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Mt. Mahmooda Bibi and anr. Vs. Mt. Nainoo Bibi and ors. - Court Judgment

LegalCrystal Citation
Decided On
Reported inAIR1937Cal384
AppellantMt. Mahmooda Bibi and anr.
RespondentMt. Nainoo Bibi and ors.
- .....therefore this was not a sale under the act. nor in my opinion do the subsequent orders under this sale, a sale under the act. the second point is, non-compliance with those orders. the point taken by counsel was that the commissioner had failed to fix a reserve as provided in the order. counsel appearing for the commissioner made a statement which i understand was accepted by the parties to the effect that a reserve had been fixed. it is also accepted that the sale is at a price below reserve. the point which occurred to me was: in that event under this order was the commissioner entitled to sell below reserve? that seemed to be a better point. again, it seems to me the mere fact that the commissioner is directed to fix a reserve in the circumstances of this case and on the language of.....

Ameer Ali, J.

1. In this matter I had come to a conclusion at the end of the hearing; I reserved judgment because I desired to reconsider the whole matter. It is clear that the parties attach great importance to the result. The matter was argued at length before me and from the fact that large number of counsel were briefed including the Advocate-General the parties must have gone to very great expense. I regret I am unable to assist them. The point is shortly this. A Commissioner in a partition suit has entered into an agreement to sell. The purchaser is represented before me. The application is in terms for an injunction restraining the Commissioner and the purchaser Messrs. Magniram Bungur from proceeding with the sale. I omit the verbiage. Secondly, that the Commissioner of Partition be directed to accept the highest offer of Khan Bahadur Syed Mahomed Jan. That was an offer, as I shall indicate, made subsequent to the agreement for sale, though in form asking for an injunction what the applicants ask for before me is a direction or order on the Commissioner not to complete. That is the relief asked for.

2. The short facts are as follows: The partition suit was filed in 1916. As far as I remember there were then four parties to the suit, at this moment there are forty. There was a consent decree the terms of which I have myself referred to by which the parties agreed to a sale by the Commissioner of the property now in question. The property was not sold for many years. The date of the consent decree to which I have referred is 26th March 1920. On 28th August 1929 there was an order for sale made is the suit of the land in question which is Ex. A to the petition. That order incidentally directed the Commissioner to fix a reserve and to sell provided he, 'the Commissioner, shall consider that a sufficient sum has been offered'. Under this order on 26th July 1935 an agreement was entered into with the Dominion Insurance Company for a sum of Rs. 2,76,400. This purchaser failed to complete. By reason of this failure there was a further order on 7th September 1936 a copy of which was banded up to me by which the cancellation of the agreement with the Dominion Insurance Company was directed and the Commissioner was further directed to sell in terms of the earlier order, that is, the order of 28th August 1929. The Commissioner amended certain conditions of sale, those are mentioned in paras. 9 and 10 of the petition. On the 28th September the Commissioner called a meeting of the parties and the minutes of this meeting and those of the subsequent meeting on the 2nd October are exhibited. On the 2nd October the offer of Magniram Bungur was accepted on the amended condition of sale for the sum of Rs. 2,76,400.

3. On the 8th October Magniram Bungur made a deposit of Rs. 25,000. On the 5th, 6th and 8th October meetings were held by Commissioner for settlement of the draft agreement. I think the notice of motion in this matter was taken out on the 7th December for the reliefs I have already indicated and an interim injunction was granted. There was a hearing on the 4th January and it was at this hearing I think that on a preliminary point being taken by Mr. B.N. Ghose for the purchaser, counsel for the applicant made it clear the relief he was asking for was really in the nature of directions upon the Commissioner not to complete. There being no suit, it is obvious that there can be no injunction against the purchaser or indeed against anyone. It was on that date also I think the purchaser made it clear that he was ready to complete immediately if the injunction were removed.

4. Before I deal with the contention of the petitioner I must refer to certain allegations in the petition which go to suggest misconduct on the part of the Commissioner in refusing to entertain a higher offer and I must comment on the way that material was put before the Court. In para. 17 it is suggested that on 28th September 1936 a higher 'offer of Rs. 3 lacs was made which was not treated by the Commissioner as a firm offer' (see again para. 18) 'two other bona fide purchasers' (para. 22) 'secure a purchaser for Rs. 3 lacs' (para. 23). 'The party whose offer was highest, i.e. Rs. 3 lacs,' 'ignored an offer of 3 lacs made by the aforesaid highest bidder' and then (para. 25):

The Commissioner refused to consider the highest offer of 3 lacs made by the said highest bidder Khan Bahadur Syed Mahomed Jan.

5. All that is calculated and I think intended to convey to the Court that this gentleman had made the firm offer of 3 lacs referred to throughout. In my opinion it was a foolish and dishonest attempt to suggest to the Court that this offer, the offer which is now before the Court, was made to the Commissioner before the agreement with Magniram Bungur. I say dishonest because it was bound to be found out; foolish because that sort of thing tends to prejudice the case of a petitioner seeking to make a case of misconduct. There is no evidence when the offer of Khan Bahadur Syed Mahomed Jan was made. That it was made and is genuine I am perfectly satisfied, but it was made after all these meetings were over. Apparently, the offer of 3 lacs referred to in the earlier paragraphs was an offer made by Messrs. Rudra & Co. by letter, which offer was withdrawn at the meeting of the 2nd October. I have, however, not allowed the circumstance I have referred to prejudice the petitioner's case. It is my experience that the parties themselves are as a rule less responsible for those things than their legal advisers. The petition mentions 'several higher offers' and then in affidavit in reply there is reference to offers by Mr. D.C. Dutt and Mr. A.K. Guha. The offer of D.C. Dutt was Rs. 2,83,000 and was on the terms and conditions of the contract with the Dominion Insurance Company. The offer of A.K. Guha on behalf of a certain Mr. Ganguly of Rs. 2,81,000 was subject to investigation of title. However, if I recollect rightly notice to one of these offerers was given of the meeting of 2nd October. Those are the facts.

6. Now the contention of the petitioner is as follows: The first is a technical point of law which if good is sufficient in my opinion to determine the question namely, that the Commissioner in this partition was bound to follow the rules in Ch. 27 of the Rules and Orders of this Court. I should have mentioned, that the Commissioner does not profess to have followed them. The Partition Act by Section 7 so far as I remember provides that 'in all sales under the Act' the Commissioner shall follow the rules I have mentioned. I have made inquiries from the Registrar and in point of fact the Registrar whether selling under the Act, or selling as Commissioner in small partitions does in fact follow those rules, but the question is whether a Commissioner is in all circumstances, where a sale takes place in a partition action, bound to follow them. That in my opinion depends simply on the terms of the Act and the Act says 'Sales under the Act'. Not a very happy phrase but it must be construed to mean sales held in pursuance of the powers provided by the Act, not all sales.

7. Now, this is the purpose for which I looked at the original consent decree. The parties did agree in that to a sale by the Commissioner, incidentally at his discretion (Cl. 9 of the terms of settlement):

In default of agreement, as the said Commissioner may direct for such price as may be agreed upon or as the said Commissioner may approve of.

8. The whole matter was therefore left by consent to the Commissioner. But the point is, it was a sale by consent, and as I understand the law that was a course perfectly open to the parties before the Partition Act was ever thought of, the Partition Act being as I understand to provide for the case of deadlock where certain parties did not agree. In my opinion therefore this was not a sale under the Act. Nor in my opinion do the subsequent orders under this sale, a sale under the Act. The second point is, non-compliance with those orders. The point taken by counsel was that the Commissioner had failed to fix a reserve as provided in the order. Counsel appearing for the Commissioner made a statement which I understand was accepted by the parties to the effect that a reserve had been fixed. It is also accepted that the sale is at a price below reserve. The point which occurred to me was: in that event under this order was the Commissioner entitled to sell below reserve? That seemed to be a better point. Again, it seems to me the mere fact that the Commissioner is directed to fix a reserve in the circumstances of this case and on the language of this order does not mean that he is bound to sell above reserve and that failing that he is bound to get the directions of the Court. It might be better to do so but it is not a failure to carry out the terms of any order.

9. The third point or class of points by counsel for the applicants are what I think he referred to as 'general principles' some of which I am afraid I was unable to follow. There was a question of notice. The point taken was no notice of the meeting was given to some of the parties, a matter to which I may refer again. The other principles to which I was referred by counsel or some of them are these: That the Commissioner has got to satisfy the Court that the sale was in the interest of all parties. That the Commissioner has got to get the consent of all the parties or get the direction of the Court.... That where minors are concerned, consent of every party has to be obtained. There is ample jurisdiction for me to interfere. I use counsel's own language. Now with regard to notice it is clear that the bulk of the parties were present. It is possible that all the parties did not actually receive notice; I proceed on the assumption that some did not receive notice. Mr. Mitter appearing for the Commissioner informs me all the parties except one who had died and whose substitution had not been obtained were named in the notice of motion, and it is stated in the affidavit in opposition that notices were sent to them. But I am prepared to assume that some of those who did not appear were not actually served. It is however very unlikely that such persons did not hear of the meetings. The bulk of the parties were present or represented and for all practical purposes, the presence of one or two additional par. ties would in my opinion have made no difference whatsoever.

10. That brings me to the ground which may be generally called misconduct. I have already commented upon one part of the evidence which has been put before the Court. I asked counsel to summarise his points and they were these: Other higher offers were 'suppressed' and he gave as instances D.C. Dutt's offer and A.K. Guha's offer. That there was a 'collusive sale'. I asked him to explain this troublesome word 'collusive,' he said, there was a ring among bidders assisted by the Commissioner. And lastly, that the whole matter 'smacked of fraud'. In my opinion such materials as were placed before the Court were entirely insufficient to make out any case of fraud and it was of no assistance to client's case to advance arguable technical points under a smokescreen of fraud. It is quite clear that the Commissioner was doing what he and the parties considered best. The matter had dragged on for a long time; there was urgency. After it was all over a gentleman either out of public spirit or business acumen or both did come forward with an offer of greater advantage to the parties. As I have said if I could, I would order a fresh sale but I see no ground upon which I can justifiably do so. The purchaser has deposited his earnest money and is losing interest on it; he wishes to stick to his bargain. It seems to me were I to order a fresh sale because better terms can now be obtained, I might be doing the parties some good in this case but it is not a principle on which I feel justified in acting.

11. There is one further matter which I omitted to mention, a point taken on behalf of the applicants and that is the question of time. The time for completion of the contract if I remember rightly was 20th September. On 14th the purchaser wrote asking for further time. The letter was not answered but in the meantime an injunction had been obtained on 7th December; I am not quite clear how counsel put his case on this point. I was asked not to extend the time for completion. I do not propose to do so. It seems to me the position may be summed up as follows: The first question is, was that letter asking for time a repudiation? Either it was or it was not. If it was a repudiation the question of acceptance may arise. Whether as a matter of contract the purchaser is entitled to extra time again is a matter with which I am not dealing, but I am not satisfied in the least that by reason of the letter of the 14th or by reason of the expiry of the time during the currency of the injunction that is any ground for directing the Commissioner not to complete. That is the only thing I am asked to do and I can do. Apart from that whether the Commissioner does complete or not is not a matter for me, but a matter governed by the law of contract. The only order therefore that I can make in view of what I have said is to dissolve the order made. If the petitioners desire to appeal I am prepared to maintain the order for a limited time.

12. The only other question left is the question of costs. The Commissioner will get his costs out of the assets as between attorney and client. The purchaser will also get his costs from the applicant. The mortgagees' costs and plaintiff's costs will have to be paid by the applicant. I have allowed an affidavit to be filed today by the Commissioner under these circumstances. The higher offer mentioned without particulars in the petition was indicated in the affidavit in reply by the giving of two names and it was said two letters had been written. I made inquiries from counsel appearing for the Commissioner and he produced before me the copies of the correspondence and an explanation from the Commissioner. This I thought should be on the record in the event of the matter proceeding further. I have been asked to give directions as to the costs of the parties supporting the application, particularly as to the costs of the official guardian-ad-litem appearing in this case. I refuse to make any further directions.

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