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Makhan Lal Vs. Sohan Lal and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1925All331; 87Ind.Cas.665
AppellantMakhan Lal
RespondentSohan Lal and ors.
Excerpt:
.....under section 9 by the employees working in schools which are established and administered by the cantonment board. [deolali cantonment board v usha devidas dongre, 1993 mah.lj 74; 1993 lab ic 1858 overruled]. - the first application was dated the 16th of september, 1916 and in this he complained that piare lal, one of the plaintiffs, had purchased the property for the decree-holders at an inadequate price and that the sale should be set aside. then he occupied a double capacity, namely of co-mortgagee as well as of subsequent mortgagee. in his application he clearly stated that piare lal had purchased the property for the decree-holders. in this particular case it cannot be suggested that any fraud was attempted to be perpetrated or was, in fact, perpetrated on makhan lal, who knew..........a final decree for a sum of rs. 10,000 and odd was passed on the 21st of february, 1913. in this decree makhan lal was shown among the defendants judgment-debtors although no doubt he was also a co-mortgagee. the decree-holders, namely, the mortgagees other than makhan lal, applied for permission to bid at auction sale and permission was granted to them. on the 23rd of august 1916 the entire mortgaged property was up at auction and purchased by the decree-holders (namely the mortgagees other than makhan lal) for a sum of rs. 5,800. as the personal remedy had become barred by time, it was impossible to realise the balance of the decretal amount.3. had the property fetched more than the decretal amount, makhan lal would have also received some money on account of his subsequent.....
Judgment:

1. This is a plaintiffs appeal arising out of a suit for recovery of possession of one-third share in certain properties. The Courts below have differed. The Court of first instance decreed the claim but the lower appellate Court has dismissed it so far as possession of the property is concerned but has awarded a decree for money instead.

2. In 1887 a mortgage was made by one Chhatta in favour of Makhan Lal and the defendants jointly for a sum of Rs. 2,700. About the last day of limitation a suit was instituted by the mortgagees other than Makhan Lal for sale on the strength of a certified copy, the original document being in possession of Makhan Lal who had himself neither instituted a suit nor joined with the others. Makhan Lal also held certain subsequent mortgages and he was, therefore, impleaded in a dual capacity as a mortgagee and a subsequent mortgagee. It is true that Makhan Lal made some attempts after the institution of the suit to have his name transferred from the array of the defendants to that of the plaintiffs but that application was rejected presumably on the ground that he being also a subsequent mortgagee could not be impleaded as a plaintiff. The suit was decreed on the 13th of April 1911, and a final decree for a sum of Rs. 10,000 and odd was passed on the 21st of February, 1913. In this decree Makhan Lal was shown among the defendants judgment-debtors although no doubt he was also a co-mortgagee. The decree-holders, namely, the mortgagees other than Makhan Lal, applied for permission to bid at auction sale and permission was granted to them. On the 23rd of August 1916 the entire mortgaged property was up at auction and purchased by the decree-holders (namely the mortgagees other than Makhan Lal) for a sum of Rs. 5,800. As the personal remedy had become barred by time, it was impossible to realise the balance of the decretal amount.

3. Had the property fetched more than the decretal amount, Makhan Lal would have also received some money on account of his subsequent mortgages. As the property was sold for less amount than was due on the prior mortgage, his subsequent mortgages became useless to him. He applied to the Court of the Collector who had sold the property as an ancestral one for setting aside the sale. The first application was dated the 16th of September, 1916 and in this he complained that Piare Lal, one of the plaintiffs, had purchased the property for the decree-holders at an inadequate price and that the sale should be set aside. Before the Collector, Makhan Lal at one time expressed his readiness to pay up the purchase-money and have the sale set aside. The casa was postponed but no arrangement could be made and, therefore, ultimately he asked the Collector to finally set aside the sale.

4. On the 15th of June the Collector set aside the sale but on an appeal to the Commissioner preferred by the plaintiff s-decree-holders the order of the Collector was set aside and the sale confirmed, it being held that the property had been sold for an adequate price. After this the decree-holders apparently certified payment of part of the decretal amount and obtained a Sale certificate in their own names. In that Makhan Lal's name is shown as one of the judgment debtors. It is a fact that they did not pay any cash towards the purchase money but the sale consideration was set off as part payment of the decretal amount.

5. Makhan Lal has since instituted the present suit claiming as a co-mortgagee that he is entitled to get one-third of the property purchased by his other co-mortgagees.

6. The learned Subordinate Judge came to the conclusion that the conduct of Makhan Lal in the proceedings to set aside the sale did not preclude him from falling back on his rights as a co-mortgagee. He was of opinion that inasmuch as the property had been acquired out of the decretal amount which was due jointly to all the mortgagees, Makhan Lal was entitled to get a share in the property.

7. On appeal the learned District Judge has taken a contrary view. He came to the conclusion that the decree-holders did not use more than their share of the mortgage money when they subsequently set off the purchase price of Rs. 5,800. He also thought that the property purchased must be deemed to have been purchased by the decree-holders themselves and that Makhan Lal has no interest in it. He, however, granted Makhan Lal a decree for the sum of money representing his share in the sale proceeds.

8. The case came up before a single Judge of this Court who has referred it to a Bench of two Judges.

9. It cannot be disputed that as a general proposition of law if only one of several decree-holders purchases the property at auction in lieu of the decretal amount, the purchase, in the absence of anything positive to the contrary, must be deemed to have been made on behalf of all the interested decree-holders. This was the view dearly expressed in the Pull Bench case of Kesri v. Ganga Sahai (1911) 33 All. 563. The decision in that cass was affirmed on appeal by their Lordships of the Privy Council in the case of Ganga Sahai v. Kesri A.I.R. 1915 P.C. 81. The learned Subordinate Judge, however, relied on the case of Ram Jas Das v. Mohan Lal (1914) 26 I.C. 735 where the opinion was expressed that even though a mortgagee is not actually a decree-holder but a pro forma defendant and even though the property is purchased ostensibly in the name of the decree-holders, the mortgagee-respondent may be entitled to a share in it if the purchase is made in lieu of the decretal amount. On the other hand, the learned Advocate for the respondents has invited our attention to another judgment of a single Judge of this Court in Second Appeal No. 911 of 1921, decided on the 1st of December, 1922, which was affirmed in an appeal under the Letters Patent (No. 47 of 1923) on the 3rd of May, 1923, which seems to uphold a contrary view. Even if it be conceded that ordinarily if the purchase is made by the decree-holders in lieu of the decretal amount and the payment is merely set off against the decree, then it may be deemed that the purchase is made on behalf of all the persons interested in the decretal amount whether plaintiffs or defendants, we have to see whether that inference can be properly drawn in view of the conduct of both the parties throughout the proceedings in this case. We have noted that Makhan Lal, to start with had refused to join in the suit and had not himself brought any suit within limitation on the basis of the original document which he retained in his possession. Then he occupied a double capacity, namely of co-mortgagee as well as of subsequent mortgagee. When the decree was passed, permission was granted to the decree-holders to bid. Makhan Lal apparently made no attempt to bid himself. After the sale had taken place, Makhan Lal applied to have the sale set aside. In his application he clearly stated that Piare Lal had purchased the property for the decree-holders. He never suggested that the purchase had also been made in his interest. Throughout those proceedings his attitude was that the sale should be set aside and the property re-sold so that he himself may bid and purchase it at a higher figure thereby either getting a large share in the sale proceeds or also getting some thing towards his subsequent mortgages. At one stage he was even prepared to pay down the money and have the sale set aside but that he ultimately did not do. When the sale was set aside by the Collector, the other mortgagees appealed to the Commissioner and in spite of Makhan Lal's opposition the appeal was decreed. Later on the other decree-holders applied for the sale certificate and the sale certificate was granted to them only. Having regard to the attitude of both the parties, it is impossible to draw the inference that when the purchase was made it was made on behalf of Makhan Lal also. Their Lordships of the Privy Council in the case of Ganga Sahai v. Kesri A.I.R. 1915 P.C. 81 remarked that the Courts in India cannot refuse to allow one decree-holder to perpetrate a fraud against his co-decree-holders under cover of any of the provisions of the Civil Procedure Code. In this particular case it cannot be suggested that any fraud was attempted to be perpetrated or was, in fact, perpetrated on Makhan Lal, who knew full well what was happening. It is true that the property was purchased in lieu of the decretal amount. It is also true that the decree-holders did not pay down the money in cash nor deposit the share of Makhan Lal in Court but, in our opinion, these circumstances by themselves would not justify us in presuming that the sale was made for Makhan Lal also when the conduct of both the parties was such as to preclude any such presumption.

10. In this view of the matter we are of opinion that it is no longer possible to hold that Makhan Lal has actually an interest in the property which was purchased.

11. We accordingly uphold the decree of the lower appellate Court and dismiss the appeal with costs.


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