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2009 DIGILAW 4801 (MAD)

Dr. Prasanna Venkatachalam v. Akkamma & Others

2009-11-10

M.CHOCKALINGAM, V.PERIYA KARUPPIAH

body2009
Judgment :- M. Chockalingam, J. This judgment shall govern both these two intra court appeals, which have arisen from a common order dated 21.08.2009 of the learned single Judge of this Court made in Application No.2850 of 2009, seeking sale of the petition mentioned property to the applicant by the respondents at the prevailing market rate as per the right of preemption devolving on the applicant under Sections 2 and 3 of the Indian Partition act, 1893, while Application No.1244 of 2001 was for the appointment of an Advocate Commissioner for the purpose of dividing the suit property. 2. These appeals have been brought forth under the following facts and circumstances: (a) The appellant/plaintiff filed C.S.No.481 of 1998 for partition in respect of the plaint mentioned properties against his mother-the 1st defendant, and the other defendants, who were the son and daughter-in-law of the 1st defendant. Pursuant to the preliminary decree dated 02.08.1999, the plaintiff was entitled to 1/3rd share while the 1st defendant and her son, the 2nd defendant would be entitled to 1/3rd share each in all the properties including E Schedule, the subject matter in question. E Schedule property is situate in No.4, Rutland Gate, 4thStreet, Madras-6, measuring about 10 grounds and 600 sq.ft with superstructure. Pending final decree application, an Advocate commissioner was appointed for making division of the suit property by metes and bounds. The Commissioner filed a report stating that the property was measuring to an extent of 24,876 sq.ft; the built up plinth area in the ground floor was measuring to an extent of 3,176 sq.ft; the portico was measuring 336 sq.ft; the plinth area in the rear side was 1,319 sq.ft; the area covered by A/c sheet was 160 sq.ft; the built up plinth area in the first floor was measuring to an extent of 2,367 sq.ft. Apart from that, the Commissioner noticed that there was a thatched shed in the rear side measuring to an extent of 305 sq.ft. The entire house was also used for residential purposes. The Engineer, who inspected the property, valued the building at Rs.19,19,511/- and the land value was estimated at Rs.6,35,27,085/-. Apart from that, the Commissioner noticed that there was a thatched shed in the rear side measuring to an extent of 305 sq.ft. The entire house was also used for residential purposes. The Engineer, who inspected the property, valued the building at Rs.19,19,511/- and the land value was estimated at Rs.6,35,27,085/-. The Advocate Commissioner has observed that the property was to be divided among the plaintiff, the 1st defendant and the 2nd defendant equally; that the building was not having any much value as the construction was very old; that the width of the site on the west was about 108 ft.and the length of the site was 222 ft; that the value of the building could be taken as Rs.1 lakh and the cumulative value of the property was Rs.31.6 crores. (b) After filing of the Commissioner’s report, the 1st defendant, the mother, filed Application No.2850 of 2009 under Sections 2 and 3 of the Partition Act, 1893, alleging that the division of the property would diminish the total value; that it was a dwelling house; that she had enough financial resources to purchase the same and the best method of using the entire property was by selling, since making a division would be diminished to the interest of all the sharers and hence, in exercise of right of preemption, she has filed the said application and expressed her readiness to buy the property at the prevailing market rate. (c) Though the 2nd and 3rd respondents, namely, her son and his wife, filed a memo that they had no objection in allowing the application, the 1st respondent therein/ plaintiff, who is the appellant herein, vehemently contested the application, stating that the property could be divided horizontally running to north to south; that the property was capable of division taking into account 1/3rd share of each of the parties; that it was a residential house, where his father along with the family resided and hence, the property should not be sold; that when a property was incapable of division, the question of a sale would arise; that the petitioner/1st defendant had no financial resources to purchase and hence, the question of her exercising a preemptive right did not arise; that the applicant got only 1/3rd share and not holding a share over moiety of the property and hence, the application was not maintainable. He has further averred that he was entitled to exercise the right of purchase as available under section 3 of the Indian Partition Act. (d) Countering the above averments, the applicant mother filed a reply. (e) The learned single Judge, who took up the applications for consideration, while closing the application for appointment of Advocate Commissioner, has allowed the application of the 1st defendant, made the following order: "20. Since the applicant had exercised her right of preemptive purchase and she being the mother and also the second and third respondents supporting her stand, it is just and proper that she should be allowed to purchase the property in its entirety. The valuation report of M/s.Prashant Engineers, dated 17. 2009 produced by the applicant not contradicted by R1 clearly takes into account the market value as well as the value of the building. The value is assessed at Rs.31.6 Crores. Even for argument sake if the first respondent is given his share in ‘A’ as per the division made by the Commissioner, which is front portion, the value fixed is Rs.12.07 Crores. 21. Since respondents 2 and 3 had agreed to sell the property to the applicant, the only order to be passed is that the applicant is entitled to purchase the property from the respondents. It is enough that the applicant pays a sum of Rs.12.07 Crores to the first respondent and Rs.10.53 Crores to the second and third respondents. The applicant is entitled to have the property at her disposal. If such payments are made within a period of three months, the applicant is entitled to enjoy the whole property at her own disposition. The partition of ‘E’ Schedule property should be made accordingly". Aggrieved over the same, the plaintiff has brought forth these appeals. .3. The applicant is entitled to have the property at her disposal. If such payments are made within a period of three months, the applicant is entitled to enjoy the whole property at her own disposition. The partition of ‘E’ Schedule property should be made accordingly". Aggrieved over the same, the plaintiff has brought forth these appeals. .3. Advancing the arguments on behalf of the appellant/plaintiff, the learned counsel would submit that the learned single Judge has made an erroneous order in ordering sale in favour of the 1st respondent; that the object of the Partition Act, 1893, as well as the Hindu Succession Act, 1956, was not allowed the family property to go into the hands of third parties and that the Courts should endeavour giving share to each of the parties and would not direct the sale of the property or division of the proceeds except when the division of the property cannot be reasonably or conveniently made; that in the instant case, taking into consideration the measurements of the property, which was more than 24,000 sq.ft, it can be put division reasonably and conveniently also; that the property is neither too small nor there are number of shareholders, which would render the division by metes and bounds irrational or inconvenient; that under such circumstances, the court should have rejected the plea of the 1st respondent for sale and ordered division of the property as per the Commissioner’s report; that it is not correct to state that the property if divided would lose its commercial value and the rights of the parties to get their divided share in the family property when the same is divisible should not be ignored; that the commercial value of the undivided property can neither be a special circumstance justifying the sale of the property nor can outweigh the rights of the parties and the sentimental values attached by them with the family property and that the Commissioner, who was appointed by the Court, has filed a clear report that the subject property is capable of division, by taking into consideration the nature of the property, the number of share holders and the absence of any special circumstance and in such a case, the court should not have ordered for sale of the property, which is against law and equity. 4. 4. Added further the learned counsel that it is not correct to state that if the property is divided, the rear portion would get reduced value and it would not be beneficial to all the parties; that the subjective satisfaction of the Court that the property was incapable of division was a pre-requisite for invoking Section 2 of the Partition Act by any shareholder; that the application cannot be maintained conjointly under sections 2 and 3 of the Partition Act since each of them operates in different spheres and circumstances and hence, sections 2 and 3 of the Partition Act cannot be invoked simultaneously by the very same party; that the 1st respondent/1st defendant while has invoked section 2 of the Partition Act, was barred from making a request to purchase under Section 3 of the Act; that once the 1st respondent has invoked section 2 for sale and distribution of the proceeds according to the respective shares under Section 2 of the Partition Act, any other share holder alone can invoke section 3 of the Partition Act or purchasing the share or shares of the parties asking for the sale and hence, ordering sale in favour of the party, who was asking for the sale of the property, was against the statutory provisions; that even assuming that the property was available for sale, all respondents have opted for sale; that the appellant also was entitled to make an application under section 3 of the Partition Act; that under Section 22 of the Hindu Succession Act, the preemptive right of purchase would come into play only in the event of an offer or proposal to sell his/her share by one of the heirs and not otherwise and when the appellant did not offer or propose to sell any share, there was no question of the 1st respondent or any other heir to purchase the appellants share in the property and that the appellant has also offered to purchase the share without prejudice to his rights to get division of the property by metes and bounds and hence, following the procedure laid down under section 3 of the Partition Act, the Court should have ordered sale of the property in favour of the appellant. .5. .5. Added further that the Court do not have a discretionary jurisdiction to order sale of other sharers’ interest, upon application of any interested party, notwithstanding the dissent or the disability of any other party, even if it appears to the Court that it would be more beneficial for the parties interested; that the 1st respondent who was not even an income tax assessee would be only sponsored by a third party developer and since in law she cannot directly offer the joint property to third parties and hence, she has targeted the appellant who wanted to retain the property and she has made an attempt indirectly which she could not achieve directly and hence, the learned counsel concluded his arguments stating that the property could be divided among the sharers along with the superstructure as exists today or if it cannot be divided with the superstructure, the same could be removed and vacant site could be divided into three, allowing one share to him and if the Court takes the view that the property is indivisible and the sale of the property alone would be more beneficial to all the sharers, then the property has to be sold to the plaintiff/appellant since he is entitled to exercise the right of preemption; that the total value of the property, according to the plaintiff, was Rs.40 crores and he was willing to pay the 1st and 2nd defendants each 1/3rd of the value and hence, the order of the learned single Judge ordering of sale of the property in favour of the 1st defendant has got to be set aside. 6. The learned senior counsel appearing for the 1st respondent/1st defendant, while advancing his arguments in his sincere attempt of sustaining the order of the learned single Judge, would submit that the property cannot be divided conveniently or reasonably and hence the property has got to be sold. Under such circumstances, the 1st defendant filed an application in exercise of right of preemption available under Partition Act and she has got sufficient financial resources. Under such circumstances, the 1st defendant filed an application in exercise of right of preemption available under Partition Act and she has got sufficient financial resources. Since the appellant has not even filed an application seeking to exercise his alleged right of preemption, he cannot be permitted to say that he was entitled to exercise the right of pre-emption; that what were all done by the appellant by filing a counter to the application filed by the 1st respondent in whose favour the learned single Judge has made an order of sale, the learned single Judge has attributed the reasons why it should be sold in favour of the 1st respondent; that the second son of the 1st defendant, namely, the 2nd defendant along with his wife, the 3rd defendant, has filed a memo that they have no objection for the application being allowed; that the learned single Judge has also fixed the value of the property, as fixed by the Engineer, namely, Rs.36 Crores and hence, the appeal was devoid of merit and hence, the appeals have got to be dismissed. Added further the learned senior counsel that if the Court is of the opinion that the market value of the property would be high, the 1st defendant is ready and willing to purchase the property at Rs.40 crores and is ready to pay the share amount to the other parties. 7. The learned counsel appearing for the 2nd and 3rd respondents/2nd and 3rd defendants adopted the arguments of the learned senior counsel for the 1st respondent and would submit that his client, the 2nd respondent, is willing to purchase the property at Rs.40 crores and ready to pay the respective shares to the plaintiff and the 1st defendant. 8. The Court has paid its anxious consideration on the submissions made by the learned counsel on either side and has considered all the available materials. 9. At the outset, it would be more apt and appropriate to reproduce Sections 2 and 3 of the Partition Act, 1893, which would be relevant for the purpose of this Case, as follows; "2. The Court has paid its anxious consideration on the submissions made by the learned counsel on either side and has considered all the available materials. 9. At the outset, it would be more apt and appropriate to reproduce Sections 2 and 3 of the Partition Act, 1893, which would be relevant for the purpose of this Case, as follows; "2. Power to Court to order sale instead of division in partition Suits: Whenever in any suit for partition in which, if instituted prior to the commencement of this Act, a decree for partition might have been made, 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 the property and distribution of the proceeds would be more beneficial for all the shareholders, the Court may, if it thinks fit, on the request of any of such shareholders interested individually or collectively to the extent of one moiety or upwards, direct a sale of the property and a distribution of the proceeds. 3. Procedure when sharer undertakes to buy:- (1) If, in any case in which the Court is requested under the last foregoing section to direct a sale, any other shareholder applies for leave to buy at a valuation the share or shares of the party or parties asking for a sale, the Court shall order a valuation of the share or shares in such manner as it may think fit and offer to sell the same to such shareholder at the price so ascertained, and may give all necessary and proper directions in that behalf. .(2) If two or more shareholders severally apply for leave to buy as provided in subsection (1), the Court shall order a sale of the share or shares to the shareholder who offers to pay the highest price above the valuation made by the Court. .(3) If no such shareholder is willing to buy such share or shares at the price so ascertained, the applicant or applicants shall be liable to pay all costs of or incident to the application or applications." 10. .(3) If no such shareholder is willing to buy such share or shares at the price so ascertained, the applicant or applicants shall be liable to pay all costs of or incident to the application or applications." 10. As could be seen from the available materials and also the submissions made, an immovable property shown as E schedule property in C.S.No.481 of 1998, a suit for partition, was measuring to an extent of 10 grounds and 600 sq.ft.along with the superstructure. An Advocate Commissioner appointed by the Court has measured the property and found that the total extent was 24876 sq.ft. The property measures east to west 222 sq.ft. and north to south 108 sq.ft, within which five decades old house property, a residential house, is situate. It is an admitted position that the entire property with the above measurements has got a opening only on the west with the width of 108 sq.ft.north to south and if the property is divided horizontally east to west, it would become a narrow space and hence, the Commissioner has suggested that the property could be divided horizontally running from north to south into 3 parts as A, B, and C having an extent of 8289 sq.ft., 8295 sq.ft., and 8292 sq.ft., each respectively, leaving a common passage on the southern side to enter into the family. Placing reliance on the Commissioner’s report, the appellant puts forth his case that the property could be divided reasonably and conveniently. 11. It is not in controversy that as on today, there is a residential house. Even if a horizontal division of the property as it exists is made some of the portions have got to be demolished and apart from that, the property could not be put to convenient enjoyment and hence, the division of the property as it exists cannot be done since it would be detrimental to the interest of the sharers. A division of the property horizontally into 3 parts, which would, as suggested by the Commissioner, result in the removal of the existing superstructure cannot, in the opinion of the Court, be made. In a given case like this, a division of the property is not material, but whether such a division can reasonably or conveniently be made. A division of the property horizontally into 3 parts, which would, as suggested by the Commissioner, result in the removal of the existing superstructure cannot, in the opinion of the Court, be made. In a given case like this, a division of the property is not material, but whether such a division can reasonably or conveniently be made. If a division, as suggested by the appellant is made, one of the parties would get the front portion adjacent to the main road, while the two others would take the rear side and hence, the value of the shares if allotted to the parties would not be equal. The same would lead to inequitable division of the property. Apart from that, if so divided, the value of the property which is situate in a prime area, considerably would lose its value and, hence, in the instant case, it is noticed by the Court that the property cannot be reasonably divided or it could be conveniently enjoyed, if so divided. 12. The parties have openly expressed their aversion and displeasure against each other. Under such circumstances, even a direction to pay ovelty by one party to the other parties will not give a quietus. It is true, in a case of partition, the Court is bound to give a share to each of the parties and ordinarily, could not direct the sale or division of the proceeds since the legislative indent under sections 2 and 3 of the Partition Act, 1893, was to prevent the property going to the hands of third parties. In a given case, where the property could not be divided reasonably or conveniently, the Court has to exercise its discretion to direct the sale. In the instant case, the sale of the property to third party does not arise for consideration for two reasons; firstly, all the parties have expressed strong sentimental attachment since it was a family property; and secondly, in exercise of the right of preemption, the 1st defendant mother has filed an application under sections 2 and 3 of the Partition Act. 13. The contention put forth by the learned counsel for the appellant that the 1st respondent/1st defendant mother has lost her right to purchase in view of her application under section 2 of the Partition Act, cannot be countenanced. 13. The contention put forth by the learned counsel for the appellant that the 1st respondent/1st defendant mother has lost her right to purchase in view of her application under section 2 of the Partition Act, cannot be countenanced. In her affidavit filed in support of the application A.No.2850 of 2009, she has stated as follows: "5. I submit that as the Report is not feasible and I have my objections in accepting in toto, I am moving this application to bring the residential property in Schedule ‘E’ for sale and divide the sale proceeds according to our shares. It is our dwelling house. I have enough financial resources to purchase it. Hence I am filing this application invoking my right of preemption under sections 2 read with 3 of the Partition Act, 1893 for the sale of the said property to me. I am ready to purchase the same at the prevailing market rate so that the other sharers can be paid their proportionate share in the said property. As a co-sharer I may be given the right to exercise my right of preemption and be allowed to buy the entire property according to the market price and the value arrived by the Court and I am ready to deposit the price so ordered by this Hon’ble Court. The property may be sold to me for its beneficial enjoyment". From the very reading of the above averments, it will be quite clear that the 1st defendant/1st respondent mother has made her application in order to express her willingness for purchase of the property in question invoking Section 2 read with section 3 of the Partition Act, 1893 and hence, the contention put forth by the learned counsel for the appellant that the 1st defendant, having invoked section 2 of the Partition Act for sale of the property, lost her right for purchase of the property and hence, the appellant/plaintiff got a vested right to exercise his right of pre-emption, cannot be countenanced in law. Neither the 1st defendant has lost her right nor has the appellant invoked his alleged right of pre-emption under section 3 of the Partition Act, 1893. Neither the 1st defendant has lost her right nor has the appellant invoked his alleged right of pre-emption under section 3 of the Partition Act, 1893. The learned counsel for the appellant took the Court to the averments made in the counter where he has stated as follows: "8.In the event of this Hon’ble Court directing sale, I am entitled to exercise my right under Section 3 of the Partition Act. But even now, no application was forthcoming from the appellant, as found therein". This would not suffice. 14. At the time when the appeal was taken up for enquiry, all the three parties, namely, the appellant, the 1st defendant and also the 2nd defendant had expressed their sentiments attached to the property so that it is clear that they want to retain the property and not to be sold to the third parties. The Engineer, who was appointed pursuant to the orders from a learned single Judge, has valued the property at Rs.36 crores. Taking into consideration the extent of the property and the place where the property situates, the Court is of the considered opinion that the value fixed by the Engineer was low. It is true that the Court is not making a sale of the property; but at the same time, a duty is cast upon the Court to determine the reasonable market value of the property. When the appellant came forward to purchase the property at Rs.40 crores, both the 1st and 2nd defendants, who are respondents 1 and 2, also expressed their willingness to purchase the property for the said price. Allowing any one of the parties to purchase the property at a low price, would be detrimental to the sharers. In order to ensure the distribution of the proceeds more beneficial to the sharers, instead of fixing the market value, it can be left open to the parties to express the price for which they offer to purchase, in a sealed cover and place before the Court, which could be opened by the Court in the presence of the parties and the highest offer so made among the parties, would be fixed as the market value of the property and necessary orders for the deposit of the sale price towards the share of the other two sharers would be made. 15. 15. Hence, under the stated circumstances, all the parties are directed to place their sealed covers before the Court on 111. 2009 expressing their offer to purchase the property. Call on 111. 2009. 2.This Court by its order dated 11. 2009, issued a direction for the parties to place before the Court sealed covers mentioning their offer as to the purchase price of the property in question, and the matter was actually posted on 111. 2009. On that day, the Counsel for the defendants 1 and 2 placed before the Court two sealed covers, while the appellant/plaintiff did not. The learned Counsel for the appellant took time to get instructions from his client, and accordingly the matter is posted this day i.e., 111. 2009. 3. When the matter is taken up this day, the appellant/plaintiff did not file his sealed cover putting forth his offer. But, the learned Counsel would inform the Court that the appellant/plaintiff is not to put forth his offer. 4. The defendants 1 and 2 filed two sealed covers before the Court, and they are opened in the presence of all Advocates. From the offers, it could be seen that the first defendant has offered to purchase the property for Rs.40,50,00,000/-, while the second defendant has offered to purchase the property for Rs.42,00,00,000/-. In the instant case, the Court thought it fit to call for the offers from the parties so that the property could be purchased by any one of the three persons namely the appellant, the first defendant and the second defendant. It remains to be stated that all the parties were given the same opportunity for filing the sealed covers by order dated 11. 2009, calling the case on 111. 2009. On 111. 2009, the defendants 1 and 2 have placed the sealed covers; but, the appellant/plaintiff did not. Hence this Court was of the view that in order to give further opportunity to the appellant, the matter could be posted this day. Now, it is abundantly clear that though sufficient opportunity was given to the appellant/plaintiff, he did not avail the same, and hence it has got to be taken that the appellant is not to put forth his offer before the Court. Now, it is abundantly clear that though sufficient opportunity was given to the appellant/plaintiff, he did not avail the same, and hence it has got to be taken that the appellant is not to put forth his offer before the Court. Under the circumstances, this Court has to fix the price of the property as Rs.42,00,00,000/-(Rupees forty two crores only) since it is the highest offer made by the second defendant. Accordingly, it is fixed. 5. The second defendant is directed to either deposit the respective shares of the first defendant and the plaintiff namely 1/3rd share each, into the Court or hand over the share amount to the respective parties within a period of 12 weeks herefrom, get proper acknowledgement and produce before the Court. On such deposit or payment as the case may be, being made, the appellant and also the first defendant are directed to execute necessary documents therefor in favour of the second defendant and also hand over possession of the property to the second defendant within a period of four weeks therefrom. In the event of non-compliance of any part of the order thereof, the same could be brought to the notice of the Court for necessary orders. 6. It is also brought to the notice of the Court by the learned Counsel for the defendants that a particular room is kept under the lock and key of the Court where movables belonging to the family are kept. This Court is of the opinion that the parties could approach the Court for necessary orders in that regard after the above order is performed. 7. It is also made clear that since these appeals have been brought forth only in respect of "E" Schedule property attached to the plaint, there is no impediment for either side to put forth their respective contentions in respect of the division of the other items of properties before the trial Court on the final decree application. 8. Accordingly, both these original side appeals are disposed of. No costs. Consequently, connected MP is closed. 9. The Registrar General is directed to keep both the offers made by the defendants 1 and 2, in safe custody of the Court.