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Madras High Court · body

2009 DIGILAW 1937 (MAD)

M. Nandagopal v. R. Thangarasu & Others

2009-06-26

K.K.SASIDHARAN

body2009
Judgment :- 1. The first respondent in I.A.No.118 of 2003 in O.S.No.437 of 2000 on the file of the learned Subordinate Judge, Tinivarur, is the petitioner in this Civil Revision Petition. Background facts: 2. The Suit in O.S.No.77 of 1994 was filed by the respondents 1 and 2 against the revision petitioner and others before the Trial Court praying for a decree of partition to divide the suit property into 60 shares and to allot six such shares to them. The Suit was decreed and a preliminary decree was passed. 3. Subsequently, final decree proceedings were initiated in I.A.No.171 of 2000 and an Advocate Commissioner was appointed to partition the property. As per the report of the Advocate Commissioner, it was not possible to partition the property by metes and bounds. 4. The contesting respondent has filed an Application in I.A.No.118 of 2003 to auction the property and to divide the proceeds. The petitioner was not agreeable for such a course of action. However, the learned Trial Judge ordered for public auction. In such circumstances, the petitioner has come forward with this Revision Petition. 5. The learned counsel for the first respondent, would submit that the first respondent has no objection to auction the property among the co-owners. 6. The petitioner is having 2/3 shares in the suit property. Respondents 1 and 2 together got only 1/3 shares. The suit property is having only an area of 2129 sq.ft. Therefore, it was reported by the Advocate Commissioner that it was not possible to divide the property by metes and bounds. The petitioner as well as respondents 1 and 2 are coowners of the suit property. The revision petitioner being the major sharer has opted for sale among the sharers. Concept of partition: 7. The Partition Act, 1893 deals with division of property both by traditional method of division by metes and bounds as well as by sale. Section 2 of the Act empowers the Court to take recourse to the method of sale and distribution of sale proceeds among the shareholders. The Court was not expected to order sale as a matter of course. Section 2 of the Act empowers the Court to take recourse to the method of sale and distribution of sale proceeds among the shareholders. The Court was not expected to order sale as a matter of course. There should be materials before the Court to come to a positive conclusion that on account of the nature of the suit property or of the number of shareholders or on account of any other special circumstances, it would be difficult to divide the property by metes and bounds and the sale of the property and distribution of proceeds among the shareholders would be more beneficial to the parties. When the Court arrives at a conclusion that the property was impartible, the shareholders would be at liberty to apply for sale of the property and to distribute the proceeds. Therefore, the Court is given a discretionary power to order sale of the property. The discretion has to be exercised to do justice to the shareholders and the attempt of the Court must be for an equitable distribution of proceeds to the greater advantage of the parties. 8. When the Court takes a decision to sell the property as provided under Section 2, it would enable any of the shareholders to apply for permission to purchase the property at a valuation, the share or shares of the party requesting for such sale. In such an event, the Court was obliged to value the share and to make an offer to the party at such price duly determined. A conjoint reading of Sections 2 and 3 would show that the right to approach the Court to purchase the property at a value to be fixed by Court under Section 3 arises only in case of a request made by a sharer to sell the property in public sale. Section 3 further provides that in the event of a claim made by two or more shareholders to purchase the property, the Court shall order sale of the share to the shareholder who offers to pay the highest price, which should be above the valuation determined by the Court. 9. Section 3 of the Partition Act plays a significant role in the process of partition of the family property. 9. Section 3 of the Partition Act plays a significant role in the process of partition of the family property. Section 2 enables shareholders to apply for public sale of the property and in case of allowing such prayer by the Court, the property would go to the hands of strangers, to the detriment of other sharers. It would also affect the sentiments of other sharers for more than one reason. Therefore, Section 3 comes to the rescue of the other shareholders to avoid public sale and the consequential purchase of the property by total strangers to the family. 10. Therefore, when there was an offer by a shareholder to purchase the property at the rate to be determined by the Court, the Court was bound to consider the request. There is no question of Court rejecting the said request in view of Section 3 of the Partition Act. The proposal mooted by a shareholder to sell the property by way of public sale comes to an end by the counter proposal of the shareholders to purchase the property invoking Section 3 of the Partition Act. 11. The Supreme Court in Rani Aloka Dudhoria and Ors. v. Goutam Dudhoria and Ors., 2009 (3) Scale 865 , considered the concept of partition and the sale among the shareholders and held thus: Legal Position: "68. When a property is put to auction in a Suit for partition, the provisions of the Partition Act, indisputably, shall apply. 69. Section 2 of the Partition Act, 1893 provides that whenever in a Suit for partition in which, if instituted prior to the commencement of the Act, a Decree for partition might have been passed, it appears to the Court that, by reason of the nature of the property to which the Suit relates, or of the number of the shareholders therein, or of any other special circumstance, a division of the property cannot reasonably or conveniently be made and that a sale of property and distribution of the processes would be more beneficial for all the shareholders, the Court may, direct sale thereof subject to the condition that the request therefore had come from a shareholder or shareholders interested individually or collectively to the extent of one moiety or upwards. What therefore was necessary is that there should be a request from a shareholder; a formal prayer to that effect may not be necessary; a positive finding that the property is incapable of division by metes and bounds would be necessary and that the property cannot be reasonably or conveniently be partitioned. 70. Section 3 of the Act envisages sale of the property within the shareholders. It unlike the provisions of the Code of Civil Procedure, does not debar a shareholder from taking part in auction inter cilia on the premise that the shareholder may be interested in keeping the property to himself. A balance must be struck in regard to the individual interest of the shareholder having regard to the conflicting interest in the respective bids vis-a-vis the value of the property." 12. The Supreme Court in Rani Aloha Dudhorias case while considering the provisions of the Partition Act referred to an earlier Judgment of the Supreme Court in R. Ramamurthi Iyer v. Raja V. Rajeswara Rao, 1972 (2) SCC 721 , wherein it was held thus: "The scheme of Sections 2 and 3 apparently is that if the nature of the property is such or the number of shareholders is so many or if there is any other special circumstance and a division of the property cannot reasonably or conveniently be made the Court can in its discretion, on the request of any of the shareholders interested individually or collectively to the extent of one moiety or upwards, direct a sale of the property and distribute the proceeds among the shareholders. Now where a Court has been requested under Section 2 to direct a sale any other shareholder can apply for leave to buy at a valuation the share or shares of the party or parties asking for sale. In such a situation it has been made obligatory that the Court shall order a valuation of the share or shares and offer to sell the same to the shareholder who has applied for leave to buy the share at a price ascertained by the Court. In such a situation it has been made obligatory that the Court shall order a valuation of the share or shares and offer to sell the same to the shareholder who has applied for leave to buy the share at a price ascertained by the Court. In other words if a plaintiff in a Suit for partition has invoked the power of the Court to order sale instead of division in a partition Suit under Section 2 and the other shareholder undertakes to buy at a valuation the share of the party asking for sale the Court has no option or choice or discretion left to it and it is bound to order a valuation of the share in question and offer to sell the same to the shareholder undertaking or applying to buy it at a valuation. The purpose underlying the Section undoubtedly appears to be to prevent the property falling into the hands of third parties if that can be done in a reasonable manner. It would appear from the Objects and Reasons for the enactment of the Partition Act that as the law stood the Court was bound to give a share to each of the parties and could not direct a sale or division of the proceeds. There could be instances where there were insuperable practical difficulties in the way of making an equal division and the Court was either powerless to give effect to its decree or was driven to all kinds of shifts and expedients in order to do so. The Court was, therefore, given a discretionary authority to direct a sale where a partition could not reasonably be made and the sale would, in the opinion of the Court, be more beneficial to the parties. But having regard to the strong attachment of the people in this country to their landed possessions the consent of the parties interested at least to the extent of a moiety in the property was made a condition precedent to the exercise by the Court of the new power. At the same time in order to prevent any oppressive exercise of this privilege those shareholders who did not desire a sale were given a right to buy the others out at a valuation to be determined by the Court. 81. As regards construction of Section 3 of the Act, it was held: “... At the same time in order to prevent any oppressive exercise of this privilege those shareholders who did not desire a sale were given a right to buy the others out at a valuation to be determined by the Court. 81. As regards construction of Section 3 of the Act, it was held: “... The language of Section 3 of the Partition Act does not appear to make it obligatory on the Court to give a positive finding that the property is incapable of division by metes and bounds. It should only "appear" that it is not so capable of division. It has further been contended that the respondent had maintained throughout that the property was capable of division. He could not, therefore, take advantage of the provisions of the Partition Act…….” 13. The petitioner being the majority shareholder was justified in his contention that the property should be put to sale among the shareholders. It is not permissible for the minor shareholders to thrust upon the major shareholder of their decision to go for public sale, when the intention of the minor shareholder was to sell the property in public auction, thereby enabling strangers to take part in the auction and to purchase the property. 14. The first Respondent has opted for the sale of the suit property. Obviously it was a request made within the meaning of Section 2 of the Partition Act. Immediately, the petitioner made a request to auction the property among the sharers. As observed by the Honble Supreme Court in Rani Aloka Dudhoria and Ors. v. Goutani Dudhoria and Ors., 2009 (3) Scale 865 , when a property is put to auction in a Suit for partition, the provisions of Partition Act shall apply. Therefore, the learned Judge was not justified in rejecting the request made by the petitioner and to proceed with the proposal of public sale. It is evident from the proceedings that the learned Trial Judge failed to exercise the discretion properly and in accordance with the legal principles. To sum up: 15. In the result, the order dated 012. 2003 in I.A.No.118/2003 in O.S.No.437/2000 is set aside. The learned Trial Judge is directed to conduct auction among the shareholders as provided under Section 3 of the Partition Act. No costs. 16. To sum up: 15. In the result, the order dated 012. 2003 in I.A.No.118/2003 in O.S.No.437/2000 is set aside. The learned Trial Judge is directed to conduct auction among the shareholders as provided under Section 3 of the Partition Act. No costs. 16. Since, the Suit is of the year 1994 and as the final decree proceedings are also pending for a considerable period, the learned Trial Judge is requested to dispose of the final decree proceedings, within a period of five months from the date of receipt of copy of this order.