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Kandaswami Mudali Vs. K.R. Narasimha Ayyar and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtChennai
Decided On
Reported inAIR1948Mad280; (1948)1MLJ333
AppellantKandaswami Mudali
RespondentK.R. Narasimha Ayyar and ors.
Cases ReferredRawa Mahton v. Ramakrishna Sing I.L.R.
Excerpt:
- - the auction-purchaser does not lose much, though if it was an exceedingly good bargain in the sense that property was purchased for a very low value, his loss might be substantial......90 and section 47 of the civil procedure code alleging that it had been agreed between him and the decree-holders and the assignee-decree-holders that the property was not to be brought to sale on his payment of rs. 1500 and that as a matter of fact, he paid the amount, which was passed on to the decree-holders. the subordinate judge held that this agreement had been proved and that the sale of the property contrary to the agreement amounted to a fraud on the part of the decree-holder. he also found that the property was sold for an under-value. the auction purchaser had no kowledge of the agreement.2. thus, it is a case where we have to decide which of two innocent parties should suffer--the 98th defendant or the auction-purchaser--the very question, which their lordships of the privy.....
Judgment:

Chandrasekhara Aiyar, J.

1. This is an appeal by the auction-purchaser from the order of the Subordinate Judge of Coimbatore setting aside a sale at the instance of the -98th defendant, who is interested in item 4 and who came forward with an application under Order XXI, Rule 90 and Section 47 of the Civil Procedure Code alleging that it had been agreed between him and the decree-holders and the assignee-decree-holders that the property was not to be brought to sale on his payment of Rs. 1500 and that as a matter of fact, he paid the amount, which was passed on to the decree-holders. The Subordinate Judge held that this agreement had been proved and that the sale of the property contrary to the agreement amounted to a fraud on the part of the decree-holder. He also found that the property was sold for an under-value. The auction purchaser had no kowledge of the agreement.

2. Thus, it is a case where we have to decide which of two innocent parties should suffer--the 98th defendant or the auction-purchaser--the very question, which their Lordships of the Privy Council posed for answer in Lalla Bunsee Dhur v. Koonwar Bindesree Dutt Singh (1866) 10 M.I.A. 454. Once fraud is made out on the part of the decree-holder and it has resulted in substantial injury, the fact that the purchase by the auction-purchaser is a bona fide one without notice of the fraud does not seem to matter. It was so held in Bireswar Ghose v. Panchkouri Ghose (1922) 27 C.W.N. 587.

3. The argument addressed by the appellant is that the fraud must be in conducting the sale, i.e., in taking the requisite steps for bringing the property to sale. For this limited interpretation there is really no warrant. The fraud may be at various stages and the very first stage is when property, which was agreed not to be sold, is brought to sale, contrary to the agreement. ' Conduct of the sale ' means and includes every step taken from the beginning to the end for the purpose of bringing the property to sale. This is what was held in Sheik Mulla Bux v. Raghubir Ganjhu (1918) 3 Pat.L.J. 645. The general observations found in Rawa Mahton v. Ramakrishna Sing I.L.R. (1887) Cal. 18, are not of much use so far as the facts in this case are concerned. Fraud having been found and inadequate price, the lower Court had a right to set aside the sale. The auction-purchaser does not lose much, though if it was an exceedingly good bargain in the sense that property was purchased for a very low value, his loss might be substantial. By the sale being set aside, he gets back what he has paid and he will have every opportunity to bid for it again at a fresh sale, if he is keen on its acquisition.

4. The civil miscellaneous appeal is dismissed with costs.


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