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Abul Jamil Samsul Hamid Chowdhury Vs. Ambia Khatun W/O Amatali Bepari and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Reported inAIR1939Cal663
AppellantAbul Jamil Samsul Hamid Chowdhury
RespondentAmbia Khatun W/O Amatali Bepari and ors.
Cases ReferredSaadatmand Khan v. Phul
Excerpt:
- .....suppression of the processes and for irregularities connected with the publication, of the sale. her application was rejected by the trial court. she then appealed and her appeal was heard in due course by the learned additional judge who reversed the decision of the trial court and set aside the sale. it may be mentioned that there was some discussion in the courts below on the question whether the sale with which we are dealing was one under the bengal tenancy act or under the provisions of the code of civil procedure. it is, however, now admitted that, in view of the circumstances of the case, it must be treated as a sale under the provisions of the code of civil procedure and that the application to set aside the sale will be governed by order 21, rule 90 of the code. it is.....
Judgment:
ORDER

Edgley, J.

1. This rule is directed against the order of Mr. S.K. Ganguly, Additional District Judge of Bakarganj, dated 5th August 1938, under which he set aside a Civil Court sale which had been held on 17th December 1934. Some two and a half years after the date of the sale, opposite party No. 1 in this case applied to have the sale set aside on the ground of fraudulent suppression of the processes and for irregularities connected with the publication, of the sale. Her application was rejected by the trial Court. She then appealed and her appeal was heard in due course by the learned Additional Judge who reversed the decision of the trial Court and set aside the sale. It may be mentioned that there was some discussion in the Courts below on the question whether the sale with which we are dealing was one under the Bengal Tenancy Act or under the provisions of the Code of Civil Procedure. It is, however, now admitted that, in view of the circumstances of the case, it must be treated as a sale under the provisions of the Code of Civil Procedure and that the application to set aside the sale will be governed by Order 21, Rule 90 of the Code. It is further admitted that, as the application to set aside the sale was filed on 5th July 1937 while the sale was held on 17th December 1934, the judgment-debtor's application mast be treated as time-barred unless she can get the benefit of Section 18, Limitation Act.

2. The general line of reasoning adopted by the learned Additional Judge is somewhat obscure. He found, however, that two plots of the judgment-debtors' property were valued respectively in the sale proclamation at Rs. 10 and Rs. 40 and were sold for Rs. 10 and Rs. 70. He also appears to have been of the opinion that the proper value of this property was at least Rs. 2100 and he held that the fact of this under valuation amounted to clear evidence of fraud on the part of the decree-holder. He was therefore of opinion that the onus lay on the decree-holder to show that opposite party 1 was not entitled to the benefit of Section 18, Limitation Act. The whole of his subsequent discussion of the evidence appears to have been coloured by this opinion and he failed to consider the question as to whether the initial onus to prove fraudulent concealment lay upon opposite party 1. In view of the findings contained in the judgment of the learned Additional District Judge, to which reference has been made above, it appears that he proceeds on the assumption that, in a case in which there is evidence of fraud in connexion with the valuation of the property sold, a judgment-debtor, who applies after the prescribed period of limitation to have the sale set aside, becomes automatically entitled to a presumption to the effect that owing to fraud on the part of the decree, holder, he has been kept from the knowledge of his right to file an application to have the sale set aside, and that the onus will lie entirely upon the decree, holder to rebut this presumption. In my opinion this assumption is erroneous. Section 18, Limitation Act, provides that:

Where any person having a right to institute a suit or make an application has, by means of fraud, been kept from the knowledge of such right or of the title on which it is founded...the time limited for instituting a suit or making an application against the person guilty of the fraud or accessory thereto...shall be computed from the time when the fraud first became known to the person injuriously affected thereby....

3. It follows therefore from the clear language of the Section that a person, who makes an application after the ordinary statutory period of limitation, must prove that he has been kept from the knowledge of his right to make the application by the fraud of the person against whom the application is directed. In other words, the initial onus lies upon him to prove the requisite element of fraudulent concealment. In a case therefore in which an applicant is seeking under Order 21, Rule 90, Civil P.C., to set aside a Civil Court sale, if his application has been filed more than 30 days after the date of the sale, he will have to prove fraudulent concealment on the part; of the decree-holder or such other person against whom his application may be directed. If by doing so he establishes his right to file a time-barred application, it will then be for him to prove fraud or irregularity in publishing or conducting the sale, within the meaning of Order 21, Rule 90, Civil P.C., sufficient to enable him to have the sale set aside under that Rule. In support of the view which has been taken by the learned Additional Judge in this matter, reliance is placed by the learned advocate for the opposite party on certain observations made by the Judicial Committee of the Privy Council in Rahimbhoy Habibbhoy v. Charles Agnew Turner (1893) 17 Bom 341. That case related to a suit brought in 1887 by the Official Assignee in respect of some property which, according to the allegations in the plaint, had been fraudulently transferred in 1867 by an insolvent to his brother, Rahimbhoy Habibbhoy. Their Lordships held that the transfer was a voluntary one and bad against the creditors, and, further, that it was committed in pursuance of fraud and was concealed from the creditors. They also held

that it was a fraud which prevented the assignee from having knowledge of his right to recover the assets, and therefore falls within Section 18, Limitation Act, 16 of 1877, which directs that in such a case the time for instituting an action shall be computed from the time when the fraud first became known to the person injuriously affected thereby.

4. Lord Hobhouse, who delivered the judgment in the case, then went on to discuss the question as to the date when the Official Assignee obtained knowledge of the fraud and, in this connexion, His Lordship made the following observations:

Their Lordships consider that when a man has committed a fraud, and has got property thereby, it is for him to show that the person injured by his fraud and suing to recover the property has had clear and definite knowledge of those facts which constitute the fraud, at a time which is too remote to allow him to bring the suit. That is attempted in the present case.

5. On the point as to the time when know, ledge of the fraud came to the knowledga of the Official Assignee, there was a finding to the effect that certain clues and hints reached him in 1881 which possibly, if followed up, might have led to a complete knowledge of the fraud, but with regard to this matter Lord Hobhouse observed:

Their Lordships cannot consider that this is such knowledge on the part of the assignee as would deprive him of the benefit of Section 18, Limitation Act. They therefore consider that the action is brought in good time, being brought within two years after the real knowledge came to the mind of the assignee.

6. It is significant that in the case cited above their Lordships of the Judicial Committee first came to a finding to the effect that fraud had actually been committed which prevented the assignee from having knowledge of his right to recover the assets and that their subsequent observations with regard to the question of the onus which lay upon the party who had committed the fraud related to the question as to the time when the fraud actually came to the knowledge of the assignee. As I understand the principles which may be deduced from the decision of the Judicial Committee in Rahimbhoy Habibbhoy v. Charles Agnew Turner (1893) 17 Bom 341, they are to the effect that, in a case such as that with which their Lordships were dealing, it must first be established by the plaintiff that there was fraudulent concealment on the part of the defendant. With regard to this point the onus would lie on the plaintiff. When once the fraudulent concealment has been established, the question would then have to be examined as to the time when this particular fraud became known to the plaintiff. With reference to the second point the onus would lie on the person responsible for the fraudulent concealment to show that, in spite of this fraud, the facts relating thereto had become known to the plain, tiff before the alleged date of knowledge at a time too remote to allow him to bring the suit. The correct legal position in this matter has been very clearly summarized by Mookerjee J. in Biman Chandra v. Promatha nath 91922) 9 A.I.R. Cal 157 as follows:

The true position then is that where a suit is on the face of it barred, it is for the plaintiff to prove in the first instance the circumstances which would prevent the statute from having its ordinary effect. A person who in such circumstances desires to invoke the aid of Section 18 must establish that there has been fraud and that by means of such fraud he has been kept from the knowledge of his right to suit or of the title whereon it is founded Once this is established the burden is shifted on to the other side to show that the plaintiff had knowledge of the transaction beyond the period of limitation. Such knowledge must be clear and definite knowledge of the facts constituting the particular fraud; as Lord Hobhouse points out, it is not sufficient for the defendant to show that the plaintiff had some clues and hints which perhaps, if vigorously and acutely followed up, might have led to a complete knowledge of the fraud.

7. It therefore follows that when a judgment- debtor files a time-barred application to set aside a Civil Court sale and seeks to invoke the aid of Section 18, Limitation Act, the initial onus will lie very heavily upon him to show that by reason of fraudulent concealment, on the part of the person against whom he has made the application he has been kept from the knowledge of his right to file the application. In the matter with which we are now dealing therefore it is not merely necessary to show that: fraud has been committed in order to enable the judgment-debtor to get the benefit of Section 18, Limitation Act, but the element of fraudulent concealment requires to be established. From this point of view, in my opinion, it certainly cannot be said that mere under valuation of property in the sale proclamation can possibly amount to the fraudulent concealment which is required under Section 18, Limitation Act. It is a matter which along with other matters may be considered but in order to establish fraudulent concealment it would be necessary to show that through the fraudulent conduct of the decree, holder or such other person against whom the application has been directed the judgment-debtor had been prevented from having any know, ledge of the sale proclamation or the fact that a sale had actually taken place. In other words, as stated by Das J. in Bajrang Prasad v. Mt. Sonejhari Kuer (1925) 12 A.I.R. Pat. 521:

In order to succeed the judgment-debtor must establish that there was some contrivance on the part of the decree-holder by which the judgment, debtor was kept from the knowledge of her right to apply under Order 21, Rule 90 of the Code. It is in my opinion not sufficient to say that as there was fraud in the conduct of the sale therefore it must follow that there was a contrivance on the part of the decree-holder to keep the judgment-debtor from the knowledge of the fraudulent sale.

8. This is also the view which seems to have been taken by Sir Lawrence Jenkins C.J. in Narayan Sahu v. Damodar Das (1912) 16 C.W.N. 894. In that case his Lordship observed that

the misstatement of the value in the execution petition is described as a 'fraud and irregularity;' irregularity it may have been; and even assuming for the sake of argument that it was a fraud, still it does not constitute the fraudulent concealment necessary to save limitation. Even the non-publication of the sale proclamation in the mufassil exposed the sale to attack at the instance of the judgment-debtor, it is not shown that he has by means of fraud of which the decree-holder was guilty or to which he was accessory, been kept from the knowledge of his right.

9. A similar view was also expressed by Mukherjea J. in Lord Bishop of Mylapur v. Moulavi Meher Ali (1937) 41 C.W.N. 993. The learn, ed Additional Judge in the Court below mainly bases his judgment on the decision of Mitter J. in Ramizadidn basar v. nimaddi Basar : AIR1933Cal339 . That was a case in which certain persons sought to set aside a sale under the provisions of Section 174, Ben. Ten. Act. Their application would have been clearly time barred unless the applicants could show that they were entitled to the benefit of Section 18, Limitation Act. The sale was set aside by the first Court but this decision was reversed on appeal by the District Judge on a finding that there had been no fraudulent suppression of the sale proclamation as alleged. The judgment, debtors then moved this Court in revision. Mitter J. found that the District Judge had failed to consider the fact that the property sold had been grossly undervalued in the sale proclamation. In this connexion Mitfcer J. observed:

This is of a class of cases where the statement of the inadequate value is so great, as has been said by a distinguished English Judge, as to shock the conscience. This itself, as I have pointed out in another case, namely Bhairab Chandra Sinha v. Kali Dhan Roy : AIR1929Cal736 , is valuable evidence of fraud, and no Court would be justified in circumstances like these to uphold a sale which offers clear evidence of fraud on the part of the decree-holders.

10. In that view of the case the learned Judge held that the onus lay upon the auction-purchaser to establish that the person injured by the fraud had clear and definite knowledge of those facts which constituted the fraud at a time too remote to allow him to make the application. In other words, Mitter J. intended to apply the principle laid down by the Judicial Committee in Rahimbhoy Habibbhoy v. Charles Agnew Turner (1893) 17 Bom 341 which has already been discussed. The learned Judge however did not consider the necessity which lay upon the applicants to discharge the initial onus as regards fraudulent concealment for the purpose of getting the benefit of Section 18, Limitation Act, and, this being the case, I do not think it can be said that the decision in Ramizadidn basar v. nimaddi Basar : AIR1933Cal339 falls within the principle which was laid down by the Privy Council in Rahimbhoy Habibbhoy v. Charles Agnew Turner (1893) 17 Bom 341 and was reiterated by Sir Lawrence Jenkins, Chief Justice, in Narayan Sahu v. Damodar Das (1912) 16 C.W.N. 894 and by Mookerjee J. in Biman Chandra v. Promatha nath (1922) 9 A.I.R. Cal 157.

11. A Court may be perfectly justified in setting aside a sale in a proper case established on an application filed within the prescribed period of limitation where the Court is satisfied that the property sold was grossly undervalued: Saadatmand Khan v. Phul kuar (1898) 20 All. 412. Civil Court sales should riot however be lightly set aside and, even in a case in which no question of limitation arose, the Court would necessarily demand a high standard of evidence to prove that their had been fraud or irregularity in publishing or conducting the sale on account of under valuation. A fortiori, mere proof of under valuation would certainly not be sufficient to enable an applicant to succeed on a time-barred application. The initial point to be considered in such a case is not whether fraud was committed in publishing or conducting the sale but whether fraud was committed on the applicant to set aside the sale by concealing from him his right to apply to have the sale set aside. The nature of the fraud whioh has to be proved, is therefore essentially different in the two cases. This aspect o the matter appears to have been over, looked by Mitter J. in Ramizadidn basar v. Nimaddi Basar : AIR1933Cal339 and I am not therefore prepared to accept his decision in that case as containing a correct statement of the law with reference to this matter. It follows therefore that in my view the learned Additional District Judge has misplaced the initial onus which lay upon the applicant and, in these circumstances, the matter will require further consideration.

12. Having regard to the facts which are alleged in the case with which we are now dealing, it should first be considered whether or not the applicant has been able to show that, by reason of any fraudulent concealment on the part of the decree-holder, she was kept from the knowledge of her right to file an application to have the sale set aside. In considering this matter, it will, of course, be open to the Court below to see whether there was in fact any gross under valuation of the property in the sale proclamation, and if such under valuation is established, the question would then naturally arise whether the opposite party was afforded an opportunity to attend at the drawing up of the proclamation or whether by reason of the conduct of the decree-holder the facts connected with the publication and conduct of the sale were fraudulently kept from her knowledge. If these initial facts are established in favour of the judgment-debtor, the onus will then lie upon the decree, holder to show that the judgment-debtor actually had knowledge of the facts constituting the fraud before the alleged date of knowledge, that is 13th June 1937, and that in these circumstances and having regard to the actual time when the fraud came to her notice, the application should be treated as time barred. In view of what I have stated above, the rule must be made absolute, the decision of the learned Additional District Judge must be set aside and the case is remanded to the Court below for reconsideration in the light of the observations made in this judgment. Costs will abide the result. The hearing-fee in this Court is assessed at three gold mohurs.


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