IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR THURSDAY, THE 3RD JULY 2008 / 12TH ASHADHA 1930 WP(C).No. 4546 of 2007(N) ------------------------- OS.224/1999 of III ADDL.SUB COURT, KOZHIKODE .................... PETITIONERS: ---------------------- 1. K.C.SATHI LAKSHMANAN, W/O.LAKSHMANAN, POOVADAN HOUSE, RED CROSS ROAD, KOZHIKODE. 2. K.C.PRAVEEN, S/O.K.C.SATHI LAKSHMANAN, POOVADAN HOUSE, RED CROSS ROAD, KOZHIKODE. BY ADV. SRI.GOVIND K.BHARATHAN (SR.) SRI.SARVOTHAMAN SRI.PRABIN BABU RESPONDENTS: 1. SRI.P.C.MOHANDAS, S/O.KUMARAN, R.V.NAGAR, NO.192, UNION CARBIDE COLONY, CHENNAI- 51. 2. SRI.P.C.MITHRAN, S/O.KUMARAN, PRAKASH BHAVAN, KARUVISSERY, KOZHIKODE TALUK. 3. NAYANA D/O.LATE NALINI BHARATHAN, PRAKASH BHAVAN, KARUVISSERY, KOZHIKODE TALUK. 4. ANITHA, D/O.LATE NALINI BHARATHAN, PRAKASH BHAVAN, KARUVISSERY, KOZHIKODE TALUK. 5. DHANYA, D/O.LATE NALINI BHARATHAN, PRAKASH BHAVAN, KARUVISSERY, KOZHIKODE TALUK. 6. P.C.PRASANNA BHARATHAN, D/O.KUMARAN, VALLUVAKANDY HOUSE, PALLIKKUNNU P.O., KANNUR. Kss ..2/- ...2..... WPC.NO.4546/2007 N 7. VEEJA, D/O.P.C.PRASANNA BHARATHAN, VALLUVAKANDY HOUSE, PALLIKKUNNU P.O., KANNUR. 8. SHEEMA, D/O.P.C.PRASANNA BHARATHAN, VALLUVAKANDY HOUSE, PALLIKKUNNU P.O., KANNUR. 9. VIPIN, S/O.P.C.PRASANNA BHARATHAN, VALLUVAKANDY HOUSE, PALLIKUNNU P.O., KANNUR. 10. P.C.SOMANATH, S/O.KUMARAN, BHEL TOWNSHIP, P3/519, TRICHY-11, TAMILNADU. 11. SREEDEVI VENUGOPAL, D/O.RAGHAVAN, PALM AVENUE, NEAR MANIKKOTH HOUSE, WEST TALAPPU, KANNUR-1. 12. ANOOP, S/O.SREEDEVI VENUGOPAL, PALM AVENUE, NEAR MANIKKOTH HOUSE, WEST TALAPPU, KANNUR-1. 13. SHEEJA, D/O.SREEDEVI VENUGOPAL, PALM AVENUE, NEAR MANIKKOTH HOUSE, WEST TALAPPU, KANNUR-1. 14. AJAYAN, S/O.SREEDEVI VENUGOPAL, PALM AVENUE, NEAR MANIKKOTH HOUSE, WEST TALAPPU, KANNUR-1. 15. K.C.VIDYA. D/O.KC.SATHI LAKSHMANAN, POOVADAN HOUSE, RED CROSS ROAD, KOZHIKODE. 16. K.C.NAVEEN, S/O.K.C.SATHI LAKSHMANAN, POOVADAN HOUSE, RED CROSS ROAD, KOZHIKODE. 17. LALITHA NARAYANAN, D/O.KUKNHIRAMAN, KASMIKANDY COMPOUND, BANK ROAD, KOZHIKODE. ( D I E D) 18. NIKHILESH, S/O.LALIHA NARAYANAN, KASMIKANDY COMPOUND, BANK ROAD, KOZHIKODE. 19. AKHILESH, S/O.LALITHA NARAYANAN, KASMIKANDY COMPOUND, BANK ROAD, KOZHIKODE. Kss ..3/- ...3... WPC.NO.4546/2007 N 20. K.C.INDRASENAN, S/O.KUNHIRAMAN, KASMIKANDY COMPOUND, BANK ROAD, KOZHIKODE. 21. JAYALAKSHMI MADHAVAN, D/O.KUNHIRAMAN, KASMIKANDY COMPOUND, BANK ROAD, KOZHIKODE. 22. SREERAM, S/O.JAYALAKSHMI MADHAVAN, KASMIKANDY COMPOUND, BANK ROAD, KOZHIKODE. 23. DEEPA, D/O.JAYALAKSHMI MADHAVAN, KASMIKANDY COMPOUND, BANK ROAD, KOZHIKODE. 24. MADHU RAM, S/O.JAYALAKSHMI MADHAVAN, MASAR, MUTSU ENGINEERING SHIP BUILDING COMPANY, P.B.NO.1838, JUBAVIL, 31951, K.S.A. 25. MANORAM, S/O.JAYALAKSHMI MADHAVAN, KASMIKANDY COMPOUND, BANK ROAD, KOZHIKODE. 26. VIMALA CHANDRASEKHAR, D/O.KUNHIRAMAN, KSMIKANDY COMPOUND, BANK ROAD, KOZHIKODE. 27. REEJA, D/O.VIMALA CHANDRASEKHAR, KASMIKANDY COMPOUND, BANK ROAD, KOZHIKODE. 28. MAHESH, S/O.VIMALA CHANDRASEKHAR, P.B.NO.2393, DUBAI, U.A.E. 29. RAKESH, S/O.VIMALA CHANDRASEKHAR, D/O.KUNHIRAMAN, KASMIKANDY COMPOUND, BANK ROAD, KOZHIKODE. 30. K.VIJAYA RAGHAVAN, S/O.KUMARAN, KARTHIKA, KACHERUY AMSOM DESOM.(EXPIRED) 31. C.V.DHARMARAJ, S/O.NARAYANAN, MOOLIYIL HOUSE, KALTEX JUNCTION, KANNUR-2. 32. C.V.RATHI, D/O.NARAYANAN, MOOLIYIL HOUSE, KALTEX JUNCTION, KANNUR-2. Kss ..4/- ...4.... WPC.NO.4546/2007 N 33. C.V.ARJUN, S/O.NARAYANAN, MOOLIYIL HOUSE, KALTEX JUNCTION, KANNUR-2.(EXPIRED) 34. M.V.MEERA, D/O.HARIDAS, MOOLIYIL HOUSE, KALTEX JUNCTION, KANNUR-2. 35. M.V.PREETHA, D/O.HARIDAS, MOOLIYIL HOUSE, KALTEX, JUNCTION, KANNUR-2. *ADDL.R36 TO R38 ARE IMPLEADED: R36. SARADA VIJAYA RAGHAVAN, KARTHIKA, BILATHIKULAM, CALICUT – 673 001. R37. LEKHA, D/O.SARADA VIJAYA RAGHAVAN, KARTHIKA, BILATHIKULAM, CALICUT – 673 001. R38. SHILA SETHURANI, 213-D-ORCHID, BEHIND JAIN TEMPLE, GOVANDI, MUMBAI – 400 088. (*ADDL.R36 TO R38 ARE IMPLEADED AS PER ORDER DTD. 3/07/2008 IN I.A.NO.9732/2007) ADV.SRI.C.P.MOHAMMED NIAS FOR R1 TO 7,10,11 SRI.A.SUDHI VASUDEVAN SRI.JOJO VARGHESE SMT.S.SHEEJA KUMARY(AYOOR) SRI.A.SUDHI VASUDEVAN FOR R24,28 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 23/06/2008 THE COURT ON 3/07/2008 DELIVERED THE FOLLOWING: Kss WPC.NO.4546/2007 N APPENDIX PETITIONER'S EXHIBITS: EXT.P1; COPY OF THE ORDER DTD. 04/12/2006 OF THE LEARNED 3RD ADDITIONAL SUB JUDGE, KOZHIKODE. EXT.P2: COPY OF TH DATED 16/12/2006 IN FDIA.761/03 IN O.S.224/1999 OF THE 3RD ADDITIONAL SUB JUDGE, KOZHIKODE. EXT.P3: COPY OF THE ORDER DTD. 10/01/2007 OF THE LEARNED 3RD ADDITIONAL SUB COURT, KOZHIKODE. RESPONDENT'S EXHIBITS: N I L /TRUE COPY/ P.S.TO JUDGE Kss M.SASIDHARAN NAMBIAR,J. =========================== W.P.(C) NO.4546 OF 2007 =========================== Dated this the 3rd day of July, 2008 JUDGMENT When there is no request as provided under section 2 of Partition Act, whether Court is competent to direct sale of the property by auction among the sharers or by public auction? Whether for an equitable and fair division of the property dehors of Partition Act court can direct sale of the property or is it mandatory to allot the property to one of the sharers with a direction to pay compensation to the other sharers if it is found that the property cannot be reasonably and conveniently be divided. These are the questions to be answered in this Writ Petition filed under Article 227 of the Constitution of India. 2. The facts are not complicated. O.S.224/1999 was instituted before Sub Court, Kozhikode for partition and separation of share of plaintiffs. As per the preliminary decree, it was found that W.P.(C) 4546/2007 2 plaint schedule property is available for partition and it is to be divided into 26 equal shares and plaintiffs are entitled to one share. So also defendants 5 to 8 together are entitled to one share. Plaintiffs filed I.A.761/2003 for passing a final decree in accordance with the preliminary decree.A Commission was appointed to divide the property. Commissioner submitted report stating that property cannot be divided into 26 equal shares as it is a residential plot having an extent of 15 cents comprised in survey No.253 of Kalathinkunnu Village of Kozhikode and is the residential building and its appurtenant land and it is not feasible or possible to divide the property into 26 shares. Defendants 5 to 8 then raised a claim that they have been residing in the building for the last 60 years and therefore the property is to be allotted to them. It was resisted by the other sharers including plaintiffs contending that defendant No.5 is owning a double storied residential building and W.P.(C) 4546/2007 3 allotment of the property to defendants 5 to 8 is not equitable. Learned Sub Judge found that the property cannot reasonably or conveniently divided and conducted an enquiry. As per order dated 4.12.2006 court directed defendants 5 to 8 to produce the title deed relating to their property having a double storied residential building owned by 5th defendant making it clear that on their failure to produce the document, property will be put to auction among the sharers and if so all the sharers would get their share in the sale proceeds. Finding that it is not feasible or possible to divide the property into 26 equal shares and defendants 5 to 8 did not produce the document as directed, as per order dated 16.12.2006, learned Sub Judge held that defendants 5 to 8 are not entitled to allotment of the property to themselves and the property is to be auctioned among all the sharers and posted the case for auction on 10.1.2007. On that day defendants 5 to 8 as one group and all others as another group W.P.(C) 4546/2007 4 participated in the auction. Defendants 5 to 8 offered to bid for a value of Rs.49,50,000/-. But the other group consisting of plaintiffs and other defendants offered to bid for Rs.50,00,000/- (fifty lakhs only). Learned Sub Judge accepted that offer being the highest and directed to deposit the amount by 12.2.2007. The amount as directed was deposited. By that time defendants 5 to 8 filed this petition to quash Ext.P1 to P3 orders and to direct the trial court to value the property and to allow petitioners to retain the property on payment of the value of the shares to the other sharers declaring that petitioners are entitled to retain the schedule property in which they have been residing uninterruptedly so as to preserve the residential house falling into the hands of strangers. 3. Learned senior counsel Sri.Govindh K. Bharathan appearing for petitioners relying on the commentaries of Partition Act by Basu (Fourth Edition) argued that Partition Act (hereinafter W.P.(C) 4546/2007 5 referred to as the Act) was enacted to preserve the family property falling into the hands of strangers and when it is shown that petitioners have been residing in the residential building for the last more than 60 years, in equity court should have allotted the property to the petitioners with a direction to deposit the value to be fixed by the Court on a valuation and directing division of that amount in proportion to the respective shares. It was argued that direction to sell the property in auction among the sharers is unjust and unfair. Relying on the decision (K.Subba Rao, C.J.) of High Court of Andhra Pradesh in R.Ramaprasada Rao v. R.Subbaramaiah (AIR 1958 A.P.647) which was relied on by the Apex Court in Badri Narain Prasad Choudhary v. Nil Ratan (AIR 1978 SC 845) it was argued that even when provisions of Section 2 and 3 of Act are not applicable, court has the inherent power to evolve an equitable method of W.P.(C) 4546/2007 6 division and auction among the sharers is not the right method. The learned senior counsel relying on the observations in Badri Narain Prasad Choudhary's case (supra) argued that when petitioners who are entitled to one share and the remaining 25 sharers are pitted against each other, and property is auctioned, petitioners could be easily outbid by the other sharers and in such circumstance, it is not an equitable or fair mode of division and instead court should have valued the property and directed petitioners to deposit the amount on such valuation and the orders of the learned Sub Judge are to be set aside. Relying on the decision of a learned single Judge of this Court in Krishnan v. Narayanan (2002 (3)KLT 165) it was argued that this court accepted the principle that sharers who are residing in the building are entitled to get the building allotted to them and the other sharers are only entitled to the value of the property to be W.P.(C) 4546/2007 7 assessed by the court and Exts.P1 to P3 orders are to be quashed. 4. Advocate Sri.Sudhi Vasudevan learned counsel appearing for plaintiffs supported by the learned counsel appearing for other defendants argued that Section 2 and 3 of the Act has no application to the facts of the case at all . It was argued that when petitioners are only entitled to 1/26 shares, they are not entitled to get the property allotted to them, especially when it is admitted that 5th defendant is owning a double storied residential building which is claimed to be occupied by her daughter 6th defendant. Learned counsel also argued that as per the allegations in the Writ Petition itself her sons defendants 7 and 8 are in Gulf and in such circumstance, petitioners cannot be heard to contend that they will be outbid by other sharers and in fact petitioners have better financial wherewithal. It was also argued that as per order dated 4.12.2006, court made it clear that if petitioners are having a residential W.P.(C) 4546/2007 8 building, they cannot claim allotment of the property and in that event the property will be sold among the sharers and the value divided and inspite of the direction to produce title deed in respect of their other residential building, petitioners did not produce the title deed as directed and therefore Ext.P2 order was passed on 16.12.2006 providing for auction among the sharers and auction was conducted on 10.1.2007 and petitioners participated in the auction and bid the property for Rs.49,50,000/- and in such circumstance, they are estopped from contending that they have no financial capacity to bid in the auction sale or that it is not a proper or just method of division and in such circumstance, petitioners are not entitled to challenge Exts.P1 to P3 orders. Relying on the decision of Chief Justice Subba Rao in Ramaprasad Rao v. Subbaramaiah ( AIR 1958 A.P.647) it was held that Court is competent to direct sale of the property among the sharers by auction and it is the most beneficial W.P.(C) 4546/2007 9 mode of division in the circumstance of the case and therefore writ petition is only to be dismissed. Learned counsel relying on the decision of a learned single Judge of this Court in Anthony Ammal v. Antony (1983 K.L.T. 645) which was approved by the Division Bench in Parangodan v. Lakshmikutty(1993 (2) KLT Case No.33) argued that when it is not feasible to divide the property by metes and bounds, the just and equitable method is to divide the property by auction between the sharers. Relying on the decision of a learned single Judge of this Court in Sreedharan v. Bhaskaran (1963 KLT 692) it was argued that court has the inherent power to sell any item of property for its equitable distribution and that right is apart from the provisions of the Act and in such circumstance, the Writ Petition is only to be dismissed. 5. The Partition Act (Act IV of 1893) was enacted to amend the law relating to partition. The W.P.(C) 4546/2007 10 statement of objects and reasons reveals that as per the law then stood, court must give a share to each of the parties and cannot direct sale and division of the proceeds in any case whatsoever and instances occasionally occur where there were any insuperable practical difficulties in the way of making an equal division and in such cases court is either powerless to give effect to its decision or is driven to all kinds of shifts and expedients in order to do so. The objects show that the law was enacted to supply the defect in the law by giving the court, under proper safeguards, a discretionary authority to direct sale where partition cannot reasonably be made and sale, would in the opinion of the court be more beneficial for the parties. The power which it was proposed to give to the Court was a discretionary one to be exercised on a consideration of all the circumstances of the case providing that where court is obliged to direct sale, a right of pre- emption is given to the parties similar to the one W.P.(C) 4546/2007 11 conferred on shareholders under section 310 of the Code of Civil Procedure, 1882. 6. Section 2 and 3 of the Act which are the relevant provisions read as follows:- 2. Whenever 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 shareholders therein, or of any other special circumstance, a division of the property cannot reasonably or conveniently be made, and W.P.(C) 4546/2007 12 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 co- sharer undertakes to buy- (1) If, in any case in which the Court is requested under the last foregoing section to W.P.(C) 4546/2007 13 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 sub section W.P.(C) 4546/2007 14 (1), the Court shall order a sale of the share or shares to the shareholders 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.” The scheme of Section 2 and 3 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 circumstances and division of the property W.P.(C) 4546/2007 15 cannot reasonably or conveniently be made, 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 sale of the property and distribute the proceeds among the shareholders. Where court has been requested under section 2 by any of the shareholders interested individually or collectively to the extent of one moiety or upwards to direct sale, any other shareholder or shareholders 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, court is obliged to order 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 to order sale instead of division in a partition as provided under section 2, and the other shareholder undertakes to buy at a W.P.(C) 4546/2007 16 valuation, the share of the party asking for sale, court has no option or choice or discretion left with it. It is bound to order a valuation of the share and offer to sell the same to the shareholder undertaking or applying to buy it at a valuation. The purpose underlying the section undoubtedly is to prevent the property falling into the hands of third parties, if that could be done in a reasonable manner. In case only one sharer apply to purchase the share or shares of the party asking for sale, court has to order sale to that party after ordering a valuation of the share as it may thinks fit. To invoke the power under section 2, it need only appear to the court that by reason of the nature of the property to which the suit relates or all the number of shareholders therein or any other circumstances a division of the property cannot reasonably or conveniently be made and that sale of the property and distribution of the proceeds would be more beneficial for all the shareholders. W.P.(C) 4546/2007 17 7. The sale provided under section 2 is a public sale. The purpose of enactment of Section 3 is to prevent the family property coming into the hands of third parties in the event of a sale as provided under section 2. Considering the scope of Section 2 and 3 Apex Court in Ramamurthi v. Rajeswara rao (AIR 1973 SC 643) held:- “The various stages in the proceedings would be as follows under Ss.2 and 3 of the Partition Act. 1. In a suit for partition if, it appears to the Court that for the reasons stated in S.2 a division of the property cannot reasonably and conveniently be made and that a sale of property would be more beneficial it can direct sale. This can W.P.(C) 4546/2007 18 be done, however, only on the request of the shareholders interested individually, or collectively to the extent of one moiety or upwards. 2. When a request is made under S.2 to the court to direct a sale any other shareholder can apply under Section 3 for leave to buy at a valuation the share of the other party asking for a sale. 3. The court has to order valuation of the share of the party asking for sale. 4. After the valuation has been made the court has to offer to sell the share of the party asking for sale to W.P.(C) 4546/2007 19 the shareholder applying for leave to buy under S.3. 5. If two or more shareholders severally apply for leave to buy the court is bound to 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. 6. If no shareholder is willing to buy such share or shares at the price so ascertained the application under S.3 shall be dismissed, the applicant being liable to pay all the costs. 11. A question which presents a certain amount of W.P.(C) 4546/2007 20 difficulty is at what stage the other shareholder acquires a privilege or a right under S.3 when proceedings are pending in a partition suit and a request has been made by a co-owner owning a moiety of share that a sale be held. One of the essential conditions for the applicability of S.2 of the Partition Act is that it should appear to the court that a division of the property cannot reasonably or conveniently be made. To attract the applicability of S.3 all that the law requires is that the other shareholder should apply for W.P.(C) 4546/2007 21 leave to buy at a valuation. Once that is done the other matters mentioned in S.3(1) must follow and the court is left with no choice or option. In other words, when the other shareholder applies for leave to buy at a valuation the share of the party asking for a sale the court is bound to order valuation of his share and offer to sell the same to such shareholder at a price to be ascertained.” But section 2 and 3 of the Act can be invoked by the court only on the request or application by a qualified shareholder. Section 2 contemplates request of any of the shareholders interested individually or collectively to the extent of one moiety or upwards, for a sale of the property and W.P.(C) 4546/2007 22 distribution of the proceeds. To invoke that power on the request of the shareholder interested to the extent of one moiety or upwards, it should appear to the court that by reason of the nature of the property to which the suit relates or to the number of shareholders therein or of any other special circumstance division of the property cannot reasonably or conveniently be made and that sale of the property and distribution of the sale proceeds would be more beneficial for all the shareholders. Sub section (1) of Section 3 can only be applied in a case where a request is made under section 2 for a sale. Under sub section (1) in such a case if any other shareholder applies for leave to buy at a valuation of the share or shares of the party or parties asking for sale the court shall order a valuation and shall offer to sell the same to such shareholder at the price so ascertained. Under sub section (2) if one or more shareholders also apply for leave to buy as provided under sub section (1), court shall offer sale to the share or shares who W.P.(C) 4546/2007 23 offers to pay the highest price above the valuation made by the court. Therefore when there is no request for a sale by any shareholder interested individually or collectively to the extent of one moiety or upwards as provided under section 2 court cannot direct a sale. In that case no other sharer can apply for leave to buy as provided under section 3. Hence section 3 cannot be invoked in a case where there is no request for a sale as provided under section 2. In such a case court cannot invoke the provisions of Act and direct a sale either public or among the sharers. 8. Admittedly in this case no request was made by any shareholder interested individually or collectively to the extent of one moiety or upwards as provided under section 2. Naturally Section 3 has no application and no other shareholder can apply for leave of the court to purchase the other shares. It is based on the report submitted by the Commissioner disclosing that it is not feasible or possible to divide the decree schedule property W.P.(C) 4546/2007 24 having an extent of 15 cents, into 26 equal shares court found that property cannot be divided. It is admitted that major portion of the property is occupied by the residential house and the remaining portion is