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Nerode Chandra Mallik Vs. Official Trustee of Bengal, Trustee to the Estate of Manick Lal Mitra and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtKolkata
Decided On
Reported inAIR1938Cal798
AppellantNerode Chandra Mallik
RespondentOfficial Trustee of Bengal, Trustee to the Estate of Manick Lal Mitra and ors.
Cases ReferredNanhelal v. Umrao Singh
Excerpt:
- .....by the court.2. thereafter, the decree-holder filed an application for settling the terms of the sale proclamation under the provisions of order 21, rule 66 and notices were duly served upon ramendu roy. he appeared and filed an application on 21st january 1935 asking the court to determine on evidence the approximate value of the different proper. ties to be set out in the proclamation for sale, his case being that the value mentioned in the decree-holder's application was quite inadequate. on this application, the court recorded an order which is order no. 17 dated 26th january 1935. the sub-stance of this order is that the prayer of ramendu roy was rejected and the sale proclamation was ordered to be issued with the price mentioned in the decree-holder's-petition noted in it. on the.....
Judgment:

1. This appeal is on behalf of the decree-holder and is directed against an order of the learned Subordinate Judge, Second Court, Bakerganj, by which ha allowed an application filed by the Official Trustee of Bengal representing judgment-debtor 1 under the provisions of Order 21, Rule 90, Civil P.C. The decree-holder obtained a decree under Order 34, Rule 6 from this Court for Rs. 20,742 plus costs on 23rd August 1933. This decree was transferred for execution to the Court of the District Judge of Bakerganj and was eventually executed by the Subordinate Judge of that place. There are two sets of judgment-debtors, judgment-debtor 1, (being a minor) Manik Lal Mitter; and the second set consists of two persons, both, minors Samarendra Nath Mitter and Mukul Chandra Mitter, being the sons of Sourendra. It is admitted that in the properties which were put up to sale, Manik Lal had a third undivided share and the other two judgment-debtors had a sixth share. The properties which were attached in execution of this decree consisted of the share of the said judgment, debtors in 19 Kharija taluks and 5 tenures. The lots were however 48 in number, the shares of the two sets of judgment-debtors being specified in different lots. The original application for execution was against judgment-debtor 1 represented by his guardian Parul Sundari who was. his grandmother. Judgment-debtors 2 and 3 were however represented by a court guardian, Mr. Ajit Kumar Dey, a solicitor of this Court. A writ of attachment was issued on 18th April 1934 and the peon who is said to have effected the attachment filed his return of service in Court on 31st May 1934. After this, the decree-holder made an application to the Court on the allegation that one Ramendu Boy had been appointed, in a suit in Hughly in which the judgment-debtors were parties, a Receiver over the whole estate. The prayer in this application was that the receiver should be substituted in the place of the judgment-debtors in the pending execution proceedings. This prayer was allowed by the Court.

2. Thereafter, the decree-holder filed an application for settling the terms of the sale proclamation under the provisions of Order 21, Rule 66 and notices were duly served upon Ramendu Roy. He appeared and filed an application on 21st January 1935 asking the Court to determine on evidence the approximate value of the different proper. ties to be set out in the proclamation for sale, his case being that the value mentioned in the decree-holder's application was quite inadequate. On this application, the Court recorded an order which is Order No. 17 dated 26th January 1935. The sub-stance of this order is that the prayer of Ramendu Roy was rejected and the sale proclamation was ordered to be issued with the price mentioned in the decree-holder's-petition noted in it. On the same day, another order was passed fixing the 10th April as the date of the sale. Four days later, one Rajani Mohan Sircar filed a claim under Order 21, Rule 58, Civil P.C., in. respect of four of the attached properties and his claim was numbered as claim case No. 1 of 1935. It has been found by the learned Subordinate Judge and that finding has not been challenged before us that Rajani Mohan Sircar was a trusted officer and an Ammukhtar of Parul Sundari, grandmother of judgment-debtor 1, who in the suit in which the decree was passed and also up to a certain stage of the execution of the suit represented her minor grandson. As soon as this claim case was registered an application was made on behalf of the claimant for re-calling the-sale proclamation which had already been issued in pursuance of the Court's order dated 26th January 1935. The sale proclamation was recalled on 1st February 1935 and this fact was taken advantage of by. Ramendu Roy. He filed another application in which he again requested the-Court to determine the value of the respective lots by taking evidence of the value which was to be inserted in the sale proclamation which had to be issued later on because the sale proclamation which had already been issued had been then recalled. The Court fixed 16th February 1935 for considering this new application filed on behalf of the judgment-debtor but later on at the instance of the decree-holder the date of hearing was changed from 16th February to 5th February 1935. On that date the learned Subordinate Judge passed' an order in which he said that in the special circumstances of the case he would not accede to the judgment-debtor's prayer and would allow the value as stated by the decree-holder and as stated by Ramendu-Boy to appear side by side in the sale proclamation to be issued. He also directed that the said proclamation was not to go out of his office till 23rd February 1935 or until further orders. This order was passed at the time when claim case No. 1 of 1935 was still pending.

3. On 23rd February 1935, the decree-holder however made an application stating that it was not necessary at all to hold up the sale of the other lots because the claim case was then pending inasmuch as the claim of Rajani Mohan Sircar related only to four out of the 48 lots against which the decree-holder intended to proceed. The decree- holder accordingly prayed for the issue of the sale proclamation in respect of the 44 lots which were not the subject-matter of the claim. The Court acceded to that prayer and directed the sale proclamation to issue in respect of the said 44 lots of properties. Soon thereafter, claimant No. 1 did not appear in support of his claim and the claim case No. 1 of 1935 was dismissed for default on 9th March 1935. We have set out in some detail the proceedings of the Court up to this stage because these proceedings will have a very important bearing upon two of the questions raised before the learned Subordinate Judge and also before us, namely whether the process of attachment and the sale proclamation were suppressed at the instance or instigation of the decree-holder.

4. In the sale proclamation, the date for sale was fixed as 8th May 1935. On that date, two applications were made, one by Parul Sundari and the other by the Official Trustee. Parul Sundari informed the Court that the Official Trustee had been appointed as a trustee to the estate of her grandson and also had been made the receiver by the Subordinate Judge of Hooghly in the place of Ramendu Roy. In her application she for the first time set forth the case that a sum of Rs. 17,500 had been paid out of Court in reduction of the decretal claim to Mr. H. N. Dutt who was the solicitor of the decree-holder. But in the said application she did not mention the details of the said payment. The Official Trustee also made an application and in that application besides praying for substitution in the place of Ramendu Roy he stated that he had only been recently appointed as Receiver and he wanted at least a month's time to arrange for the payment of the decretal amount. The Court substituted the Official Trustee in the place of Ramendu Roy as Receiver to the estate of Rai Bahadur Iswan Chandra Mitter by Order No. 36. On the same day, by Order No. 35 the sale was adjourned to 1st June 1935 in the hope that the new Receiver, that is to say the Official Trustee, may in the meantime, try to pay the half of the dues of the decree-holder. As soon as the Official Trustee was substituted in the place of Mr. Ramendu Roy, the Court rejected the petition of Parul Sundari in which she alleged that Rs. 17,500 had been paid on behalf of the judgment-debtor, Mr. H. N. Dutt, on the ground that after the substitution she had no locus standi to maintain the said petition. On the day of the sale, namely 1st June 1935, the Official Trustee who was then representing all the judgment-debtors made an offer to pay on that day Rs. 4000 towards the decretal amount and wanted a postponement of the sale in order to enable him to pay the balance.

5. But this application was rejected and the sale papers were sent to the Nazir in order that the latter might hold the sale. On that date, the decree-holder himself purchased 30 out of 44 items but the judgment-debtors' pleader contended that the bid was insufficient and he himself proposed to bring bidders if the Court did not accept the bid and proposed a fresh sale. His prayer was acceded to and the decree-holder's bid was not accepted and the sale was held afresh on 4th June. On that day, two other bidders appeared. One of them is Satyendra Nath Roy and the other is Gopal Chandra Bhattacharjee. Of the several lots, Lots Nos. 1 and 25 were sold on 4th June 1935 and 37 other lots were sold on the next day. Some of the lots were purchased by Satyendra Nath Roy and the rest by Gopal Chandra Bhattacharjee the decree-holder not offering any bid. The total amount offered by these two gentlemen was Rs. 22,500. The details of the prices offered by these persons respectively are mentioned in the bid sheets which is printed at p. 84, part 1 of the paper-book. It is unnecessary for us to mention these details. The highest bids offered by these gentlemen were accepted by the Court on 5th June 1935 and they were declared purchasers. Two applications were there-after filed by the Official Trustee; the first one was headed as an application under Order 21, Rule 90 and was filed on 3rd July 1935. The application however was not a verified one. The grounds for reversal of the sale are just the usual grounds which are to be found in such applications. There was however another ground which was special in this case, namely ground No. 5 in which it was alleged that the two auction-purchasers were really the men of the ex-Receiver Ramendu Roy who it was stated had colluded with the decree-holder and had managed to purchase the properties in the name of Satyendra Nath Roy and Gopal Chandra Bhattacharjee who were really the benamidars for the other set of judgment-debtors, namely the heirs of Surendra.

6. Another application was filed by the Official Trustee on the next day, namely 4th July 1935. It is an application headed as an application under Section 47 and Section 151 and Order 21, Rule 90, Civil P.C. It is very difficult to follow why Section 151 of the Code was invoked in aid of this application. The grounds which would bring the application under Order 21, Rule 90, Civil P. C, are amplified in this application for whereas in the first application of 3rd July there were only 6 grounds, in this application there are as many as 18 grounds which, if established, would support the application under Order 21, Rule 90 and the 19th, the last ground, was a new ground added and that ground is worded thus:

For the learned Judge was wrong in not giving this applicant credit for Rs. 17,500 stated to have been paid under the decree.

7. It is for this ground that Section 47 was mentioned in the heading of this application. Before the learned Subordinate Judge this last-mentioned ground was pressed but the learned Judge has, and in our judgment rightly, refused to enter into the question as to whether in fact Rs. 17,500 had been paid by the judgment-debtors to the decree-holder out of Court or not, because admittedly that payment was not certified in Court and even according to the judgment-debtors' case that payment, if made, had admittedly been made beyond 90 days of 4th July 1935; for, we find in Parul Sundari's application which was filed on 8bh May 1935 that this case of the payment of the identical sum of Rs. 17,500 was made. As we have stated, the learned Subordinate Judge was quite right in not entertaining that ground as a ground of objection under Section 47, Civil P.C., inasmuch as an application for certification had not admittedly been made within three months of the alleged payments. We do not pro. pose to enter into the merits of this controversy as to whether the said sum had in fact been paid as alleged by the judgment-debtors. That question accordingly is left open. The other points which appear to have been pressed before the learned Subordinate Judge on behalf of the Official Trustee are the following:

(1) That the process of attachment was suppressed and the properties had not in fact been attached; (2) that the sale proclamation had not been published in accordance with law, the peon not having gone to the locality at all; (3) that there was material irregularity in conducting the sale inasmuch as both the valuations stated by the decree-holder and by the judgment-debtors respectively were inserted in the proclamation for sale, and (4) that by reason of fraud in publishing the sale and the irregularity mentioned above, the properties had been sold at a gross under-value.

8. In order that a sale may be reversed, three essential elements must be established by the judgment-debtors. (1) That there was either fraud or irregularity or both in publishing or in conducting the sale. (2) That the price fetched at the sale is inadequate, and (3) that inadequacy of the price must be connected directly with the fraud or irregularity complained of and established. The learned Subordinate Judge has found that the fact that the valuation as given by the decree-holder and judgment-debtors was set out in the sale proclamation was not a material irregularity for which the sale could be reversed (and his finding is quite definite on the point inasmuch as at the time when the question of settlement of the terms of the sale proclamation was under consideration of the Court, the suggestion came from the judgment-debtors' side that both the valuations should be inserted in the sale proclamation). He has however found that though the serving peon had gone to the locality to serve the process of attachment and the sale proclamation accompanied by the identifier, the service had not been proved to the satisfaction of the Court for grounds which we will hereafter state. But at this stage, we may at once state that those reasons of the learned Subordinate Judge do not appeal to us at all.

9. With regard to the last mentioned question, namely as to whether Rs. 22,500 was a fair price for the property sold, the learned Judge did not accept the evidence led on behalf of the judgment-debtors, and that evidence is entirely oral evidence, that the properties were worth rupees two or three lacs. He accepted the documents, Ex. 1 series, which were district registers of tenures and came to the conclusion that the net income of all the properties sold was Rs. 3009 a year. He also came to the conclusion that at the time of the sale Rs. 8824 was the amount of the arrears of revenue. The finding comes to this, that for the properties encumbered to the extent of Rs. 8824, because the arrears of revenue constitute a paramount charge, the auction-purchasers had paid Rs. 22,500. On this basis, he rightly calculated that the auction-purchaser would be in a position to have the properties in a free state by paying in Court and to the Collector the sum of about Rs. 31,000 being made up of Rs. 22,500, being the price which they paid at the execution sale, and Rs. 8824, being the arrears of revenue which they would have to deposit with the Collector. Accordingly on this calculation the properties were purchased at the auction sale at about 10 years' purchase. The learned Subordinate Judge then took up the question as to whether these properties could be sold at more than 10 years' purchase. He does not record a definite finding on that point but comes to the conclusion that even 10 years' purchase appears to be inadequate. Then follows a very loose expression, namely that inasmuch as the price fetched at the sale was inadequate and the minor judgment-debtors has sustained injury, the sale was to be set aside on equitable grounds. We do not quite follow the last-mentioned principle laid by the learned Subordinate Judge. It can only be set aside if the ground mentioned in Rules 89, 90 or Rule 91 of Order 21, be established as the case may be. If no such application is made, the Court has no option but to confirm the sale : see Birj Mohun v. Rai Umanath (1893) 20 Cal 8. If any such application is made and the ground mentioned in those Rules be not established, the onus being on him who applies for reversal of the sale, the Court has no option but to confirm the sale under Order 21, Rule 92: Nanhelal v. Umrao Singh . In this matter, we do not think that there is any scope for application of what the learned Subordinate Judge has stated to be ' equitable grounds'. If by the words 'equitable grounds', it is meant that there is hardship on the infant judgment-debtors, we do not see how if no fraud or irregularity is established, such a ground would give the Court jurisdiction to set aside the sale. On this part of the case therefore the following questions are pertinent, namely whether Rs. 3009 is the net income of all the properties which were purchased between the two auction-purchasers and whether 10 years' purchase would be a proper standard to go upon. A suggestion was made on behalf of the Official Trustee that Rs. 3009 represented the income of Manik Lal's share only and not the additional sixth share which belonged to the other judgment-debtors. The learned Subordinate Judge has clearly recorded his finding at page 201, lines 17 to 20, part 1 of the paper-book, that Rs. 3009 represented the net income of all the properties sold and he mentions in this connexion the sum of Rs. 22,500 which represented the sum total of the bids in respect of all the properties purchased between the two auction purchasers. Nothing has been shown to us by the learned advocate for the respondent that this finding that Rs. 3009 represented the net income of all the properties which were purchased at Rs. 22,500 is a wrong, finding. We therefore accept the learned Subordinate Judge's finding relating to the net income of the properties.

10. The next question is whether 10 years' purchase ought to be taken as the basis for arriving at the fair market price. As we have stated in the earlier part of our judgment, the 44 lots which were advertised for sale consisted of undivided shares of the two sets of judgment-debtors in a number of Kharija taluks, 18 or so, and the remaining lots consisted of undivided shares in tenures. For the Kharija taluks, them were arrears of revenue and the amount was fairly a heavy one, namely Rs. 8824. Each of the items of properties sold and purchased by the auction-purchasers consisted of undivided shares. Most of the properties were properties situate on an island in the Bay of Bengal and the evidence establishes conclusively that there has been since 1935 large diluvion. In fact, in 1936 shortly before the sale, the judgment-debtors filed' a petition before the Collector of Bakerganj. for reduction of cess on the ground that large portions of two of the Kharija taluks, namely touji Nos. 1730 and 1745, have gone into the bed of the sea. On that application a report was called for by the Collector from the Government Kanunga who reported that at least from March 1935 about half the area had gone under the sea. This report is Ex. K. (page 21, part 2; of the paper-book) and on the basis of this report which was submitted after due enquiry, the Collector reduced the cesses proportionately. That was the character of the property sold. The evidence further establishes the fact that there is at all times a reasonable apprehension of diluvion. There is also the evidence coming from the side of the judgment-debtors that since 1931 price of properties had gone down owing to depression. Under the circumstances, we are to see if 10 years' purchase is a proper standard or not keeping in view at the same time that the properties were being purchased not by private treaty but at Court sales where a purchaser always takes into account the costs which he may have to incur in resisting applications under Order 21, Rule 90, Civil P.C., which applications are filed almost as a matter of course by judgment-debtors.

11. The evidence as to the value given by the judgment-debtor consists entirely of oral evidence. The first witness examined is witness 1, a clerk of the Official Trustee. He comes and states on oath that the proper. ties sold would be worth two lacs of rupees. That is his opinion, but we do not see how he is competent to give an opinion on such a matter. His own occupation is clerical service under the Official Trustee. He does not know anything about properties in the district of Bakerganj, his place of service apparently being Calcutta. According to him, the Official Trustee had only taken charge of the estate on 14th May 1935 and that if it be so, it is a remarkable thing that a person of this type acquired expert know ledge of the value of properties situate in the district of Bakerganj within such a short time. This evidence, in our opinion, is absolutely worthless. The witness moreover does not give the basis on which he formed his opinion that the properties were worth two lacs of rupees. After this worthless evidence was led, another set of witnesses were put in the witness-box on behalf of the Official Trustee.

12. The first set of witnesses were cultivators and they came out and stated that Hakiats were sold at 15 to 20 years' purchase. All these witnesses admit that they are small men and they had never any chance of purchasing taluks. One witness comes and poses himself to be a talukdar. He is plaintiff's witness No. 19. He had no connexion with the estate and still he would state that the net income of the properties sold would be about Rs. 10,000 a year. The judgment-debtors had occasion to examine as a witness on their behalf, a person who was in charge for some time of the collections but it is remarkable that no question to ascertain the income of the estate was put to him by the judgment-debtors' pleader but that question was reserved for witness No. 19 who was not in a position to know the collections of the estate. He also says that the land is sold at 20 or 25 times the munafa.

13. Another witness, Abdul Gani Khan, wit-ness 12 for the petitioner, says that he is a talukdar and that properties of this nature are sold at 20 or 25 times the profit, and Kharija taluks are sold even at higher prices. He says further that if he knew of the impending sale, he would have offered bids. His cross-examination shows that he is not a man of such means who could have offered bids. The whole effect of his evidence is taken away by his admission made in his examination-in-chief that at the time of his deposition he would not have purchased the properties at 20 times the munafa. This is the character of the oral evidence produced on behalf of the judgment-debtors and we have no hesitation in rejecting the same. On the other hand, we have an admission in a petition filed by Ramendu Roy on 31st January 1935 (p. 64, part 1 of the paper-book) where he takes 10 years' purchase as the basis of his Calculations for arriving at the value of the properties.

14. In the circumstances, we reverse the finding of the learned Subordinate Judge that 10 years' purchase was inadequate. We hold that the price paid by the auction-purchasers is a fair one in the circumstances. This finding of ours renders unnecessary the consideration of the other points, namely as to whether there was fraud or irregularity. We however record our findings on these points without entering into great details.

15. The fact that two sets of valuation had been given in the sale proclamation cannot be taken advantage of by the judgment-debtors in view of the finding of the learned Subordinate Judge that it was at the instance of the judgment-debtors that the sale proclamation was published in that manner and in view of the new Sub-section (2) added to the provisions of Order 21, Rule 90, Civil P.C., in the year 1933. With regard to the case that the attachment was not served, besides the evidence of the identifier, the peon and the peon's report, we have the evidence of some mokabela witnesses. These mokabela witnesses proved the service of the processes on some of the properties in suit. The decree-holder had cited others but owing to the fact that there was a storm in the Bay they could not reach the Court on 13th'June 1936, and the decree-holder could not tender their evidence. They had to cross the sea and a river about 14 miles broad. The decree-holder asked for some time from the Court to enable him to examine these witnesses but that prayer was refused. On the side of the judgment-debtors, some witnesses have been examined to prove the negative. But there are two facts which would lead us to the inference that the set of witnesses examined on behalf of the decree-holder, though few in number, is far more reliable than the set of witnesses examined on behalf of the judgment-debtors. The first fact to be taken into consideration is that the different steps in Court were being taken by the decree-holder in the presence of the judgment-debtors, they appearing actually in Court through pleaders on such dates. It would be difficult in the circumstances to make a successful attempt to suppress processes and no decree-holder in these circumstances would ordinarily attempt to do so. The second fact is the fact that Rajani Mohan Sirkar, an Officer and Ammuktear of Parul Sundari, did file a claim admitting the attachment. This is a strong fact which goes to support the case that process of attachment had in fact been served.

16. Regarding the publication of the sale proclamation on the spot the observations which we have just made will equally apply. The time taken by the peon to serve was nearly a month. The sale notice was published in the local newspaper and also in the Calcutta Gazette. The finding of the learned Judge is that the identifier and the peon had in fact left Barisal and there was service at least on some of the lots in question. The reason he gives is that the service was not proved because the identifier could not name the persons who gave him indications about the location of the villages on which the sale proclamation was to be served. The properties were large in number. 46 copies of sale proclamation were issued showing that the sale proclamation had to be served in 45 places at least. If the identifier does not remember the names of those persons who gave him directions about the way, that is not a thing which would entitle a Court to disbelieve the case of the decree-holder, specially when it finds that the peon and the identifier had actually crossed over the broad river and the arm of the sea and had in fact served the proclamation of sale on some of the properties. The length of time that the peon was out would be in this connexion a material factor for consideration. He was out for about 26 days. We accordingly; hold that both the processes of attachment and the sale proclamation were actually served in the locality and there was no fraud or irregularity in publishing or conducting the sale.

17. It is stated to us that after the reversal of the sale by the learned Subordinate Judge, the decree-holder was directed to refund the money, which he had drawn, to the auction-purchasers. It is further stated to us that in accordance with those directions the decree-holder has paid back the money to the auction-purchasers. Inasmuch as we have confirmed the sale, the decree-holder is entitled to the proceeds of the sale. If the moneys have been received back by the auction-purchasers, the Court below will call upon the auction-purchasers to deposit the same in Court and after the moneys are so deposited, they are to be paid over to the decree-holder subject to just deductions. The result is that this appeal is allowed, the order of the learned Subordinate Judge is set aside and the sale confirmed. We have given our anxious consideration to the question of costs and after considering all aspects of the matter, we think the proper order in this respect would be to give the whole of the costs of the lower Court to the decree-holder. So far as the costs of this Court are concerned, our direction is that the decree-holder appellant would be entitled to all other costs of this appeal except that he will be entitled to a third of the costs of the paper-book. We assess the hearing fee of this appeal at five gold mohurs.


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