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P.V. Raghavachariar, by His Authorised Agent, P.R. Srinivasan Vs. Murugesa Mudali and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1923Mad635; (1923)44MLJ680
AppellantP.V. Raghavachariar, by His Authorised Agent, P.R. Srinivasan
RespondentMurugesa Mudali and ors.
Cases ReferredBrij Mohun Thakur v. Rai Uma Nath Choudhury I.L.R.
Excerpt:
.....the lots, if any, into which the property should be divided, and the market value of, and the reserve price to be fixed for the property. now, an affidavit was put in of which the tenor was that it was very doubtful whether the judgment-debtors had any interest in the property at all which was proposed to be sold, that they had claims to it which were subject to litigation, and the outcome of that litigation, like most litigation, was uncertain and that it was impossible, therefore, to give any idea of the market value. the registrar not being satisfied that that was a proper compliance with the rule, a further paragraph was added by the plaintiff that, under the circumstances stated in the rest of the affidavit, the market value of lot no. in this case i am quite satisfied that he..........refused to confirm the sale on the ground that all the facts were not placed before him when the reserve price was fixed and when the plaintiff obtained leave to bid. there is a misapprehension on the part of the learned judge in that the application for leave to bid was to him, but the application to fix the reserve price was to the registrar and not to him. i do not think it is enough to say, in order to refuse to confirm a sale, that all the facts were not put before the court on the two occasions referred to. but, in my judgment, the court has an inherent power that the court has been misled either in giving leave to bid or in fixing the reserve price. this is only an instance of the inherent power possessed by all courts to prevent an abuse of the process of the court, but, of.....
Judgment:

Walter Salis Schwabe, K.C., C.J.

1. This is an appeal from an order of Kumaraswami Sastri, J., refusing to confirm a sale made at Court auction. He has refused to confirm the sale on the ground that all the facts were not placed before him when the reserve price was fixed and when the plaintiff obtained leave to bid. There is a misapprehension on the part of the learned Judge in that the application for leave to bid was to him, but the application to fix the reserve price was to the Registrar and not to him. I do not think it is enough to say, in order to refuse to confirm a sale, that all the facts were not put before the Court on the two occasions referred to. But, in my judgment, the Court has an inherent power that the Court has been misled either in giving leave to bid or in fixing the reserve price. This is only an instance of the inherent power possessed by all Courts to prevent an abuse of the process of the Court, but, of course, the Court will not use that inherent power unless it has had all the facts fully before it and is satisfied that it has been misled. I think the principle is that, in order to show that the Court has been misled, it is necessary to show either actual misstatements to the Court or nondisclosure to the Court of relevant facts unknown to the Court and which there was a duty to bring before the Court. How far that duty goes, in applications for leave to bid and in applications to fix the reserve price may, I think, be found in the judgment of the Privy Council in Mahomed Mira Ravuthar v. Savvasi Vijaya Raghunadha Gopalar I.L.R. (1899) Mad.. 227 quoting passages from the judgments of Lord Selborne and Lord Fitz-Gerald in Coaks v. Boswell (1886) 11 A.C . 232, and they come at least to this, that if a party professes to give the Court information on any particular subject with a view to guide its discretion and obtain its approval, he is bound to lay before the Court all the material information he possesses on that particular subject.

2. There were two stages in which the present plaintiff gave information to the Court. The first was to the Judge himself on his application for leave to bid and I am not prepared to say that there were materials, relevant to the consideration as to whether he should be allowed to bid or not, known to him which he did not disclose. I think he did give a very meagre statement of facts on that occasion, but I am not convinced that the full statement of facts was relevant for the consideration of the Court in deciding whether he should bid or not, because on that application certainly the main question for the Court to consider is whether it is to the advantage or disadvantage of every one concerned in order to obtain the highest price that the plaintiff should be allowed to bid or not. The second stage in which he gave information was on his second application which was to the Registrar, and that was under Rule 205 of the original side rules by which the applicant for sale has to put in an affidavit stating what, in his opinion, is the best time and place of sale and method of advertising the same, the lots, if any, into which the property should be divided, and the market value of, and the reserve price to be fixed for the property. Then under Rule 206 the Registrar is to determine the various matters and, in the event of any objection being raised to the lots, the market value or reserve price mentioned in the affidavit, the question is to be determined by a Judge in Chambers. Now, an affidavit was put in of which the tenor was that it was very doubtful whether the judgment-debtors had any interest in the property at all which was proposed to be sold, that they had claims to it which were subject to litigation, and the outcome of that litigation, like most litigation, was uncertain and that it was impossible, therefore, to give any idea of the market value. The Registrar not being satisfied that that was a proper compliance with the Rule, a further paragraph was added by the plaintiff that, under the circumstances stated in the rest of the affidavit, the market value of lot No. 1, which is the lot in question, might be fixed at Rs. 3,000; and so the reserve price was fixed. The matter, did not go before the judge because no one seems to have taken any objection to the reservation of that price. It is true that on those proceedings one of the judgment-debtors was represented and the other had been served with a notice; but that fact does not, in my judgment, in any way relieve the plaintiff from the obligation to set out the relevant facts in his affidavit, nor reduce the liability on him, when he does state facts, to lay before the Court all the material information he possesses about those facts. In this case I am quite satisfied that he did not comply with that obligation. There was a fact well-known to him, namely, that the property in respect of which the judgment-debtors claimed (and has since been held by the Court) to have a two-thirds interest, had been put up for sale by the Court before and that the Court had fixed Rs. 45,000 as the reserve price and a bid of Rs. 36,000 had been refused on the ground that it was not great enough. It might have been a question for argument before the Registrar that, notwithstanding that fact, a very low price with no reserve price should be fixed in this case because of the doubt as to the judgment-debtors' title, but the Registrar was not given the opportunity of making up his mind upon that or receiving any such argument because the fact was entirely suppressed from his knowledge. I am convinced that, whatever the result might be, any Tribunal that had to make up its mind as to what the reserve price should be would, infact, be greatly influenced by such information as was in this case suppressed, namely, that the Court itself for the property in dispute had on a previous occasion fixed a very high price as the reserve priceand refused the bid of an amount such as was refused in this case. I think, therefore, that there were all the elements necessary for the Court to act on its inherent powers. The plaintiff had taken upon himself to give the Court information as to the value. He had told the Court certain facts and not told the Court other facts relevant for the Court's consideration and unknown to the Court. I am satisfied that the learned Judge's order was right. It seems to me that it is not, as I have pointed out, correct to say that he was deceived in respect of the price, and I doubt if he was right in the view he took that in respect of allowing the plaintiff to bid he ought to have had that information before him. I am satisfied on the other application, namely, the application before the Registrar, that there was a suppression of a material fact, and, therefore, the sale cannot be confirmed.

3. This appeal must be dismissed with costs.

Wallace, J.

4. I am of the same opinion. I am not satisfied that knowledge of the facts of the previous auction, in which the property was valued at Rs. 45,000 and as being the joint family property of the plaintiff's two judgment-debtors and another, would have led the executing Court to refuse the plaintiff permission to bid, but I am satisfied that that knowledge would, in the case of his second sale, in which the property was again advertised as the joint family property of the plaintiff's two judgment debtors and another, in all probability, have restrained the Officer of this Court, whose duty it was to fix the upset price, from fixing an upset price at any figure so low as Rs. 3,000, and would, therefore, have resulted in preventing the selling officer from knocking down the, property for Rs. 36,000. The suppression of this fact by the plaintiff was, therefore, a suppression of a material fact. Further, it was clearly his duty, when the Court had to fix this upset price, and he elected to put before it such facts as he knew relevant to that point, to put forward all the material facts within his knowledge on that point, to enable the Court to fix the value for the purpose of settling that price. In fact, it was his duty to put before the Court those facts which he chose to put forward at length in his subsequent affidavit of the 5th of March, which he chose to put forward only when the question of confirming his sale arose. In his affidavit of the 3rd of November, 1920, which does discuss the difficulties in fixing the value, the plaintiff withheld deliberately, I am satisfied the very material fact of the prior auction, and did not fairly and openly state to the Court the factors in the problem which he put to himself and of which he himself was aware and the Court was not. That the Court Officer was not aware of it seems to me obvious. The judgment-debtors had added nothing to what the plaintiff stated in his affidavit, and I find nothing in the plaintiff's affidavit to put the Court on notice of this previous auction. Thus, the ingredients necessary to prove misrepresentation necessary to. justify the setting aside of the sale are present Order 21, Rule 92, and the Privy Council ruling in Brij Mohun Thakur v. Rai Uma Nath Choudhury I.L.R. (1892) Cal. 8 are in my view, no bar to the Court interfering to cancel the sale, even though no party has applied for cancellation when the Court discovers, in the Course of the proceedings, that the decree-holder (auction-purchaser) deliberately misled it, and profited thereby to the disadvantage of the judgment-debtor or the judgment debtor's creditors.


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