Jagat Narain for possession of Begam Bagh (F.A. No. 115), the second against Damodar for possession of Hawkins Kothi (F.A. No. 116).

3. The case of the plaintiffs is that these properties passed to them under their prior purchase of the 20th November 1885, which they say was confirmed by the High Court with the effect that the confirmation related back to the date of the sale, and therefore their purchase of the 20th November 1885, must be given priority over the defendants' purchase of September 1886. The case of the defendants is, first, that Hawkins Kothi and Begam Bagh were not in fact included in the execution sale to the plaintiffs of November 1885, and, secondly, that that sale was never validly confirmed as regards them, and is not entitled to priority over the sale under which they purchased.

4. The Court of First Instance decided in favour of the defendants and dismissed the suits.

5. The first question to be considered in these appeals is whether the execution sale of the 20th November 1885, in fact included Hawkins Kothi and Begam Bagh. The sale notification describes the property as 'mauza Saidpur Hawkins.' It describes the judgment-debtors' interest as '20 biswas with gardens belonging to Ram Sarup and Piare Lal.' Hawkins Kothi is a piece of land surrounded by a wall, and including a kothi or house, certain out-houses, and certain lands cultivated by tenants. Begam Bagh is another inclosure consisting mainly of a garden, but also apparently including a kothi. There is no doubt that both Hawkins Kothi and Begam Bagh are included within the area of the village Saidpur. Everything which can be described as gardens is expressly included in the sale notification, I think there can be no doubt that, apart from buildings, all land and especially all land cultivated by tenants, included within the area of the zamindari would primd facie pass by a conveyance or execution sale of the zamindari. The only question I think is as to the kothis and the out-houses attached to them. As to these I have no doubt whether that it was fully intended that they should he sold with the rest of Saidpur. They are specifically mentioned in the application for execution and in the warrant of attachment. I do not agree with the view of the Subordinate Judge that the kothis were not actually attached. He bases that view on the amin's report in which the amin stated that he had attached 'the zamindari property.' But the report itself expressly refers to a list appended to it, which specifically includes in the attaohed property the kothis and gardens, and I think that shows clearly that those properties were in fact attached, and that in the report the amin used the expression 'zamindari property' merely as a compendious description of everything detailed in the appended list. The executing Court when it set aside the sale at the same time stated its opinion to be that the kothis and gardens were included in the property sold, though it held that that did not appear with sufficient clearnesa from the description of the property, and that the absence of specific details was misleading. Now in the entire absence of evidence to the contrary, I think that a kothi or other building situate within the zamindari area is included in and passes with the zamindari. No doubt the contrary may be shown by evidence, that is to say, evidence of the circumstances connected with the acquisition, construction, or user of the buildings, from which it may properly be inferred that they are not appurtenances of the zamindari, but have been so severed or held so separately from it as to form a separate and distinct property of the zamindar. In the present case there is no such evidence. The village Saidpur was purchased by Lachmi Narain in 1861. There is in evidence an account book of the firm showing that at the same time there was purchased a kothi or kothis separately valued. It is impossible to say from this document whether the singular word 'kothi' or the plural 'kothis' is designated. Further, there is nothing to show, if the document referred to one kothi, which, if either, of the kothis concerned in this suit is referred to. There is no evidence showing for what purpose or in what manner either the kothi in Hawkins Kothi or the kothi in Begam Bagh was used at any time up to the sale of the 20th November 1885. Therefore in the absence of any evidence to the contrary I hold that the kothis and the out-houses as well as the gardens and cultivatory holdings, passed with the rest of the zamindari of mauza Saidpur by the sale of the 20th November 1885.

6. The next question relates to the validity of that sale, and as to this defendants raise two contentions. First, they say that at the date of their purchase of the 20th September 1886, the plaintiffs' purchase having been set aside, they, the defendants, took Hawkins Kothi and Begam Bagh absolutely and not subject to any rights then existing in the plaintiffs. Secondly, they contend that, so far as they are concerned, the sale of the 20th November 1885, must be deemed to be a sale which was never confirmed, inasmuch as the confirming decree of May 1888, was passed in a suit to which they were not parties, and by means of collusion between the plaintiffs and the judgment-debtors who were the sole defendants.

7. In reference to the first of these contentions the plaintiffs seek to establish an analogy between the decree of 1888 and an ordinary order confirming a sale under Section 312 of the Code. It has been held in several cases that an auction purchaser at an execution sale has prior to confirmation under Section 312, an inchoate or equitable title which becomes absolute on confirmation, that any subsequent purchaser, even if the subsequent purchase is first confirmed, takes subject to this inchoate title of the first purchaser, and that on confirmation the title to the property, as between different auction purchasers under different sales, relates back to the date of the sale. In support of this contention the plaintiffs rely on Dagdu v. Panchamsing Gangaram (1892) I.L. R., 17 Bom., 375; Konapa v. Janardan (1874) 11 Bom., H.C. Rep., 193, and a case reported in 2 Calcutta Weekly Notes, p. 589. When these cases are looked at there is one obvious matter in which they are distinguishable from the present. In all of them at the time of the second purchase the first had not been set aside but was in force All of them proceed on the principle that at the time of the second purchase there existed in the first purchaser under a subsisting sale an inchoate title, which only awaited confirmation of the sale to become a complete title. In each of these cases the second purchaser bought subject to that inchoate title which only awaited confirmation. In the present case at the time of the second sale to the defendants the sale to the plaintiffs had been set aside for many months. If that sale was set aside, and was not subsisting at the date of the defendants' purchase, how can it be said that at that date any inchoate title in the plaintiffs existed? The inchoate title depends on the sale, and can exist only as long as the sale is in force, If on the 20th September 1886, the sals had gone and the inchoate title of the plaintiffs under it had therefore gone, the defendants did not purchase subject to it. Can it be said that the inchoate title still existed, although the sale giving rise to it had been set aside, merely because there was a possibility of a suit being brought by the auction purchasers for reversal of the order setting aside the sale and for confirmation of the sale itself? I am disposed to agree that the confirmation constituted by the decree would relate back to the date of the sale and make the sale valid ab initio quoad the judgment-debtors. But can it do so in such a manner as to defeat intermediate purchasers who have purchased bond fide at a time when the sale was set aside, and under valid decrees, and in valid auction sales of their own? No case, it is admitted, has carriod the doctrine of inchoate title so far as this. The plaintiffs rely on the analogy of the case of Ram Chunder Sadhu Khan v. Samir Gazi (1892) I.L.R. 20 Cal. 25, and in particular on the passage at p. 28, where it is said:--'The effect of the subsequent dismissal of the suit to set aside the sale was the same as if it had been dismissed in the first instance, and as if the first sale had never been set aside.' The learned Judges give no reasons for that opinion; but I think it sufficient to say of that case that the circumstances of it were in several particulars different from the present, and that it was decided under the provisions of the Bengal Rent Act VIII of 1869. If we are to go by analogy, I think a more instructive analogy is to be found in the judgment of their Lordships of the Privy Council in the case of Nawab Zain-ul-abdin Khan v. Muhammad Asghar Ali Khan (1887) L.R. 15 I.A. 12, where it was laid down that the title of a bond fide purchaser in execution of a decree which at that time was valid and in force is not affected by the circumstance that the decree is afterwards set aside on appeal as erroneous. I have not arrived at this conclusion without some doubt, because unquestionably there are difficulties in any view of the conflicting rights of these two auction purchasers. It is possible, for instance, that questions of some difficulty might arise if the competition were between an auction purchaser buying after the previous sale had been set aside, and the prior auction purchaser, who, after the second sale, obtained on appeal a reversal of the order setting his sale aside. As to which of the two auction purchasers would in that case be entitled to priority, I need express no opinion, though I acknowledge that in favour of the prior auction purchaser it might plausibly be contended that to deny him priority would have the effect of rendering nugatory the right of appeal now given to him by Section 588(16) of the Code. That difficulty I prefer to deal with when it arises. On the other side, however, I think there are still greater difficulties, and in particular the difficulty and objection resulting from the long period of uncertainty and suspense in which it would be impossible practically to say whether property might safely be sold in execution of a decree. The previous sale having been set aside, a suit for confirmation of the sale and for reversal of the order setting aside the sale might be brought at any time up to a year from the date of the order: the suit might conceivably be a protracted one and go through the whole course of appeal possible in India, and ultimately to the Privy Council; and the question would arise whether the titles of auction purchasers and transferees from those purchasers, and even further transferees again in the period between the setting aside of the order and the in stitution of the suit should for the whole of that protracted period be subject to every sort of uncertainty. But the greatest difficulty to my mind is in holding that there remains an inchoate title when the sale has been set aside and when all that remains to the plaintiff is the possibility of bringing a suit to have the reversal of the sale itself set aside. These defendants were bond fide purchasers of these plots at a time when I cannot hold that the plaintiffs had any title to them whatever, and for that reason I think that the defendants' purchase is entitled to priority and that the suit must fail.

8. That would be sufficient to dispose of these suits, but that I understand that my brother Bankrji has some doubts on the matters which I have so far discussed; and I do not pretend to be entirely free from doubt myself. Therefore it is necessary now to consider the second ground on which the defendants contend that even if Hawkins Kothi and Begam Bagh were included in the sale of November 1885, the plaintiffs have not validly acquired these properties. That second ground is that by reason of the collusive nature of the proceedings terminating with the High Court's decree of May 1888, the sale of the 20th November 1885, must be deemed never to have been confirmed quoad these defendants and the order of the 5th May 1886 setting aside the sale remains standing quoad them. There can be no doubt that an auction purchase in execution of decree must be confirmed if it is to pass a complete title. It must be confirmed either by an order under Section 312 or by a decree in a regular suit brought for the purpose. The question is whether the High Court's decree of 1888 was prevented from having been a valid confirmation by reason of collusion as alleged. The conclusion at which I have arrived is that the proceedings in that suit were collusive proceedings between the plaintiffs and the then defendants. The High Court's decree was passed solely on the ground of the confession of judgment by the then defendants in the Court of First Instance. In dealing with the question of collusion it must of course be remembered that direct evidence on such a point can seldom be expected. One has to look at all the circumstances and consider what is the most probable and common sense inference to be drawn from the circumstances as a whole. Now what are the circumstances here? There was a sale to the plaintiffs in November 1885 of mauza Saidpur at which only 6,000 rupees were realized. We find the judgment-debtors objecting to that sale and getting it set aside in May 1886. From that moment the plaintiffs did absolutely nothing to impugn the order until the 20th September 1886, which by a curious coincidence happened to be the very day when, in execution of another decree, these properties were sold to and purchased by the defendants. On that day they made an unsuccessful attempt to get the sale postponed, and having failed they purchased secretly, in the name of one Kishen Lal, the village Saidpur, which, or the same day, was sold in execution of a decree of Lalta Prasad and Gobind Prasad. On the same day they also bring their suit for confirmation of the sale of the 20th November 1885, and against whom do they direct it? They carefully confine the suit to the judgment-debtors, who had no remaining interest whatever in the property: and I use the word 'carefully' advisedly, because the circumstance of the defendants' purchases was pressed upon the plaintiffs' attention by the Court, which insisted in vain on an answer to the question whether they claimed Hawkins Kothi and Begam Bagh, in which event the Court considered that the present defendants ought to be made parties to the suit. They refused to say whether they sought to affect the interests of these persons or not. These persons had a real interest in opposing the suit. The judgment-debtors, who had succeeded in obtaining the order of the 5th May 1886, filed written statements confessing judgment. Why did they do that, if they did not wish actively to assist the plaintiffs in getting the first sale restored with the minimum of opposition? If they had no defence to make to the suit, or thought they were not interested in opposing it, and if that is why they made no resistance it would have been sufficient for them to have simply let judgment go by default. One of the plaintiffs was examined as a witness in this case--the plaintiff Banke Lal. He was called by the defendants. He was cross-examined by his own counsel. There was an issue as to the collusive nature of the proceedings in the former suit. If there had been in fact no collusion in that former suit I think it would have been a natural course to have taken such a favourable opportunity of obtaining a specific denial by Banke Lal, that in the former suit there had been collusion in obtaining the confession of judgment. No such question was put, and the plaintiffs counsel confined himself to asking whether it was true that the former defendants had been induced to confess judgment by a bribe of Rs. 3,000. From all these circumstances the conclusion which I draw--of course, like most other conclusions of facts it is only based on a balance of probabilities--is that the parties to that former suit agreed together to set up by a suit which was really a sham suit intended not to be resisted but facilitated, the sale of the 20th November 1885, in order to defeat the present defendants, of whose purchases the plaintiffs and the judgment-debtors were of course fully aware. I agree with the Court below in not being satisfied with the evidence by which it was attempted to show an actual bribing of the then defendants. Apart; from that, however, and although the bribe has not been established, I think there is sufficient ground for coming to the conclusion that the confirmation of the plaintiffs' sale was obtained by collusion between the plaintiffs and the judgment-debtors. I would therefore dismiss both appeals and suits on the grounds, first that the defendants' purchases are, under the circumstances, entitled to priority over the plaintiffs' purchase; secondly, that, as regards the defendants, the confirmation of the plaintiffs' sale by a decree to which the defendants were not parties, and which was obtained by collusion between the plaintiffs and the judgment-debtors, cannot operate as a valid confirmation of the sale of the 20th November 1885. For these reasons I am of opinion that both these appeals should be dismissed with costs in both Courts.

Banerji, JJ.

9. I also am of opinion that the decrees of the Court below should be affirmed, although I am unable to agree with most of the reasons by which the judgment of that Court is supported. In the two suits out of which these appeals arise there are three questions to be considered; (1) whether the property now in suit was comprised in the auction sale of the 20th November 1885; (2) whether the defendants have priority over the plaintiffs by reason of their having purchased the said property after the sale of the 20th November 1885 had been set aside, and of the said sale having been confirmed by proceedings to which the defendants were not parties; (3) whether the decree of this Court of the 14th May 1888, affirming the said sale, was obtained by means of collusion and fraud.

10. Holding the view which I do on the third question, I do not deem it necessary to decide the other questions. Upon those questions I must confess my mind is not free from doubt. I prefer therefore to rest my judgment on the conclusion at which I have arrived with reference to the third question. If the decree of this Court, which is the real basis of the plaintiff's' title, was fraudulently and collusively obtained, the sale at which the plaintiff's purchased never became absolute, and even if it be assumed that the property in suit was included in that sale, the plaintiff's have acquired no priority over the defendants. I am clearly of opinion that there was collusion between the plaintiffs and their debtors in the previous suit. The decree passed in that suit was based on a confession of judgment filed by the debtors. In my opinion that confession of judgment was the result of a concert between the parties to that suit, the object of which was to defeat the intermediate purchasers, the defendants. The oral evidence adduced to prove the existence of a concert has been disbelieved by the Court below, and 1 must say that I see no sufficient reasons for disagreeing with that Court as to its estimate of that evidence, But fraud and collusion are from their very nature not ordinarily capable of being proved by direct evidence. A party imputing fraud to a transaction is no doubt bound to establish it, but he can do so, and is only able to do so in the great majority of cases, by means of circumstantial evidence only.

11. Now let us see what were the circumstances in this case. The sale of the 20th November 1885, was set aside on the objection of the judgment-debtors on the 5th May 1886. For several months after that date the plaintiff's took no steps to obtain the reversal of the order setting aside the sale. It was only when they had found that other creditors of the judgment-debtors had caused some of the property of the judgment debtors to be advertised for sale, and when the actual date fixed for the sale, namely, the 20th September 1886, had arrived, that they brought their suit to have the order of the 5th May 1886, set aside, and the sale of the 20th November 1885, confirmed. The very fact of their having made this delay in the institution of their suit raises doubts as to the bond fides of the suit, and these doubts are strengthened by the fact that a large portion of the property sold on the 20th November 1885, was subsequently purchased by these plaintiffs themselves on the 20th September 1886, benami in the name of one Kishen Lal. The evidence to which the Court below has referred leaves no room for doubt that the purchase by Kishen Lal was in reality a purchase by the plaintiffs. It appears that the plaintiffs made some attempt on the 20th September 1886, to avert a sale, but they failed in that attempt because the Court refused to grant their prayer for the postponement of the sale. After the sale had taken place and the defendants had purchased the property now in dispute, what did the plaintiffs do? Although the Court repeatedly called upon them to declare in distinct terms whether their suit embraced the property purchased by the defendants, namely, Hawkins Kothi and Begam Bagh, they gave no direct answer to the Court's inquiry, and although they were aware that their judgment-debtors had ceased to have any interest in that property, they preferred to continue their suit against their judgment-debtors alone, and did not accept the suggestion of the Court that the auction-purchasers should be added as parties. The next thing we find is that on the 20th November 1886, that is, two days before the date fixed for the hearing of the case, the defendants appeared in Court and filed a petition, confessing judgment. We know that the defendants to that suit, namely, the judgment-debtors, had strenuously contested the validity of the auction sale of the 20th November 1885, and had actually got that sale set aside on the ground of irregularity and inadequacy of price. We find that at the subsequent sale which took place on the 20th September 1886, the property sold yielded a price which was more than double of that realized at the first sale, and yet we find that the judgment-debtors, who evidently benefited by the second sale, which enabled them to discharge a large portion of their debts, appear in Court and do an act which would facilitate the passing of a decree in favour of the plaintiffs. What could be their motive in confessing judgment on the 20th November 1886? It is difficult to conceive that they had any other motive than that of enabling the plaintiffs to obtain a decree and thereby to defeat the interests of the defendants. As I have said, the judgment-debtors had a substantial interest in opposing the plaintiffs' suit and in obtaining an affirmance of the order setting aside the sale of the 20th November 1885; but when, in spite of that interest, they admitted the justness of the plaintiff's claim, it is difficult to draw any other inference than what I have stated above. As their property had passed into the hands of purchasers, it was not difficult to induce them to join the plaintiffs in colluding with them and perpetrating a fraud on the defendants, the second purchasers. Having regard to these considerations I think the Court below rightly held that the confession of judgment, which was the only foundation of the decree of this Court of the 14th May 1888, was filed collusively and fraudulently, and that that decree had not the effect of affirming as against the defendants the prior sale of the 20th November 1885. That being so, the plaintiffs have not acquired by virtue of that decree any priority as against the defendants, and the plaintiffs' suit has been rightly dismissed.


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