P.K. Tare, J.
1. This is a second appeal filed by the plaintiff, whose suit was dismissed by both the courts below. This judgment shall also govern the decision of the second appeal No. 222 of 1954 (Mst. Betibai and Ors. v.Sailana Puri and Anr.). The plaintiffs in both the cases were co-sharers, while the first respondent Sailanipuri in both the cases was the lambardar of the patti, in which the plaintiffs held the share. The land revenue payable by the plaintiff Chhadamilal was Rs. 211/4/-.
The plaintiff's suit was for setting aside the sale on the ground, that the revenue sale had been brought about by the first respondent fraudulently, in collusion with the second respondent Kalloopuri, who is his nephew. Regarding the fraud, the pleas raised were to the effect that although the plaintiffs had paid Rs. 211/4/- as the land revenue due from him to the lambardar Sailanipuri, as also an additional amount of Rs. 158-6-0 in advance, as the lambardar was in need of money, the latter allowed the patti to be auctioned in a revenue sale and, in collusion with his nephew Kalloopuri, got it purchased in the said auction.
2. The defence was a denial of the receipt of the said amount of Rs. 369-10-0 in spite of the receipt executed by Sailanipuri on 16-12-1948, Ex. P. 1. The other allegations were formally denied and the additional pleas raised in the suit were that the suit as framed was not tenable and that the court-fee paid was not proper. It was also averred that there was no conspiracy between the defendants.
3. The learned trial Judge was of the opinion, that although the story, as put forward by the first defendant and his witnesses, was a false and fabricated one, relating to the payment of Rs. 369-10-0, all the same the fraud was not proved. The learned appellate Judge negatived the allegations of fraud on the finding that no conspiracy between the first and the second defendant was proved.
4. The learned counsel for the appellant has raised only one question in the present appeal, namely, that, in view of the circumstances and the proved facts on record, the lower courts were bound to hold that the allegations of fraud were proved. The learned counsel urged that the finding of the lower courts on the point of fraud was vitiated, as they altogether ignored the circumstantial evidence.
The learned counsel, in support of his contention relied on the cases of Deo Nandan Prasad v. Jankisingh, ILR 44 Cal 573: (AIR 1916 PC 227) (A), Akshaykumar Nath v. Ahmed Ali, ILR 59 Cal 180: (AIR 1932 Cal 434) (B). Parkash Narain v. Birendra Bikramsingh, ILR 7 Luck 131: (AIR 1931 Oudh 333) (C) and Lala Laxminarayan v. Rukhma-bai, ILR (1950) Nag 834 (D). The learned counsel for the respondent referred me to the case of Deo-nandansingh v. Manbodhsingh, ILR 32 Cal 111 (E). On a close scrutiny of the reasons given by the two courts below, it is clear that the learned Judges failed to apply the test for deciding the question of fraud as laid down in the case of Lala Laxminarayan v- Rukhmabai (D), (cit. supra).
Ordinarily the finding of fact on the question of fraud would be concluded in a second appeal, but where the lower courts commit an error of the kind, as in the present case, by excluding from consideration the circumstantial evidence altogether, this court would be justified in interfering with the finding, which in my humble opinion, would not be binding on this Court.
In the present case, the circumstances relevant are that the plaintiff had paid the amount of the land revenue and some thing more as early as 16-12-1948. In spite of the fact that the lambardar received this amount of Rs. 369-10-0, he allowed the land revenue of the patti, amounting to Rs. 480-6-0, to fall in arrears, and the 8 anna village share was actually allowed to be sold on 13-1-1950. If the co-sharers pay their share of the land revenue to the lambardar, and sit silent under the belief, that no untoward happening in respect of the village share would take place, their inaction cannot be blamed.
The second important fact is that the auction purchaser is himself a co-sharer and the nephew of the lambardar. The bid list Ex. P. 3 shows that on 18-1-1950, only eight annas proprietary share was put to auction, but as no bidders were coming forward, the 16 annas share was auctioned on 19-1-1950; when only 2 persons gave bids in the said auction. Kalloopuri started with a bid of Rs. 1250, then one Murarilal gave a bid of Rs. 1273 andKaloopuri next gave a bid of Rs. 1300 which was accepted and the sale was knocked down in his favour.
The plaintiff as P. W. 1 deposed that he was not aware of the auction before it was held. As the plaintiff had advanced some extra amount to the lambardar, who was in need of money, it was unlikely that he would allow the village share to be sold for an amount of Rs. 480/60- i.e. just about Rs. 111 more than the money advanced by him to the lambardar. These circumstances in my opinion definitely lead to one conclusion alone, namely, that the lambardar allowed the land revenue to remain in arrears deliberately, with a view to get the property sold in auction and get it purchased through a relation of his.
This was just a device to get hold of the properly wrongfully. In the case of ILR 44 Cal 573: (AIR 1916 PC 227) (A), where a mortgagee in possession intentionally allowed the land revenue to fall in arrears, although the other co-sharers had paid their respective contributions of land revenue to the mortgagee their Lordships of the Privy Council made the following observation :
'He (mortgagee) was however, represented by agents, and when the position created by them is regarded as a whole, it leads to the conclusion that the Government revenue was intentionally allowed by them to fall in arrear with a view to the property being put up for sale and brought on behalf of the minor, if this he the true view, as their Lordships hold, men, however, free from personal blame the minor may have been, he cannot profit by his agent's deliberate default committed in breach of the terms of the mortgage.
As against his mortgagor, therefore, the mortgagee cannot be allowed to hold for himself the advantage gained by the default for which his agents were responsible. Nor can he be permitted to hold for himself this advantage to the prejudice of the co-owners.'
These observations very aptly apply to the facts of the present case. The case of Akshaykumar Nath v. Ahmed Ali (B), (cit. supra) was a case of a co-sharer procuring default by another co-sharer liable to pay land revenue with a view to purchase the share that may be sold in the auction. The Division Bench held that, the co-sharer committing the fraud, was liable to reconvey the property to the owner. The case of Deonandan Prashad v. Jankisingh (A) was relied on.
The case of Parkash Narain v. Birendra Bikram singh (C), (cit. supra) laid down that in order to arrive at the finding of fraud, no direct evidence was necessary, but sufficient circumstantial evidence which would lead to an inference of fraud, was enough. In the case of Lala Laxminarayan v. Rukhmabai (D), (cit. supra), a Division Bench of the Nagpur High Court consisting of Hidayatullah J., (as he than was) and Mudholkar J., while enunciating the principles, ay settled by the case law, made the following observations :
'In determining fraud there are certain principles upon which Courts act. Fraud and dishonesty are not to be assumed upon mere conjecture (see (F), and the burden of proving fraud is upon the party alleging it: see Muthiah Chetti v Palaniappa Chetti, AIR 1928 PC 139 (C). In determining whether there is proof of fraud each relevant piece of evidence is not to be viewed in isolation but in relation to the other facts, and the conduct of the parties must he viewed as a whole: see Ghunsham Das v. Umapershad, 15 Nag LR 68: (AIR 1919 PC 6) (H).
Where, however, oral evidence on either side is not convincing the Court may rely on the surrounding circumstances and the position of the parties, their motives, and their conduct: Dalip Singh v. Nawal Kunwar, ILR 30 All 258 (PC) (I). It is also to be remembered that direct evidence of fraud is not always available, and if this were necessary many a fraud would never come to light.'
Applying the tests as laid down by the said cases, I may say that the courts below were in error in excluding the circumstantial evidence, which convincingly would lead any court to an inference of fraud. The case of Deonandansingh v. Manbodhsingh (E), (cit. supra) does not help the respondent in the present case, as the auction purchaser here cannot be said to be an innocent person, nor can it be said that the sale was bound to be held in any case as was the fact in the said reported case. The said case is clearly distinguishable from the present case, which is apalogous to the case of Deo Nandan Prashad v. Jankisingh (A), (cit. supra).
5. Section 123 of the C. P. Land Revenue Act, lays down that, all land revenue payable under the Act, shall be paid through Sadar Lambardar, lambardar or patel as the case may be; only, the malik makbuza is required to pay the land revenue directly to the Government. Thus, although land revenue may be payable by a co-sharer, the Section requires that it has to be paid through one of those persons, who hold the said office.
Thus if a co-sharer does his duty by paying the amount to one of the authorised persons, I think he should not be penalised, if a revenue sale were to be held for the default of the sadar lambardar or the lambardar, who is liable to pay the land revenue of the whole of the village or patti. Further, Section 149 (2) of the C. P. Land Revenue Act, provides that nothing in Sub-section (1) of the said section shall bar the institution of a suit in the civil court to set aside a sale on the ground of fraud, or on the ground that the arrear for which the property is sold is not due. Thus the present suit was not barred by Section 149 of the C. P. Land Revenue Act, but it fell within the ambit of the same.
6. Having come to the conclusion that the is proved upon a consideration of all the relevant circumstances, the judgments and decrees of the two courts below must be set aside. The appeal succeeds and is allowed with costs throughout.
7. In the present case although the village share, which vested in the State, was sold in auction which sale has now been set aside by this court, the present appeal will not abate at least inrespect of the amount of compensation payable under the Madhya Pradesh Abolition of ProprietaryRights Act No. 1 of 1951, as also any home farm or home-stead attached to the said village share, as also any other property which may be the property of the ex-proprietor saved under the provisions of the said Act. The ex-proprietor would continue to hold such property as is mentioned in Sections 4, 5, 38 and 40 of the Act. I need not decide the question here. The matter is kept open for inquiry in execution, if so found necessary.