HON’BLE MR JUSTICE R. KANTHA RAO S.A.NO.1538 OF 2007 DATED: 28.11.2011 BETWEEN: R.V.Srinivasa Rao .. Appellant And R.Prakash Rao and another .. Respondents HON’BLE MR JUSTICE R. KANTHA RAO S.A.NO.1538 OF 2007 JUDGMENT: I have heard Sri P.Venugopal, learned counsel appearing for the appellant and Sri M.S.Ramachandra Rao, learned counsel appearing for the first respondent. 2. The plaintiff, who has been unsuccessful throughout, filed this second appeal. 3. This second appeal has been admitted for consideration of the following substantial question of law, which are involved. 1. Whether the subject matter of the suit which is the property in dispute is acquired under the Court auction by virtue of Ex.A.1- agreement which was executed between the appellant and the first defendant which came into existence on account of undue influence exercised by the plaintiff against the other co-sharers of the property. 2. Whether the property is acquired under Court auction within the family members, is there any question of public policy involved in terms of Section 23 of the Indian Contract Act and 3. Whether the findings were arrived at by the Courts below basing on the evidence which is contrary to the pleadings. 4. The learned trial Court as well as the learned first appellate Court have recorded concurrent findings to the effect that Ex.A.1-agreement is an unlawful and void agreement within the meaning of Section 23 of the Indian Contract Act and consequently the same is inoperable as it was obtained by using undue influence by the appellant against the co- sharers. 5. The brief facts of the case essential for considering the second appeal are the following: The appellant and the first respondent are the sons of late Sri Ramakoteswara Rao. Their mother is Smt R.Tayaramma and they had another brother by name R. Mohan Rao and two sisters T.Subbayamma and T.Ratnakumari. Late Sri Ramakoteswara Rao died in the year 1960. The suit schedule property was gifted on 19.08.1942 by R.Tayaramma’s father late S.Prakasha Rao to Sri R.Ramakoteswara Rao, his son-in-law. Therefore, the said property is to be treated as the self-acquired property of R.Ramakoteswara Rao. On his death in the year 1960, his wife and four sons and two daughters are entitled to 1/7th share each. The 1/7th share of Smt R.Tayaramma in the suit schedule property devolved on the appellant and the respondent No.1 under the Will Ex.B.16 dated 31.12.1985. 6. O.S.No.198 of 1983 was filed by the brother of the appellant and respondent No.1 by name R.V.Suryanarayana for partition of the suit schedule property. In the said suit, he claimed 1/7th share for himself and 1/7th share each to the defendants. The defendants in the suit were R.Lakshmi Tayaramma/defendant No.1, R.V.Srinivasa Rao/defendant No.2, R.Prakash Rao, Defendant No.3, R.Mohan Rao, Defendant No.4, T.Subbayamma, Defendant No.5, T.Ratnakumari, Defendant No.6. In the said suit, preliminary decree for partition was passed on 20.12.1984-Ex.B.14. Later R.Lakshmi Tayaramma and R.Mohan Rao died. R.Balaswarna Kumari, Respondent No.2 is the widow of late R.Mohan Rao and she was added as defendant No.9 in the suit, being his L.R in I.A.No.1374 of 1985 filed under Order 26 Rule 13 by the decree-holder for passing of final decree and partition of the petition schedule property by appointing an advocate commissioner. On 30.10.1987, the Additional Subordinate Judge, Guntur appointed an advocate receiver to conduct open auction in between the parties i.e. the plaintiff and the defendants, fixing Rs.3,00,000/- as the upset price. On 16.12.1999, the property was put up for sale among the parties. In the said auction, the appellant, the respondent No.2 and R.Balaswarnakumari have participated. The respondent No.1 became the highest bidder for Rs.3,03,000/-. 7. On 31.10.2001, the said I.A.-Ex.B.15 was allowed stating that the decree-holder is entitled to 2/14th share out of the auctioned amount deposited into the Court, defendant No.2, appellant herein and defendant No.3, respondent no.1 herein are entitled to 3/14th share each, defendants 4 to 6 are entitled to 2/14th share each. On 31.12.2001, sale certificate-Ex.B.8 was issued to the first respondent. The said sale was challenged by the decree-holder in I.A.No.103 of 2000 –Ex.A.22 and the said I.A. was dismissed on 03.09.2001. The same was also confirmed by this Court in C.R.P.No.4513 of 2001. In E.P.No.107 of 2002, possession of the property was delivered to the first respondent. Thereafter the appellant alleging that Ex.A.1, agreement dated 09.07.2000 existed between the parties, that under the said agreement, both the appellant and the first respondent had agreed to share the suit schedule property, filed O.S.No.46 of 2003 before the I Additional Senior Civil Judge, Guntur for partition of the suit schedule property seeking half share in the suit schedule property and also sought temporary injunction restraining the first respondent from dispossession, pending suit. 8. The contention urged by the appellant is that merely because the appellant and the first respondent came to an understanding to purchase the schedule mentioned property in Court auction, the Court auction does not become unlawful and no public policy is involved in it. According to the appellant, there was no intention on the part of the parties to Ex.A.1-agreement either to peg down the price or to defraud the other co-sharers and therefore, the agreement Ex.A.1 is not opposed to public policy and does not attract Section 23 of the Indian Contract Act. The appellant and the first respondent relied on a decision in GURMUKH SINGH v AMAR SINGH[1] wherein the Supreme Curt held that the agreement between two bidders to jointly bid in a public auction for sale of property, when not intended to peg down the price or to defraud the government to knock out the sale at a lower price cannot be said to be opposed to pubic policy and hence, it is lawful and valid. 9. The said decision before the Supreme Court pertains to the relief of specific performance of agreement between two parties and basing on the facts of the said case, the Supreme Court held that the agreement between two parties, who are bidders at the auction was not intended to peg down the price or defraud the government to knock out the sale at a lower price and therefore it cannot be held to be void as opposed to public policy. 10. It is the contention of the first respondent that in the instant case both the Courts have concurrently held that the plaintiff was in a dominant position to undue influence the remaining co-sharers and that Ex.A.1-agreement entered into between the appellant and the first respondent was with an intention that it should not exceed a particular amount and therefore, the appellant cannot take rescue under the above said judgment. 11. Learned counsel appearing for the appellant further relied on a decision in P.SARASWATHI AMMAL v LAKSHMI AMMAL ALIAS LAKSHMI KANTHAM[2] wherein the Division Bench of Madras High Court held as follows: “The entirety of the transaction must be taken into consideration and the necessity for the sale, are all factors which should necessarily be borne in mind before a transaction could be set aside on the ground that the price paid therefor is so low that it could be said to have been tainted by undue influence.” and whether that it is intended to defraud the other co-sharers so as to set aside the sale and also that “the civil Courts trying domestic litigations like the one under consideration ought to be very slow in accepting the case of a litigant, who is prepared to change his stand like a chameleon and bolster up theories according to convenience.” and further holding that to arrive at a decision at a bargain is tainted by undue influence the Court must be in a position to hold that: the person to obtain unfair advantage for himself and so as to cause injury to the person sought relying upon his authority or aid. It is only after such particulars are made available and a reasonable proof thereof has been given, the onus probandi would shift on the so called person of domination.” 12. Basing on the said decision, it is argued by the learned counsel appearing for the appellant that in the instant case though there is no material available on record that Ex.A.1 was the result of undue influence exercised by the appellant against the other co-sharers, the Courts below have erroneously recorded the concurrent findings that Ex.A.1-agreement was the result of fraud and undue influence, therefore, the findings are liable to be set aside. 13. The contention that the findings recorded by the Courts below are contrary to the evidence, has no force. There was enough material before the Courts below to record such a finding. In Ex.A.9- letter dated 10.04.2002, the appellant wrote to the respondent No.1 mentioning therein specifically that there was an agreement between them prior to the commencement of the auction on 16.12.1999, that the appellant did not stretch the bid much further than the upset price so that the respondent No.1 would become the successful bidder, that after the auction, they would reduce the same into writing regarding sharing of the property. In his cross examination, the appellant as PW.1 admitted that in Ex.A.9 letter he and the first respondent agreed that the bid should not go beyond the upset price. It was borne out from the evidence that the appellant, after retirement from his job from Visakhapatnam Steel Plant had set up practice as an advocate and he was prosecuting the entire litigation. In so far as the pleadings are concerned, the first respondent in his written statement specifically stated that Ex.A1 agreement is hit by Section 23 of the Indian Contract Act and that bidding in the auction was a mock bidding and that the appellant lured him to share the spoils with him to the exclusion of all other family members by his professional skills and lulled the second defendant/second respondent to inaction and active participation by promising to get her paid Rs.2.5 lakhs that this syndicate to lower the bid was fraudulent and property valued at Rs.8 lakhs was sold at Rs.3,03,000/-. The fact which cannot be denied is that the property was sold far below to its real price. 14. The first respondent in his evidence stated that although he has no capacity to purchase the property and did not want to bid and purchase the same that he participated in the auction just to facilitate the auction. Therefore, it was proved to the satisfaction of the Courts below that the first respondent participated in the auction only for the purpose of facilitating the same at the instance of the appellant, though she had no capacity to bid the auction. The appellant admitted in the cross examination that he retired in September, 1999 and had set up practice as an advocate after enrolling himself in the year 1999 and all the family members jointly engaged one advocate in O.S.No.198 of 1983. He also admitted that he filed vakalat along with one K.Krishna Kishore on behalf of the first respondent in I.A.No.1374 of 1985 in O.S.No.198 of 1983 on 20.06.2000. The appellant also admitted that he himself addressed arguments in I.A.No.103 of 2000 and C.R.P.No.4513 of 2001 filed against the order in the said I.A. Therefore, there is enough evidence before the Courts below that in fact, the appellant was only transacting the Court litigation on behalf of the co-sharers. For all these reasons, the first respondent took a specific plea in his written statement that the appellant was exercising considerable influence over him and he induced the first respondent to join hands with him to reduce the price to the lowest. 15. In view of the above rival contentions and evidence which was on record before the Courts below, it cannot at all be said that the Courts below have recorded concurrent findings basing on the evidence which is contrary to the pleadings. This Court while exercising its jurisdiction under Section 100 C.P.C. in deciding the second appeal will not interfere with the findings of fact recorded by the Courts below unless they are perverse and contrary to the evidence on record. Even if there is possibility for this Court to take a different view, it should not take such a view disturbing the concurrent findings recorded by both the Courts below. This is so held by the Supreme Court in B.SHYAMKUMAR VS FRANCIS GEORGE[3]. 16. In GURUMUKH SINGH v AMAN SINGH[4] referred above, the Supreme Court on facts before it arrived at a finding that the agreement between two bidders to jointly bid in a public auction is not intended to peg down the price and to see that the bid shall not exceed a particular amount. 17. As already said in the foregoing paragraphs that in the present case the property was sold in Court auction far below the actual price of the subject matter of the suit obviously and as rightly held by the Courts below it is the result of an agreement between the appellant and the first respondent which the appellant intended to knock away the property to the detriment of other co-sharers. The findings of fact and law which have been recorded by the learned Courts below do not call for any interference in this second appeal. 18. The second appeal therefore, fails and the same is dismissed. There shall be no order as to costs. _________________ Date: 28.11.2011 R. KANTHA RAO, J kvrm HON’BLE MR JUSTICE R. KANTHA RAO S.A.NO.1538 OF 2007 DATE: 28.11.2011 [1] (1991)3 SCC 79 [2] AIR 1978 MADRAS 361 [3] 2006(5) SCC 545 [4] 1991(3) SCC 79