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V.K.R.S.T. Narayanan Chettiar and (dead) and Ors. Vs. the Right Hon'ble the Secretary of State for India in Council through the Collector of Ramnad and Ors. (08.03.1940 - MADHC) - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai
Decided On
Reported inAIR1941Mad561; (1941)1MLJ543
AppellantV.K.R.S.T. Narayanan Chettiar and (dead) and Ors.
RespondentThe Right Hon'ble the Secretary of State for India in Council through the Collector of Ramnad and Or
Cases ReferredTasadduk Rasul Khan v. Ahmad Husain
Excerpt:
.....the lower courts were not justified in coming to the conclusion which they did in the absence of direct evidence. their lordships cannot accept the judgment of the judicial commissioner that loss is to be inferred from the mere fact that a sale was had without full compliance with the provisions of section 290. the section clearly contemplates direct evidence on the subject, the words 'direct evidence' apparently being used in contradistinction to circumstantial evidence. so that if the collector gives any substantial reasons at all why a sale should be set aside his order is good. these provisions are not intended to set up civil courts as appellate authorities over the lawful acts of government servants done in good faith. where, for example, there was ample evidence before the..........the lower courts were not justified in coming to the conclusion which they did in the absence of direct evidence. macnaghten v. mahabir pershad singh , decisions of the privy council have been referred to as indicating that some direct evidence is necessary. in these cases, especially in the former, there was no particular reason why the court should have concluded that the irregularity was likely to lead to any substantial loss; but tasadduk rasul khan v. ahmad husain , contains a passage at page 70 which supports the argument of the learned advocate for the appellant. it runs as follows:their lordships cannot accept the judgment of the judicial commissioner that loss is to be inferred from the mere fact that a sale was had without full compliance with the provisions of section 290......
Judgment:

Horwill, J.

1. On the 31st December, 1932, the share of the third defendant in a house and garden was brought to sale by the Revenue authorities because of his failure to pay income-tax. The third defendant's share is said to be worth Rs. 17,000. It was actually sold for Rs. 800. On 23rd February, 1933, the Sub-Collector, in the absence of any application to set aside the sale, confirmed it. The second defendant, a creditor of the third defendant, had attached the same property in execution of a money decree on the 31st March, 1933 and on the same date he filed an application before the Collector under Regulation VII of 1828. The Collector, exercising his powers of revision set aside the order of the Sub-Collector of the 23rd February, 1933, confirming the sale. The Collector was of opinion that two material irregularities had been committed (1) an incomplete description of the third defendant's interest in the house and garden and (2) that the property had been sold in one lot instead of the garden and the portion of the house being sold separately. He also found that the property had fetched a very low price; but he did not say that the low price was a result of these material irregularities. The present appellant thereupon filed this suit on the 2nd April, 1934, under Section 59 of the Revenue Recovery Act to have the Collector's order set aside and the sale confirmed. Both the trial Court and the lower appellate Court found that there was a material irregularity in the description of the third defendant's share of the garden and drew the conclusion, which they considered to be reasonable under the circumstances, that the low price was the direct result of the material irregularity.

2. It is here argued that there is no evidence that the low price resulted from the material irregularity and Section 38 (1) of the Revenue Recovery Act has been referred to show that it is necessary before setting aside a sale that the Collector should be satisfied that a substantial injury resulted from the irregularity and that the lower Courts were not justified in coming to the conclusion which they did in the absence of direct evidence. Macnaghten v. Mahabir Pershad Singh , decisions of the Privy Council have been referred to as indicating that some direct evidence is necessary. In these cases, especially in the former, there was no particular reason why the Court should have concluded that the irregularity was likely to lead to any substantial loss; but Tasadduk Rasul Khan v. Ahmad Husain , contains a passage at page 70 which supports the argument of the learned advocate for the appellant. It runs as follows:

Their Lordships cannot accept the judgment of the Judicial Commissioner that loss is to be inferred from the mere fact that a sale was had without full compliance with the provisions of Section 290. The section clearly contemplates direct evidence on the subject,

the words 'direct evidence' apparently being used in contradistinction to circumstantial evidence.

3. I do not however consider it necessary to decide whether the wording of Section 38 (1) prohibits the deduction of an inference, in the absence of direct evidence, that a low price was a direct result of the irregularity; for the order passed by the Collector was not one under Section 38 (1) of the Revenue Recovery Act. Under Regulation VII of 1828 the Collector has power to delegate his authority in certain matters; and the Sub-Collector in bringing this property to sale under the Act, was exercising such a delegated authority. That Regulation empowers the Collector to control the acts of the Sub-Collector in exercise of that delegated authority by revising the orders of the Sub-Collector. When the Collector acted on the petition of the second defendant, he was revising the order of the Sub-Collector confirming the sale. So that the position after the Collector had exercised his revisional power was that the sale had not been confirmed. If therefore the Collector was to set aside the sale at all, he could act only under Section 38 (3); for no application under Section 38 (1) had been filed. The terms of Section 38 (3) are very much wider than those of Section 38 (1), and the sale can be set aside for very many more grounds than under Section 38 (1). All that is necessary under Section 38 (3) before setting aside the sale is that the Collector should have reason to think that the sale ought to be set aside; so that if the Collector gives any substantial reasons at all why a sale should be set aside his order is good. It is not necessary that he should find that there was a material irregularity; it is not necessary that he should find that the price was unduly low. Still less is it necessary that the Collector should come to the conclusion that the lowness of the price was a direct result of some material irregularity.

4. In this view, it is unnecessary to consider the scope of a suit under Section 59. Section 59 is worded very widely and does afford some ground for an argument that the Civil Courts have the same freedom in considering all the evidence relating to the conduct of the sale and the reasons for setting it aside as the Collector had in the first instance under Section 38. If this is so, the Civil Court sits in appeal over the decision of the Collector. It is however difficult to think that this is what was intended by the Legislature. There is no direct authority bearing on this question under the Revenue Recovery Act; but the general principle underlying such provisions found in such legislation is that members of the public should have some protection against illegal and arbitrary acts of executive officers. These provisions are not intended to set up Civil Courts as appellate authorities over the lawful acts of Government servants done in good faith. Where it can be but a matter of opinion whether there were sufficient grounds for the act of the executive authority, there would be no reason for interfering with the executive order; for the opinion of the executive officer on the merits of the application before him would be entitled to as much weight as the opinion of a Civil Court. Where the executive authority acts in some illegal or improper or arbitrary manner, then and then only, in my opinion, could a Civil Court interfere with the order passed. Where, for example, there was ample evidence before the Collector to justify the setting aside of a sale under Section 38 (1), it is difficult to believe that the Legislature intended that the Civil Court could set aside that order merely because the petitioner had failed to adduce the same evidence before it.

5. This point is only of academic interest in this case, however, for both the Courts have here found that there was a material irregularity in the proclamation by which the half share of the third defendant in the house and gardens was to be sold. It is true that it did not say that the portion was undivided; but the description was so vague that intending purchasers might well have apprehended, even if they knew what the third defendant's share was, that if they had purchased the property and obtained a sale certificate in the terms of the proclamation, more litigation would have been necessary before they could secure peaceful enjoyment of the property. The third defendant actually owned the northern half of the house in question and the whole of one of three gardens; so that there was good ground for the finding of the Courts below that there was a material irregularity in the proclamation which amounted to a sufficient cause (or setting aside the sale.

6. The appeal therefore fails and is dismissed with costs (two sets). The Advocate's fees will be fixed at Rs. 35 each.


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