1. This is a Reference made to a Full Bench by a Bench of this Court in a Second Appeal.
2. The facts giving rise to the litigation may be shortly stated as follows. On March 13, 1931, one Sarkar purchased a hundred bighas of land from one Karuna Nidhan Singha. Apparently there were errors in the deed of sale and on October 13, 193.1, a deed of rectification was entered into between the parties in which these errors were corrected.
3. On September 5, 1932, Sarkar executed an agreement for the sale of this land to the plaintiff appellants, Messrs. B. N. Elias & Co. Ltd., for a sum of Rs. 17,500/-. A sum of Rs. 8,500/- was paid in advance as part payment of the purchase price.
4. From this agreement it is clear that Messrs. B. N. Elias & Co. wanted vacant possession, but it appears that Sarkar could not give them vacant possession. As a result the parties entered into another agreement on August 1, 1938 which is referred to as a deed of covenant. This deed recites that Sarkar was not able to carry out the terms of the earlier agreement and therefore he agreed in lieu of the agreement of sale to hold the lands which were the subject-matter of the agreement as agent of B. N. Elias & Co. Ltd. He further agreed to make every effort to acquire all outstanding interests in these lands and further to acquire other properties for B. N. Elias & Co. Ltd. Sarkar agreed Jo execute all necessary documents showing that the land was held on behalf of B. N. Elias & Co. Ltd.
5. It appears that on January 21, 1937, the defendant respondent Haridas Saha obtained a decree in the Small Cause Court against Sarkar. This decree was transferred for execution and on December 17, 1940, the property which was the subject-matter of the original agreement of sale was attached.
6. On January 18, 1941, Messrs. B. N. Elias & Co. Ltd., preferred a claim under Dr. 21 Rule 58 of the Code of Civil Procedure. They contended that this property was not liable to be attached and sold at the instance of Saha on the ground that Sarkar held the property as agent for them and that he really had no interest in the property. In the alternative Messrs. B. N. Elias & Co. Ltd, contended that if contrary to their first contention the property was ordered to be sold, it should be directed to be sold subject to a declaration of charge for Rs. 17,500/- in their favour.
7. On March 26, 1941, a Munsif dismissed the claim and ordered that the property should be sold subject to a charge in favour of Messrs. B. N. Elias & Co. Ltd., for Rs. 16,100/- which was the amount he found to have been paid by Messrs. B. N. Elias & Co. Ltd., to Sarkar in part payment of the purchase price. On April 15, 1941 the sale took place and the land was purchased by the decree-holder, the defendant respondent Saha. On June 18, 1941, the sale was confirmed.
8. On July 31, 1941, Sarkar executed a deed' of sale or a conveyance of the hundred bighas which was the subject-matter of the earlier agreement of sale in favour of Messrs. B. N. Elias & Co. Ltd.
9. On August 18, 1941, Messrs. B. N. Elias & Co. Ltd., instituted the present suit under the provisions of Order 21, Rule 63 of the Code of Civil Procedure, and they asked for a declaration that the property in question belonged to the company and could not be attached or sold in execution of the decree held by the defendant respondent, Saha, against Sarkar.
10. The case eventually came before a learned Subordinate Judge who made a decree in favour of the plaintiffs, Messrs. B. N. Elias & Co. Ltd. The learned Subordinate Judge held (1) that the plaintiffs had a good title as a result of the conveyance as this conveyance was based upon the agreement of sale which was prior in time to the attachment in execution by the de-dendant-respondent Saha. In short he held that the plaintiffs' title was not affected by this execution sale. He further found that the whole of the purchase money had been paid by Messrs. B. N. Elias & Co. Ltd., to Sarkar before attachment and further that at the date of the attachment Messrs. B. N. Elias & Co. Ltd., were actually in possession of the property; (2) that as a result of the deed of covenant, to which I have already made reference, Sarkar had at the date of the attachment no beneficial interest in the property at all and that he was merely holding it as an agent or a kind of benamdar for Messrs. B. N. Elias & Co. Ltd.
11. The defendant respondent appealed to the Court of the District Judge. The learned District Judge eventually allowed the appeal, set aside the decree of the learned Subordinate Judge & dismissed the plaintiffs' suit in its entirety. The findings of the learned District Judge were:
1. That the plaintiffs were estopped from bringing the suit as they had taken advantage of the order which had been made in the proceedings under Order 21, Rule 58 of the Code of Civil Procedure. In those proceedings the appellants had contended that the property was theirs and could not be attached and sold in execution of the decree against Sarkar. They had in the alternative contended that if their first contention was not accepted, the property would have to be sold subject to a charge in their favour. The property was sold subject to the charge and therefore the learned District Judge held that the plaintiffs were estopped.
2. That the whole consideration money namely Rs. 17,500/-, had not been paid by the plaintiff appellants to Sarkar . According to the learned District Judge only Rs. 8,500/- had been paid towards the purchase price and further at the date of the attachment Sarkar and not the plaintiff appellants were in possession of the property.
3. That the so-called deed of covenant superseded the agreement of sale and the latter was to be regarded as dead and of no effect after the execution of the said deed of covenant. Further, the learned District Judge held that Sarkar was not holding the land in suit on behalf of Messrs. B. N. Elias & Co. Ltd., but by the terms of the deed of covenant he had agreed to hold other lands to be acquired in the future on behalf of Messrs. B. N. Elias & Co. Ltd.
12. As a result of these findings the learned District Judge was of opinion that at the date of attachment there was no agreement of sale in favour of Messrs. B. N. Elias & Co. Ltd., and therefore no question of priority could arise.
13. The plaintiff appellants preferred this Second Appeal and during the course of the hearing it was suggested by learned Counsel for the plaintiffs that the case might involve the question as to whether Messrs. B. N. Elias & Co. Ltd., though they received the conveyance or deed of sale after the execution sale, had a right to the property by reason of the fact that the conveyance was made in pursuance of the agreement of sale which was entered into before the attachment in the execution case.. It seems to have been pointed out to the Division Bench that in the case of 'MADAN MOHAN v. Rebati Mohan', 21 Cal. W. N. 158 it was held that if the purchase and conveyance was in pursuance of an agreement for sale made before the attachment in execution and the execution sale, the title of the vendee under the agreement of sale and the subsequent conveyance would prevail over that of the execution purchaser. It was suggested that a contrary view had been taken in 'TARAKNATH v. Sanat Kumar,' 57 Cal. 274 and that being so the Bench were of opinion that this conflict could only be decided by a reference to a Full Bench.
14. Mr. Atul Gupta who has appeared on behalf of the appellants contended that this Reference to the Full Bench was not in accordance with the Rules of this Court. The Rules relating to reference to Full Benches are contained in Chap. 7 of the Rules of the Appellate Side of this Court and the relevant rules are Nos. 1 and 2, which are as follows:
'1. Whenever one Division Court shall differ from any other Division Court upon a point of law or usage having the force of law, me case shall be referred for decision by a Full Bench.
2. If the question arise in an Appeal from an Appellate Decree, the Court referring the case shall state the point or points upon which they differ from the decision of a former Division Court and shall refer the Appeal for the final decision of a Full Bench.'
15. It was contended that in this case the point or points upon which the Bench differed from an earlier decision were not stated and the Bench expressed no opinion whatsoever upon the question. It seems to me however that where there is a conflict of decisions the Bench referring obviously must differ from one of the Bench decisions, and though in this case the specific points upon which they differed were not stated, it is quite clear from the referring order that they would have to differ from one or other of these cases and therefore they had no alternative but to refer the case to a Full Bench.
16. I do not think that any point can be taken as to the form of the referring order, but it appears to me that the case could not be referred to the Full Bench without first considering the findings of the two Courts below. Mr. Atul Gupta has urged that this conflict of judicial authority can only arise if the Bench hearing the case differed from and reversed the learned District Judge on at least two important questions.
17. In the first place the learned District Judge held that the plaintiffs were estopped from bringing the suit and clearly if they were estopped no question of priority could ever arise. The Bench however referred the case without considering this matter at all.
18. In the second place the District Judge had held that the agreement of sale had been wholly superseded by the so-called deed of covenant and that it had ceased to have any effect whatsoever. If that were so, the rights of the parties would at the date of the attachment have been governed not by the agreement of sale, but by this so-called deed of covenant, and according to the learned District Judge the effect of this deed of covenant was that Sarkar was no longer holding the land in suit on behalf of the plaintiff-appellants, but he had agreed to hold land to be subsequently acquired on behalf of the plaintiff-appellants. The learned District Judge appears to have found that at the date of the attachment the plaintiffs-appellants had no interest in the land attached. If that finding stands then quite obviously no question of priority can ever arise.
19. The question of priority could only arise if there was in existence a valid agreement of sale at the time the property was attached and if there was no such agreement in existence, then the cases referred to by the Bench which were said to be in conflict would not be relevant in any way. The conflict, if any, between these cases would only require to be resolved if the question of priority was a matter which had to be decided and that matter would only have to be decided if the principal findings of the learned District Judge were set. aside.
20. Further, it appears to me that if the judgment of the learned District Judge were set aside, this question of priority might never arise. The learned Subordinate Judge had held that Sarkar was holding the property on behalf of Messrs. B. N. Elias & Co. Ltd. & that at the date of the attachment Messrs. B. N. Elias & Co. Ltd. were really in possession and not. Sarkar. If that finding were upheld it might well be that the question of priority could not. arise.
21. It appears to me that in the circumstances the Bench should not have referred this case to a Full Bench. Reference should only be made when a point of law which is vital to the decision of the case must be decided. If the case can be disposed of without a decision on that question of law or without deciding some conflict between Division Benches, there is no need to refer the matter. The point in such a case becomes a purely hypothetical one and reference should not be made to a Full Bench to decide hypothetical points of law which are unnecessary for the decision of the case. It is only in certain circumstances that the question as to which of the two Bench decisions referred to by the Bench is rightly decided can arise,, and it appears to me that the matter should not have been referred to a Full Bench until the referring Bench had considered whether the point could arise at all in this case.
22. It is true that when a Second Appeal is referred to a Full Bench for a decision the Full Bench can and must decide the whole appeal. But it appears to me that a Full Bench should not be called upon to decide an appeal where the point upon which the reference is made is one that might never arise at all. The time of Full Benches should not be taken by deciding questions which may turn out to be of little or no importance at all to anyone except the parties in the case. That being so it appears to us that we should remit this case to a Division Bench to be heard. That Bench should consider the findings of the Courts below and arrive at its conclusions. As I have said,, the result may well be that the point of law which is said to be of difficulty and which has been sought to be referred to the Full Bench might never arise. On the other hand, if the conclusion of the Bench hearing the Second Appeal is such that the case must be decided eventually on this matter of priority,, then and then only should the matter be referred to a Full Bench.
23. In the result therefore we send this-case back to a Division Bench to be re-heards in accordance with the observations made in this judgment and in accordance with law.
24. The parties when ready will mention the case to the Chief Justice when a Bench will be constituted to hear the appeal.
G.N. Das, J.
25. I agree.
26. I agree.