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Basanta Kumari Guha Vs. Ramkanai Sen Poddar and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in9Ind.Cas.698a
AppellantBasanta Kumari Guha
RespondentRamkanai Sen Poddar and ors.
Cases Referred and Ambika Prasad Singh v. Whitwell
Excerpt:
civil procedure code (act xiv of 1882), section 311 - sale, setting aside--understatement of value of property in sale proclamation--material irregularity--separate proclamation on each property, whether necessary--agreement to waive objections to irregularities, when valid--waiver, mixed question of law and fact--not to be allowed at late stage. - .....and the fifth, sixth, seventh and eighth properties belonged exclusively to the petitioner. the sale proclamation, on the basis of which the sale now in controversy took place, is alleged to have been served on the 29th march 1907. it notified that the sale would commence on the 20th may following, for recovery of rs. 11,041, the judgment-debt due, after allowance had been made for payments by the judgment debtors. the properties were described in detail, in a schedule, and their values were also set out. the sale, however, did not take place on the 20th may; but upon the application of the judgment-debtors and with the consent of the decree-holders, who were paid rs. 1,000 in part satisfaction of the decree, the sale was adjourned till the 22nd july, to be held on that date without.....
Judgment:

1. We are invited in this appeal by one of the judgment-debtors to reverse a sale, held in execution of a mortgage-decree on the 26th July 1907. The decree was obtained on the 19th September 1900, against nine judgment-debtors, and the properties directed to be sold, were also nine in number. Of those, the first, second and ninth properties belonged to the judgment-debtors numbered four to seven; the fourth property belonged to all; and the fifth, sixth, seventh and eighth properties belonged exclusively to the petitioner. The sale proclamation, on the basis of which the sale now in controversy took place, is alleged to have been served on the 29th March 1907. It notified that the sale would commence on the 20th May following, for recovery of Rs. 11,041, the judgment-debt due, after allowance had been made for payments by the judgment debtors. The properties were described in detail, in a schedule, and their values were also set out. The sale, however, did not take place on the 20th May; but upon the application of the judgment-debtors and with the consent of the decree-holders, who were paid Rs. 1,000 in part satisfaction of the decree, the sale was adjourned till the 22nd July, to be held on that date without the service of a fresh-sale proclamation. On the 22nd July, the decree-holders obtained leave to bid at the sale. But the judgment-debtors again applied for an adjournment for seven days, in order to enable them to raise money by private sale of the properties, and agreed to take no objection on the ground of illegality or irregularity, if their prayer was granted. The Court, however, refused their application, and adjourned the sale to the 26th July. On that date, the sale actually took place. The first two properties were not sold under circumstances which will be explained later on. The remaining seven properties were all purchased by the decree-holders for the sum of Rs. 10,325. There was only one out side bidder present at the final stage of the safe, and he appears to have offered bids in respect of the first two properties only, for which the decree-holders declined to offer bids. On the 21st August 1907, one of the judgment-debtors, the present appellant, applied to have the sale set aside upon various allegations of fraud, irregularities, and substantial injury. The Subordinate Judge overruled all these objections, and directed the sale to be confirmed. We are invited in this appeal to reverse this order, substantially on three grounds, namely, first, that there Were serious irregularities in the proceedings preliminary to the sale, inasmuch as the value of the properties had been grossly under-stated by the decree-holders in the sale proclamation, and this circumstance had caused serious injury to the judgment-debtors; secondly, that the sale proclamation had not at all been properly served as required' by law; and thirdly, that there had been grave irregularities in the conduct of the sale which was interrupted at one stage and subsequently resumed when intending bidders had left the Court premises.

2. All these points have been strenuously controverted on behalf of the decree-holder respondents; and it has further been suggested that it is not open to the judgment-debtors to attack the validity of the sale on the ground of any irregularity or illegality, inasmuch as they had waived all possible objection on such grounds, by their application of the 20th May 1907. We shall proceed to examine the validity of these contentions in the order just stated.

3. In support of the first contention, it has been argued by the learned Vakil; for the appellant, that in view of the prices offered by the decree-holders, at the execution sale, it is undeniable that the values of the properties had been grossly under-stated, in the sale proclamation; that, as a matter of fact, the prices paid at the execution sale, though higher than the values named, are still very much lower than the real market-values of the disputed properties; that the judgment-debtors have, consequently, suffered substantial injury; and that, on the principle laid down by the Judicial Committee in the case of Saadatmand Khan v. Phul Kuar 25 I.A. 146 : 20 A. 412 : 2 C.W.N. 550 they are entitled to have the sale set aside. To bring out clearly the objection of the appellant on this point it is convenient to set out in a tabular form the values of the various properties as stated in the sale proclamation, and the prices as realized at the execution sale:

No. Value in sale Proclamation Prise Realized at sale.

1 ' 4,500 Not sold

2 ' 3,100 Not sold

3 ' 800 1,300

4 ' 600 900

5 ' 1,000 1,635

6 ' 1,000 1,200

7 ' 500 1,200

8 ' 300 565

9 ' 150 3,525

4. It will be obvious at a glance from this table, that the values set out in the sale proclamation were grossly inadequate, even if it is assumed that the properties fetched their legitimate prices at the execution sale. The difference is most remarkable in the case of the ninth property. Taking the other six properties in the aggregate, their value as stated in the sale proclamation is Rs. 4,200 while the total price fetched at the execution sale is Rs. 6,800. This variation, however, would be immaterial, if the prices actually realised are proved to be the proper prices. It is, therefore, necessary to examine the true market-values of these properties. The learned Subordinate Judge has found himself unable to ascertain the true value of the properties sold, because he considers the evidence on the side of the petitioner, untrustworthy in the absence of the collection papers. We are unable to agree with the Subordinate Judge in the view he has taken. The Settlement khatians have been produced, in respect of the lands comprised in four villages, Neamatpore, Hazipore, Kalia and Betua; the total income of the property in these four villages is found on calculation to be Rs. 5,291; if the Government revenue is deducted, and an allowance is made for collection charges, vacancies and other reducing factors, the net income is brought down to Rs. 2,075: at ten years' purchase, the value would come to Rs. 20, 750. This does not include the lands situated in the four villages, Daulatpore, Daudpore, Naldigi and Tataria. If we take as the.basis of our calculation, the figures given by Kristo Coomar Ghose, the manager of the petitioner, we find that the net income of the six properties other than the ninth, amounts to Rs. 1,879; if a deduction is allowed for collection charges at the rate of ten per cent., as the Subordinate Judge has done, this gives a net profit of Rs. 1,692; at ten years purchase this gives Rs. 16,928, as the market-value of these six properties. It is worthy of note, however, that the witness Kristo Coomar states that properties of this description, are sometimes sold for fourteen or fifteen years' purchase; if the valuation is made on this basis, a higher figure would obviously be obtained.

5. We notice that the Subordinate Judge has altogether discarded the oral evidence on the side of the petitioner, because the collection papers were not produced. We are not prepared to accept this view as sound, because the oral evidence, in so far as it is corroborated by the khatians, is undoubtedly trustworthy. It may, further, be observed that the decree-holders have adduced no rebutting evidence as to the value of the properties; this they might reasonably be expected to do, because they are no strangers to the properties, which are covered by their mortgage security; and it may well be assumed that they had formed some estimate of their value, when they accepted them as securities for the money advanced. Under such circumstances, we must hold that the value of the six properties other than the ninth is approximately between Rs. 16,000 to Rs. 20,000. Similar remarks apply to the ninth property. The evidence on the side of the petitioner, which is not sought to be rebutted in any way, shows that it is a valuable garden and yields annually at last Rs. 500, though one portion of it is used as 'homestead, and another portion is agricultural land. The decree-holders further obtained on cross-examination the information that in the course of one year betel-nuts alone were sold for Rs. 365. If, therefore, the property is valued at ten years' purchase, it must be taken to be worth about Rs. 5,000. The conclusion is consequently irresistible, that the properties of which the aggregate value was stated in the sale proclamation as Rs. 4,200 and which were purchased by the decree-holders themselves for Rs. 6,800 are really worth from Rs. 16,000 to Rs. 20,000; while the ninth property, which was valued at Rs. 150 by the decree-holders and was purchased by them for Rs. 3,525, is worth about Rs. 5,000. It is, moreover, manifest from the proceedings, that the values set out in the sale proclamation, were deliberately under-stated, for instance, the third property, which was valued at Rs. 800, had a first bid of Rs. 1,200 offered by the decree-holders; similar observations apply in every instance, because the decree-holders in the case of each lot offered a much higher bid, in the very first instance, than the value indicated in the sale proclamation. The most remarkable instance, however, is furnished by the case of the ninth property, which was valued at Rs. 150, whereas the first bid on behalf of the decree-holders was Rs. 3,310. These facts bring the case completely within the decision of their Lordships of the Judicial Committee in the case of Sadatmand, Khan v. Phul Kuar 25 I.A. 146 : 20 A. 412 : 2 C.W.N. 550, where it was ruled, that if an under-statement of the value of the property to be sold has been made in the sale proclamation, which is calculated to mislead bidders and to prevent them from offering adequate prices or from bidding at all, and the sale has thus resulted in a price altogether inadequate, such mis-statement must be treated as a material irregularity in publishing or conducting the sale, and the special remedy provided in Section 311 becomes applicable. In that case, their Lord ships further observed that the disproportion between the revenue and the value assigned, might excite suspicion of something wrong with the title and in this way deter biddings. This remark is well applicable to the facts of the present litigation, where the amount of Government revenue was correctly stated, and the estimated value of the property was mentioned at a disproportionately low figure. In our opinion, this ground by itself is sufficient to justify the reversal of the sale.

6. The second ground urged on behalf of the petitioner, raises the question of the actual service of the sale proclamation. The learned Subordinate Judge has found that the allegation of the decree-holders that the sale was duly proclaimed in all the villages where the properties are situated, is untrue; that, as a matter of fact, the sale was proclaimed in five villages only, namely, Betua, Alamatpore, Naldigi, Hazipore and Daulatpore, but not in the three other villages, Kachia, Daudpore and Tataria. The learned Vakil for the appellant has contended that the proclamation must accordingly be deemed irregular, but there is, in our opinion, not much force in this contention.. No doubt, under Section 289 of the Code of 1882, as it originally stood, it had been ruled in the case of Tripura Sundari v. Durga Churn Pal 11 C.74, that where distinct properties were attached, there must be a separate proclamation for each property; but in the case of Pedro Antonio De Penha v. Jalbhoy Ardeshir Set 12 B. 368, it was held, that where a property is divided into several parcels, it is not necessary to make separate proclamation for each lot, unless they are at such a distance that there is no moral certainty of communication to persons on or interested in the one, of what is publicly done on the other Since these decisions, however, the section has been amended by Section 21 of Act VII of 1888, by which the words on the spot where the property is attached,' were repealed, Besides, as pointed out in the case of Jagernath Sahai v. Dip Rani Koer 22 C. 871 omission to publish a separate sale proclamation on each property, would merely amount to an irregularity, which would not necessarily vitiate the sale. The only reasonable rule on the subject, which can be adopted, is that there need not be separate proclamation in each village unless proper notice of the sale could not otherwise be given. In the case before us, the evidence as to the distances of the several villages from one another, is inconclusive, and it is impossible for us to hold that there ought to have been a separate proclamation in each village. The learned Vakil for the appellant has, however, further contended that the evidence as to the service of sale proclamation in five of the villages, is unreliable. This contention is, in our opinion, not without considerable force. The decree-holders attempted to prove in the Court below that the sale proclamation had been served on all the properties. This story has been disbelieved, and, in our opinion, rightly. The position, therefore, is that an important portion of the evidence as to the Service of sale proclamation, has been found to be unworthy of credit; this necessarily affects the credibility of the other statements by the very same witnesses as to service in five: villages. The difficulty is further emphasised by the fact of the extreme paucity of bidders at the sale. Stress, however has been laid on the circumstance; that' the judgment-debtors admitted in their application of the 20th May 1907, that the sale proclamation had been duly served. In our opinion, too much reliance ought not to be placed upon this fact. On the 20th May, 1907, when the sale was impending, the judgment-debtors were extremely anxious for a postponement to enable them to raise the necessary funds, and they would naturally, with a view to obtain the consent of the decree-holders, agree to make a statement of this description. This explanation, actually given by the first witness on the side of the petitioner, does, in our opinion, offer a very probable version of what actually took place. Upon an examination, then of the evidence of the witnesses on this part of the case, we are inclined to the view that the proof of due service of the sale proclamation is unsatisfactory; but it is needless to discuss the matter in further detail, as the sale must be set aside on the first ground.

7. The third ground upon which the sale is attacked by the petitioner, is that there were grave irregularities in the conduct of the sale, on the 26th July, 1907. The evidence makes it reasonably clear that, as soon as the biddings were Commenced, the decree-holders who had obtained leave to bid for the properties, declined to offer any bid for the first two properties. They put in a petition, on the other hand, wherein they stated that they had discovered that the properties were under diluvion, which had reduced their profits. They consequently prayed that their values might be reduced to Rs. 1,000, and Rs. 1,500 respectively. There was necessarily some confusion, and the judgment-debtors protested that the third property could not be sold till the first and second had been put up for sale. What happened precisely at this stage, is not clear upon the evidence. The Pleader for the judgment-debtors, appears to have moved the Court; but what the result was, does not appear. This much is recorded in the order-sheet that the decree-holders might bid for the first two properties at the price fixed by them, but the properties would not be sold at a price less than the price mentioned in the petition of the decree-holders, and the other properties might be sold for prices not less than those stated in the decree-holders' application. Bids were then taken in respect of all the properties. The bidders, besides the decree-holders, were two persons, Guru Charan and Janakinath, and also Abani Mohan Banerjee, the Pleader for the judgment-debtors. The Nazir then put up the matter before the Subordinate Judge with a recommendation, that excepting the first four lots, the bids for the others might be accepted, as the decree-holders had declined to bid at the upset value of the first two, and desired to offer a higher bid for the third and fourth. Later on in the day, under verbal orders of the Court, all the properties were put up for sale again. Meanwhile, Janki Nath appears to have left the Court, and there is evidence to show that the impression was created, after what had taken place in the earlier part of the day, that the properties would not be sold on that day. There is some evidence also to show that at least one intending bidder had left after 4 o'clock. As a matter of fact, the sale took place after 5 P.M., with the result, that for most of the properties, the only bids offered were on behalf of the decree-holders. Guru Charan offered bids for two lots, and Abani Mohan was unsuccessful in the bids he offered for four others. In our opinion, it is fairly clear that the sale was not conducted in the regular manner. Some confusion at the initial stage was created by the action of the decree-holders who declined to bid for the first two properties (although they had obtained leave to do so), upon the allegation that they were under diluvion; there was obviously an interruption; an application was made to the Court, with what result, cannot be precisely ascertained; the bidding was resumed, but the sale was not concluded on the termination of the first biddings; the bids were resumed very late in the day, after an impression had been not unnaturally created that the sale would not be concluded on that day. Under such circumstances, the inference may reasonably be drawn that the substantial injury suffered by the judgment-debtors is, in some measure atleast, traceable to the irregular manner in which the sale was conducted. This by itself would, in our opinion, be ample ground for reversal of the sale. It is worthy of remark that as the decree-holders themselves, one of whom was a Pleader of the Court in which the sale took place, managed to purchase the properties for a comparatively small sum, no question obviously arises for examination as to what the position might have been, if the properties had passed into the hands of a bona fide purchaser for value without notice.

8. The only point which remains for consideration, arises from the suggestion, somewhat faintly made by the respondents decree-holders, that no objection on the ground of irregularity or illegality is open to the judgment-debtors, as they had waived all such objections by their petition of the 20th May 1907. It is to be remarked, in the first place, that no such ground was urged in the Court below, where the petition' mentioned was relied upon as merely containing an admission of service, and naturally the evidence has not been directed to elucidate any possible question of waiver, which is a mixed question of fact and law. It is clear, however, that no question of waiver was raised, because it could not have been raised with any chance of success. The learned Vakil for the respondents, in this Court, relied upon the cases of Giridhari Singh v. Hurdeo Narain Singh 3 I.A. 230 : 26 W.R. 44; Raja Thakur Barham v. Ananta Ram 2 C.L.J. 584 and Noorul Hossein v. Omatool Fatima 25 W.R. 34 to show that where judgment-debtors have waived their right, to question the validity of a sale, they are not entitled to impeach the sale on grounds they have expressly waived. This doctrine is perfectly sound, but it has no application to the circumstances of the present case. Let us assume for a moment that by their petition of the 20th May 1907, the judgment-debtors agreed to waive all objections to the sale if it took place on the 22nd of July, or on any other date that might be fixed according to the practice of the Court, that is, practice in the matter of holding sales in execution cases in the different Courts at the station one after another. The sale, however, did not take place on the 22nd July, nor on any other date fixed according to the practice of the Court. On the 22nd July, as we have already stated, the judgment-debtors again applied for adjournment, and offered to waive all objections to the sale, if it took place on the 29th July; if this application had been granted, there might perhaps have been some room for the contention that the judgment-debtors had waived their objection to the sale on the ground of irregularity. The application, however, was refused. Obviously, therefore, the offer of the judgment-debtors to waive any possible objection was not accepted. There was consequently no waiver which could estop them from attacking the validity of the sale. As pointed out by this Court in the case of Chandanbala Debi v. Probodh Chandra Roy 9 C.L.J. 251 at p. 255 : 36 C. 422 : 2 Ind. Cas. 338, an agreement of this description entered into by the parties is valid and operative only when sanctioned by the Court; where the Court withholds its assent and declines to pass an order on the basis of the agreement of the parties, the matter is set free, and the judgment-debtors cannot be regarded as bound by the offer which they had made. Apart from this aspect of the matter, however, we may observe that if the question of waiver had been raised at the earliest possible stage of the proceedings and evidence had been directed to its elucidation, two questions would require consideration, namely, first, what were precisely the rights waived by the judgment-debtors by their application of the 20th May 1907, and secondly, if it was a waiver of all possible grounds of objection, whether an agreement to waive all the rights of a person to seek the protection of a Court of Justice against fraud upon the process of the Court itself, would at all be enforced. The decision of this Court in the cases of Preo Lal Paul v. Radhika Prosad 6 C.W.N. 42 and Bhikari Misra v. Rani Surjamoni 6 C.W.N. 48 shows that any application by a judgment-debtor alleged to constitute a waiver of, his right to question the validity of a sale, will be narrowly scrutinized, and such rights only will be taken to have been waived as were within the knowledge of the judgment-debtor at the time and were expressly abandoned. Again, the decision of this Court in the cases of Dhanukhdari Singh v. Nathini Sahu 6 C.L.J. 62 : 11 C.W.N. 848 and Ambika Prasad Singh v. Whitwell 6 C.L.J. 111, shows that there may be circumstances under which a plea of waiver would not be entertained by a Court of justice, as contrary to public policy. In any event, as a question of waiver is a mixed question of fact and law, it ought not to be allowed to be raised at a late stage of the proceedings. The plea of waiver, if entertained and allowed to prevail, shuts out an inquiry into the truth, arid such a course ought not to be adopted to the prejudice of the judgment-debtors until they have been afforded ample opportunity to rebut it. The reasonableness of this view is emphasised in the present case by the circumstance that the application alleged to constitute waiver, was presented by a Pleader on behalf of a purdanashin lady, and we have no information as to whether this was done with her knowledge or authority. It is manifest that a fall investigation into facts would be necessary before we could deal adequately with the plea of waiver suggested for the first time in this Court. We must consequently overrule the contention of the respondents, that the judgment-debtors are precluded from assailing the validity of the sale, Upon an examination of the whole case, we feel no doubt whatever that properties of considerable value have passed into the hands of the decree-holders in these proceedings, which have not been conducted with any approach to regularity, and it is a matter for surprise that the Subordinate Judge should have confirmed the sale in the manner he has done.

9. The result is, that this appeal must be allowed and the sale reversed. The appellant is entitled to her costs, both here and in the Court below. We assess the hearing fee in this Court at ten gold mohurs.


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