Ballygugne Building Society Pvt. Limited v. Munshi Farhadali
1966-08-04
BIJAYESH MUKHERJI
body1966
DigiLaw.ai
JUDGMENT 1. THE opposite party numbering 1 to 7 are, at the relevant time, the landlords, and Ballygunge Building Society private Ltd. ("the Society" hereafter, for short) is their tenant, on an annual jama of Rs. 15, as respects 1. 60 acres of land, corresponding to a little less than 5 bighas, within the jurisdiction of the police station of Chinsurah, the headquarters of the Dist. of Hooghly. On June 8, 1955 such landlords got a decree for rs. 43-6 annas, inclusive of costs, against the Society in a suit for recovery of arrears of rent. On April 4, 1956, they applied for execution of the same, under section 162 of the Bengal Tenancy act. 8 of 1885, by attachment and sale of the holding. In doing so, they stated in the schedule of immovable property at the back of the execution petition in a tabular form and also in the draft process of combined attachment and proclamation the value of this nearly 5 bighas holding to be Rs. 45. That very day (April 4, 1956) the court admitted the application for execution, under section 163, subsection 1, of the bengal Tenancy Act, read with order 21, rule 17, of the Code of Civil procedure Code 5 of 1908, and issued combined order of attachment and proclamation in the prescribed form : just the draft supplied by the decree holders, fixing June 13, 1956, 11-30 a. m., for sale, put up to sale, as notified, this holding, comprising a little less than 5 bighas, was bought by Nilratan Sarkar, opposite party No. 8, for Rs. 300, a price which works out the value of land in that area in mid-1956 at Rs. 3 or thereabouts a cottah. On September 19, 1956 - well within the time allowed by law : six months from Juno 13 previous, the date of the sale - the Society applied to the court under section 174, sub-section 3, of the Bengal Tenancy act, to set aside the sale on the ground, amongst others, of fraud in publishing the sale, it being specifically pleaded that the property : agricultural land producing jute and paddy, sold at Rs. 300, would be valued at Rs 10,000 and more, 2. THE first court dismissed the application, conceding at the same time that Rs. 300 at which the nearly 5 bigha holding was sold was low enough.
300, would be valued at Rs 10,000 and more, 2. THE first court dismissed the application, conceding at the same time that Rs. 300 at which the nearly 5 bigha holding was sold was low enough. it added the court sales were for low prices. On appeal, the subordinate judge held as much, remarking that "a grossly inadequate price the common feature of court sales'', and that no sale "is liable to he set aside" unless such low price "results from any act of fraud on the part of the decree-holder in publishing the sale. " necessarily, the appeal came to little. Hence this revisional petition by the Society under section, 115 of the civil Procedure Code. 3. MR. Amal Mukherjee appears for the petitioners the Society, Mr. Ranjit Banerjee appears for the auction-purchaser opposite party, Nilratan. None appears for the decree-holders opposite party, including the legal representatives of opposite party No. 1, who died during the carriage of this revision case and has since been substituted by them. 4. THE main point, and in a way, the only point, on which I have been addressed by Mr. Mukherjee and Mr. Banerjee, is this sort of a low valuation of some 5 bighas of land for which the upset price was put by the decree-holders in the execution petition and the sale proclamation at Rs. 45. That works out at the rate of 45 paise or thereabouts a cottah. Price indeed in April 1956 when the decree-holders applied to the court for execution by attachment and sale ! if, more than eight years after the partition of India, and of Bengal in particular, such a fantastic valuation, deliberately put in by the decree-holders in their solemn execution petition, verified by one of them as true to his knowledge, will not shock the conscience of a judge, the judge, I am afraid, has no conscience to be shocked : just what i have been observing in this class of cases, the most typical of which is (1)Prabodh Chandra Mukherji v. Pashupati Mukherji, Civil Revision Case No. 1507 of 1964, in which I rendered my judgment on June 29, 1966, (since reported in 71 CWN 649) and which may be considered as part of this judgment. 5. MR.
5. MR. Ranjit Banerjee tries to get round such an ugly manifestation by contending that since this is a sale under the bengal Tenancy Act, what passes is not the property, but the tenancy right only. To me that seems to be a distinction without difference. The tenancy right in some 5 bighas of land is a spices of property too, and a valuable property at that, when the status of the tenant is that of a settled raiyat, as is evidenced by the Society's instrument of title, exhibit 1. Say, it is something less than property in fee simple, if that is what Mr. Banerjee seeks to convey. Still 45 paise a cottah for such land to say this is to reject it. The rupee has been devalued, and that too only yesterday, so to say. But property ? devaluation never. On the contrary, ever since the partition has been upon us, with its aftermath, the truncated Bengal, we live in now, has shrunk to one-third of what she was before. Add to this the influx of our brothers and sisters almost in never-ending waves from across the border and the swelling of the land-hungry. And you get the consequential upping and still more upping of the value of all varieties of land here, there and everywhere. Indeed, such is the notoriety of this development,- a matter of public history, a matter of common knowledge, - that I can, and do, take judicial notice of it, under section 57 of the Evidence Act, 1 of 1872. Doing so, I hold that the value of land within the jurisdiction of chinsurah police station, so close to the hooghly railway station, only a few miles away from Calcutta, as the evidence reveals, could not be, and was not, 45 paise a cottah. 6. SUCH then is the negative finding I have come to. The evidence on record warrants a positive finding as well. The Society's instrument of title, a sale-deed dated July 4, 1947, just on the eve of the partition, reveals purchase of the land in controversy here plus other land, totalling 3. 88 acres, say, a little more than 111/2 bighas, at rs. 8,400. That works out, say, at the rare of Rs. 35 or thereabouts a cottah. And if you take the land in controversy only, admeasuring 1. 60 acres, it was sold for Rs.
88 acres, say, a little more than 111/2 bighas, at rs. 8,400. That works out, say, at the rare of Rs. 35 or thereabouts a cottah. And if you take the land in controversy only, admeasuring 1. 60 acres, it was sold for Rs. 1,900, as shown separately that works out, say, at the rate of Rs. 20 a cottah. Be it Rs. 20 or Rs. 35, that was in July 1947. July 1947 to April 1956 is a little less than 9 years during which the land value did not remain static. It went up and up. So. Rs. 100 or thereabouts a cottah, as spoken to by the petitioning Society's first and third witnesses has the ring of probability and truth in it ; whereas Rs, 10 or thereabouts a cottah, as spoken to by the solitary witness of the decree-holders, looks, on the face of it, unworthy of credence. Even then he does not say ; 45 paise a cottah. He says instead : the minimum price of land in the vicinity is rs. 10 or so a cottah. I am not entering into the realm of facts to substitute my finding for that of the learned judges below. I am simply analysing the evidence, which the learned judges have not done, in support of their finding about the utter inadequacy of the land value. Thus, Rs. 100 a cottah may safely be taken as the proper land value at the revelant time. If it errs, it errs on the low side. Which means that the value of the land put up to sale on June 13, 1956, was a little less than Rs. 10,000. But its value was put at Rs. 45 and it was sold at Rs. 300. Once the finding is so, and it cannot but be so, two conclusions follow. One conclusion is that by putting in the value of some 5 bighas of raiyat sthitiban land, near the Hooghly railway station and within the jurisdiction of chinsurah police station, at Rs. 45 only, in suppression of its fair value which is, in the least, Rs, 10,000 or thereabouts the decree holders commit fraud upon the court.
One conclusion is that by putting in the value of some 5 bighas of raiyat sthitiban land, near the Hooghly railway station and within the jurisdiction of chinsurah police station, at Rs. 45 only, in suppression of its fair value which is, in the least, Rs, 10,000 or thereabouts the decree holders commit fraud upon the court. I say : in suppression, because it may safely be taken for granted that the decree-holders knew the true facts, one such fact being that so much of valuable land was not, and could not be, valued at so little : Rs. 45, working out at 45 paise or thereabouts a cottah, and another such fact being that the minimum value of such land was in the least Rs. 10,000 or thereabouts. Incidentally, the auction-purchaser Nilratan, who does not examine him or any witness, knew too, it may also be taken for granted, that Rs. 300 at which he was buying such valuable land and it works out at Rs. 3 a cottah was too low a figure. What else can all this be but the worst type of fraud ? The learned judges refrain front drawing such a conclusion, convinced though they are of the utter inadequacy of the price, on the specious plea that court sales do not fetch a price adequate enough. In doing so, they ignore the most material of a material irregularity : insertion of Rs. 45 as the value of the land, act in the exercise of their jurisdiction with illegality, and, worse still, thereby reduce a solemn court sale into a farce. What the magnitude of illegality is can best be illustrated by two Privy Council decisions one of which is (2) Sadatmand khan v. Phul Kuar, (1898) 25 IA 146 there, for the decretal dues of Rs. 565-9 annas, a property valued at rs. 8,000 or Rs. 9,000 was put to sale on the basis of a sale notice where the value of the property was inserted as Rs. 800. That led Lord Hobhouse, delivering the judgment of the Board, to observe ; "their Lordships do not think it necessary to mention more than one ground for impeaching the sale.
8,000 or Rs. 9,000 was put to sale on the basis of a sale notice where the value of the property was inserted as Rs. 800. That led Lord Hobhouse, delivering the judgment of the Board, to observe ; "their Lordships do not think it necessary to mention more than one ground for impeaching the sale. It is indeed something more than the kind of irregularity which is commonly alleged, for it is a misstatement of the value of the property which is so glaring in amount that it can hardly have been made in good faith, and which, however it came to be made, was calculated to mislead possible bidders, and to prevent them from offering adequate prices, or from bidding at all. " and the court sale at which the property was bought for a sum of Rs. 670 was not set aside, in an application under section 311 of the 1882 Code, corresponding to the present order 21, rule 90. Governing myself by this decision, I also say that it is not necessary to mention more than one ground for impeaching the sale, the ground being a deliberate misstatement of the value of the nearly 5-bigha, holding at Rs. 45, though its fair value will be Rs. 10,000 or thereabouts, so glaring a misstatement that bad faith, a synonym for fraud, is writ large upon it. 7. THE other Privy Council decision is (3)Tekait Krishna Prasad Singh v. Moti Chand, (1913) 40 IA 140, where, in addition to other irregularities, there was a gross under - valuation, the value of the property for sale having been stated in the schedule attached to the proclamation to be Rs. 2,000, which corresponded to the amount due to the government for unpaid taxes and the like. That led Lord Moultton to observe : "what happened on the occasion of the sale is what might have been expected. With the exception of the Collector and the decree-holder no bidder was present. The Government bidding was Rs. 2,000, the amount due for taxes, etc., from the property. The decree-holder then bid Rs. 2,020 and the property was of course knocked down to him. " And here ? With the exception of the decree-holders and one Nilratan no bidder was present. The decree-holders' bidding was Rs. 50, the decretal dues of Rs. 43-6 annas having swollen by then to Rs.
The decree-holder then bid Rs. 2,020 and the property was of course knocked down to him. " And here ? With the exception of the decree-holders and one Nilratan no bidder was present. The decree-holders' bidding was Rs. 50, the decretal dues of Rs. 43-6 annas having swollen by then to Rs. 49-9 as.- 6 ps. because of costs for execution. Nilratan then bid Rs. 300 and the nearly 5 bigha holding was of course knocked down to him. 8. OR take the case Mr. Mukherjee relies upon : (4) Bhairab Chandra sinha v. Kalidhan Roy, (1928) 33 CWN 569, where one property valued at Rs. 1,600 was sold for Rs. 73, and another valued at Rs. 386 odd sold for Rs. 32, and D. N. Mitter, J. held that "the inadequacy of price fetched by sales in these two cases was so great as to shock the conscience" and that "such inadequacy was itself valuable evidence of fraud in publishing and conducting the sales. " Story's Equity Jurisprudence, 14th edition, says as much. Pointing out that inadequacy of consideration alone is not sufficient evidence of fraud, the author adds in paragraph 355 : "still however there may be such an unconscionablesness or inadequacy in a bargain as to demonstrate some gross imposition or some undue influence but then such unconscionablesness or such inadequacy should be made out as would (to use an expressive phrase shock the conscience and amount in itself to conclusive and decisive evidence of fraud. " This is but a paraphrase of Lord chanceller Eldon's judgment in (5)Coles v. Trecothick, (1804) Vesey, Jun's reports, volume 9, page 234 at page 246. 9. SUCH then is the clear law which the learned judges pass by. And, in passing it by, they act in the exercise of their jurisdiction with illegality, giving me thereby jurisdiction to interfre with what they have done. 10. IF fraud is an ineluctable conclusion which follows from the shockingly gross under valuation I see here, no less ineluctable is another conclusion : that the executing court acts blindly on the information about valuation supplied by the execution-creditors in the schedules attached to the execution petition and the proclamation, and thus stands self-convicted of extreme carelessness, for which alone the sale cannot stand.
This is just what I have held in Prabodh Chandra Mukherji's case, (supra), paragraph 6 ante, following the well-known Privy Council decision in (6) Marudanyagam Pillai v. Manickavaskam Chettiar, (1944) 72 IA 104 : 49 CWN 292 : AIR 1945 PC 68, and a Bench decision of this court presided over by Chakravarti, C. J., and Lahiri, J., (as his Lordship then was) in (7) Manmatha Nath Chakrabarty v. Sachindra Kumar Chakrabarty, (1955) 59 CWN 1082 : AIR 1956 Calcutta 59. When I say so, in the course of the hearing, it brings forth a contention from Mr. Ranjit Banerjee that I cannot do so here, because, governed as the sale is by the Bengal Tenancy Act, the executing court has no duty to see to the insertion of as fair and accurate a valuation as possible in the proclamation, as it has under the Code of Civil Procedure, sub-rule (4) of the rule 66 of order 21 of which is not attracted to the case in hand. Sub-rule (4) enables the court to summon and examine any person and to require him to produce any document, for the purpose of ascertaining the matters to be specified in the proclamation. Let this contention be examined. Section 163, sub-section (2), of the bengal Tenancy Act, opens with the words : "the proclamation shall, in addition to stating and specifying the particulars mentioned in rule 66 of Order xxi in Schedule I, to the said Code announce-" Now, sub-rule (2) of rule 66, it is true, specifies the particulars to be inserted in the proclamation as fairly and accurately as possible. But from that it does not follow that sub-rule (4) does not apply in a sale the proclamation of which is issued under section 163, sub-section (2). For one thing, sub-section (2) does not say so; it does not exclude sub-rule (4) of rule 66. It speaks instead of rule 66. For another, sub-rule (2) applying - a point Mr. Banerjee concedes - it becomes the court's duty to see that the particulars specified in the proclamation are as fair and accurate as possible. It is the court's proclamation - not the party's. Now how will the court do its duty unless it has the power to summon competent persons and to examine them, for the purpose of ascertaining the matters to be specified in the proclamation ?
It is the court's proclamation - not the party's. Now how will the court do its duty unless it has the power to summon competent persons and to examine them, for the purpose of ascertaining the matters to be specified in the proclamation ? Fair valuation of the property to be sold is one such matter. Thus, sub-rule (4) of rule 66 comes in, as a matter of Course. And the executing court under the bengal Tenancy Act has the same power as the executing court under the Civil. Procedure Code with a view to ascertaining the matters to be specified in the proclamation. I, therefore, reiterate my charge of the executing court in the case in hand having acted blindly on the information supplied by the decree-holders and thus stood self-convicted of extreme carelessness, for which alone the impugned sale must be set aside. 11. SUB-RULE (3) of rule 66, Mr. Banerjee refers me to, stands on a different footing. No separate application for an order for sale, as provided by sub-rule (3), has to be made by the decree-holder under the Bengal Tenancy act, under section 162 of which, read with order 21, rule 11, sub-rule (2) of the Code, an application for execution, attachment and sale is all rolled into one. So what ? You have in fact stated that in the schedule to the execution petition, no less in the schedule to the proclamation, that the value of this nearly 5-bigha holding is Rs. 45. You have verified the former such statement to be true to your knowledge, though you have not cared to pledge your oath to tell the court how you came by such knowledge. Say, and it is the utmost that can be said, you have made a gratuitous statement, because you have not to make a separate application for an order for sale, as provided by sub-rule (3)of order 66. Even then you cannot escape. Because the "moonsiff" in saadatmand's case, (supra), thought just so. "his reason was that no rule required that the value of the property should be mentioned in the proclamation ; and that as the entry (on valuation) was uncalled for and not legally obligatory, to give a wrong value is no reason for setting aside a sale. " Upon that, Lord Hob-house observed : "this is a very mistaken view.
"his reason was that no rule required that the value of the property should be mentioned in the proclamation ; and that as the entry (on valuation) was uncalled for and not legally obligatory, to give a wrong value is no reason for setting aside a sale. " Upon that, Lord Hob-house observed : "this is a very mistaken view. The fact that it (misstatement about valuation) was made gratuitously by the decree-holder and the Court, does not prevent it from being a material irregularity in publishing or conducting' the sale, such as to bring that case within the special remedy provided by section 311" of the 1882 Code, which corresponds to order 21, rule 90 of the present Code. So, that way neither the decree-holders nor the auction-purchaser can flee the legally bad sale I see here. 12. THEN, Mr. Banerjee takes me through several sections in the Bengal tenancy Act's, Chapter 14 captioned : sale for Arrears under Decree, rests his stance on section 164, and argues: "if the bidding reaches a sum sufficient to liquidate the decretal dues plus costs of sale, the holding put to sale shall at once be knocked down. What does it matter therefore whether I state the value to be Rs. 10 or Rs. 10,000?' But section 164 applies when, in the context of facts here, a holding at fixed rates has been advertised for sale under section 163. The advertisement, as can be gleaned from the proclamation, nowhere says that a holding at fixed rates is being put to sale. Again, to continue noticing the mandate of section 164, after such advertisement, the holding at fixed rates shall be put up to auction subject to registered and notified incumbrances within section 161, clause (b). Nothing of the kind is seen here. So, no question arises of the holding being knocked down, so soon as the bidding reaches the decretal dues plus costs of sale. Arises instead the question of gross undervaluation evincing fraud and striking down the very sale. In this background, is futile to go by section 75a of the Bengal Tenancy Act, suspending enhancement of rent, and the Estates Acquisition Act 1953, 1 of 1954, Mr. Banerjee refers me to, in support of his contention that the holding here is a holding at fixed rates.
In this background, is futile to go by section 75a of the Bengal Tenancy Act, suspending enhancement of rent, and the Estates Acquisition Act 1953, 1 of 1954, Mr. Banerjee refers me to, in support of his contention that the holding here is a holding at fixed rates. The combined effect of section 4, clause (a) and section 18, clause (c), of the Bengal tenancy Act, - sections which I consider of my own -, is that a raiyat holding at a rent, or rate of rent, fixed in perpetuity, is a raiyat holding at fixed rates, and shall be deemed to be a settled raiyat of the village if he complies with the conditions set forth in section 20 But whether the Society is that or not is anybody's guess. No evidence is there to that end. So, the contention resting on section 164 cannot receive effect. " Thus, all the contentions urged by Mr. Banerjee fail. The gross undervaluation, shocking to one's conscience and per se evidence of fraud, remains. The impugned sale must, therefore, go down. 13. IN the result, the rule must be, and is hereby, made absolute with costs throughout. The orders of the courts below be set aside and the petitioner's application under section 174, sub-section (3) of the Bengal Tenancy Act be allowed.