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Krishna Mohan Kundu Vs. Nripendra Nath Nandi and ors. - Court Judgment

LegalCrystal Citation
Decided On
Reported inAIR1933Cal662,147Ind.Cas.314
AppellantKrishna Mohan Kundu
RespondentNripendra Nath Nandi and ors.
Cases ReferredMahabir v. Dhanuk Dhari
- .....or was in fact prevented from coming to bid on account of non-specification of the hour. the learned subordinate judge has said:it is beyond dream that such an omission could or did prejudice any bidder or any party interested.6. there is no justification for this comment, but at the same time it is clear that there is no evidence in this case from which it can be legitimately inferred that the inadequacy of price was the result of this irregularity. on the other hand the bid sheet at p. 41 shows that there were two bidders from ultadingi and cossipore; one of them jahari lal bid up to rs. 41,200, and the other hari gopal did bid up to rs. 38,600, and they were present at the sale notwithstanding the non-specification of the hour of sale. the price fetched at the sale is not so.....

Mitter, J.

1. This is an appeal against an order of the Subordinate Judge of 24-Perganas dated 22nd March 1930 by which he refused to set aside a sale held in execution of a mortgage decree. The appeal is on behalf of Krishna Mohan Kundu who is one of the several judgment-debtors in the case. It appears that the respondents who will be described as the Nandys in this proceeding obtained a mortgage decree for a sum of about Rs. 88,800 against the appellant and several other persons on 26th March 1929. The Nandys applied to execute the said decree on 15th April 1929 and in execution of the said decree purchased some of the mortgaged properties on 23rd August 1929 for the sum of Rs. 69,000. On 19th September Krishna Mohan who is judgment-debtor 3 applied to set aside the Bale held on 23rd August 1929. The properties were sold in four lots, i.e., lots Nos. 1, 2, 3 and 4 on 21st and 22nd August for Rs. 69,000 and the decree-holder purchased all the properties. The petition to set aside the sale complained of several irregularities: (1) misdescription of the properties; (2) irregularities in the advertisement in the vernacular local paper; (3) objection to the settlement of the terms of the sale proclamation under Order 21, Rule 66, Civil P.C., was not determined before the sale; (4) the hour of holding the sale on 21st August was not stated as is required by the provisions of Order 21, Rule 69, Civil P.C.; (5) and there was inadequacy of price as a result of these irregularities. All these objections were overruled by the Subordinate Judge who dismissed the application of the appellant and confirmed the sale.

2. Against this order confirming the sale the present appeal has bean brought and the same objections to the legality of the sale which were pressed before the lower Court have been repeated before us by Mr. Bose who has appeared for the appellant. I will deal with the objections in the order in which they were discussed before us. With regard to the irregularity about the misdescription of the properties it is said that lots Nos. 1 and 2 were amalgamated into one premises No. 6, Bhowanipur Road. This was not stated in the sale proclamation, but two premises No. 6, Bhowanipur Road and No. 14, Goaltuli Road were shown separately. In answer to this contention it is said on behalf of the respondent that the properties were described in two lots as the mortgage decree directed the sale of these two lots and that no one could have been misled as the boundaries of two lots were given in the sale proclamation. I think there is considerable force in the contention of the respondent and I do not regard this irregularity as a material one.

3. With regard to the second irregularity it is said that no full particulars were given in Bhowanipur Bartabaha, a local newspaper, and what was done was that a description of only one lot was given and for the other lots, Nos. 2 to 5, it was stated that the particulars of those lots would be found in the original sale proclamation. It is pointed out by the Subordinate Judge that it is usual for the Bartabaha to publish the first property in all its details and refer for the description of the rest to the sale proclamation. I do not think that this irregularity has misled any bidder or has prevented any intending bidder from bidding at the sale.

4. Next objection is that there has been a material irregularity inasmuch as the Court did not settle the price of the property before the sale. The Subordinate Judge did not investigate into the value of the property as the sale was fixed for 14th August and he considered that the objection to valuation filed on 9th July 1929 could not be entertained. The Subordinate Judge passed a somewhat curious order on 26th July 1929. He said that if on the sale day bidders did not turn up by reason of the alleged wrong valuation of the properties he would consider if there was any reason for fresh sale proclamation. It is in accordance with the general trend of authorities that the Court should determine the value of the properties sought to be sold: See the case of Ban Behari Chatterji v. Bhukhan Lal Choudhury : AIR1933Cal511 . This is a gross irregularity and there was no justification for the Subordinate Judge to proceed to sell without determining the value of the properties sought to be sold and I would have had no hesitation in setting aside the sale if I was satisfied on the question that there was substantial injury.

5. Next point taken is that as no hour was stated for holding the sale on the adjourned date there was material irregularity. It cannot be doubted now that a non-specification of the hour would have a material effect in deterring intending bidders from attending the sale and that it is of the utmost importance that the hour of sale should be stated: See Bhikari Misra v. Suryya Moni (1902) 6 CWN 48. But it is said on behalf of the respondents that it has not been shown that the alleged inadequacy of price at the sale was the result of this irregularity. It is pointed out that there is no suggestion that other bidders would have come if the hour had been specified. It is not even suggested in evidence that anyone was likely to be prevented or was in fact prevented from coming to bid on account of non-specification of the hour. The learned Subordinate Judge has said:

It is beyond dream that such an omission could or did prejudice any bidder or any party interested.

6. There is no justification for this comment, but at the same time it is clear that there is no evidence in this case from which it can be legitimately inferred that the inadequacy of price was the result of this irregularity. On the other hand the bid sheet at p. 41 shows that there were two bidders from Ultadingi and Cossipore; one of them Jahari Lal bid up to Rs. 41,200, and the other Hari Gopal did bid up to Rs. 38,600, and they were present at the sale notwithstanding the non-specification of the hour of sale. The price fetched at the sale is not so grossly low that the necessary inference arises that the low price was the result of non-specification of the hour. There must be either direct evidence or evidence of circumstances which will warrant the necessary or at least reasonable inference that the inadequacy of price at the sale was the result of this irregularity: see Mahabir v. Dhanuk Dhari (1904) 31 Cal 815. The finding of the Subordinate Judge on the question of value has been challenged on both sides.

7. The appellant argues that the Court should have accepted the value given in the assessment register of the Calcutta Corporation which shows the present Municipal valuation to be Rs. 86,400 + Rs. 15,540=Rs. 1,01,940. Mr. Dutt on behalf of the respondent has contended strenuously that the new assessment register has been got up for the purposes of this ease. I am not prepared to accept this contention as no foundation was laid for it in the evidence in the Court below. The certified copy was produced in the Court below and it was accepted without objection. It is too late now to contend that the new re-valuation register should 'not be relied on and Mr. Dutt would ask us to proceed on the old valuation and sought to show that if the old valuation is accepted, allowing for deduction of Rs. 2,700 due to the Municipality for arrears of taxes, the value would come to about Rs. 72,186 and in this view there would be a difference of Rs. 3,000, which cannot be regarded as substantial injury. It seems to, me that the Subordinate Judge has proceeded on the right basis in basing the valuation on a more practical basis. He has taken the monthly rent of all the properties sold to be Rs. 593, and has allowed a deduction of l/7th on account of repairs, etc. and has valued the annual income of the 6/7th shares to be Rs. 4,896, and following the recent rule of the Improvement Trust he has valued the properties sold at Rs. 81,600. Mr. Dutt has sought to argue that this does not take into account the deduction of 19% for taxes. Mr. Bose for the appellant points out that the occupiers' share of the taxes is half of the 19% and is paid by the occupier. As no foundation was laid for this deduction on account of the taxes in the evidence I am not prepared to allow Mr. Dutt to raise this point, but taking the valuation of Rs. 81,600, as found by the Subordinate Judge one has to consider as to whether having regard to circumstances referred to by the Subordinate Judge the sum of Rs. 69,000 can be regarded as a fair price.

8. These circumstances are: (1) a Court sale always brings in something less than the actual price; (2) that the purchase was of an undivided share of the properties and the purchaser must keep a margin for the possible cost of the partition; (3) the mother of the appellant had set up a will of her husband and claimed the properties as Brahmottar properties. It is true that the mother's application for probate has been dismissed, but it was at any rate pending at the time of the sale; (4) the most valuable of the properties sold No. 6, Bhowanipur Road, had been vacant for three or four years. At the first blush it appeared to me that this was an accidental circumstance which could not bo relied on for the purpose of appraising the value of the properties sold, but on a due consideration I think that it is a factor which cannot altogether be neglected; (5) very big houses in Calcutta hardly find suitable buyers and No. 6, Bhowanipur Road, is a big one. It may be that if all these factors are taken into account the price may come down not exactly to Rs. 69,000, but about Rupees 74,000 or Rs. 75,000. It is difficult in these circumstances to say that there has been substantial injury, due regard being had to the fact that Court sales do not always fetch the actual price. For the grounds above mentioned I am of opinion that on the whole the Subordinate Judge has come to a correct conclusion and that this appeal must be dismissed. I would however allow no cost to the respondents as in my opinion there was at least one irregularity namely, in proceeding to the sale without the settlement of price in the sale proclamation. If the Subordinate Judge had not committed this irregularity it was possible that all these protracted proceedings would not have taken place.

M.C. Ghose, J.

9. I agree that this appeal should be dismissed. The learned advocate for the appellant has argued that there are certain irregularities in the sale complained of and in consequence the properties had been sold at an inadequate price. Upon hearing the learned advocates on both sides at great length I am clearly of opinion that the properties in this case have not been sold at an inadequate price. The price fetched at the sale was Rs. 69,000. The learned Subordinate Judge accepted the plaintiff's story that the monthly rental of the properties comes up to Rs. 593 and has calculated that the value would be about Rs. 81,600. I am of opinion that there is much force in the argument of the learned advocate for the respondents that the judgment-debtors' story about the monthly rental realised cannot be accepted as a true statement. Even however assuming it to be true the five factors dealt with by the learned Subordinate Judge in his judgment must be taken into account and further a reasonable purchaser would take into account the costs of repairs, the municipal rates, the costs of collection and deductions for vacancy and bad debts in purchasing a property for profit.

10. A substantial amount must be deducted on account of these items from the gross rent before a reasonable buyer can come to the net profits derivable from the property. Taking all these factors into account I am of opinion that Rs. 69,000, was not an inadequate price. I may also mention another factor in this connexion. While the appeal was being heard in this Court on the 10th instant it was suggested to the learned advocates on both sides that the parties should give up a ruinous litigation and settle the matters amicably whereupon the respondents decree-holders offered to give back the properties to the judgment-debtors if they would pay them Rs. 69,000, within a reasonable time say within two or three months. This offer was considered by the learned advocate for the appellant judgment-debtor and after four days' consideration the learned advocate had to admit that the judgment-debtors could not agree among themselves about the acceptance of this offer. This goes to show that the sum of Rs. 69,000 is not an inadequate price and there is no reasonable chance that if the sale be set aside or if the properties be sold by private treaty a greater sum will be obtained. I agree with the order proposed by my learned brother that the appeal should be dismissed. Having regard to the great irregularities in the sale there will be no orders as to costs.

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