Case: Tarinikamal Pandit and Others Vs. Perfulla Kumar Chatterjee (Dead) By L.Rs

This appeal is by plaintiff 1, legal representatives of plaintiff 2 and plaintiff 3 by certificate granted by the High Court Calcutta against its judgment dismissing the suitThe suit was filed by the plaintiffs for the declaration of each of the plaintiffs title to the extent of 1/4th share each and in all 3/4th for all the plaintiffs of the suit property and the premises with the findings that the suit property and the premises were purchased in co- ownership awarding the plaintiffs and the defendants equal 1/4th share each in terms of the agreement dated 2.4.1960 and for partition of the suit property and premises in equal 1/4th share each and for a decree of Rs. 45, 000 with further accruals by way of receipt of further rent till full realisation of the claim. In the alternative a decree for accounts of the dissolved partnership on declaration of dissolution of the same and partition of the suit property and premises in equal 1/4th share to each of the plaintiffs and the defendant by metes and boundsThe defendant in his written statement denied the claim of the plaintiff and contended that the suit property was never purchased in co-ownership or that the plaintiffs were entitled to 3/4th share. He contended that plaintiffs 2 and 3 advanced Rs. 10, 000 each as loan and that they had no claim to the property he having purchased the property in court auction as the absolute ownerThe trial court decreed the suit. The defendant preferred an appeal to the High Court which accepted the appeal and dismissed the suitThe facts of the case may be shortly stated. The suit property in Darjeeling belonged to one Harbhajan Singh Wesal. He executed a mortgage in favour of the Calcutta National Bank Ltd. The bank instituted a suit against Harbhajan Singh Wesal for recovery of Rs. 1, 82, 403-11-3 and for enforcement of the mortgage. Pending suit the Calcutta National Bank was wound up and the High Court of Calcutta passed a decree against Harbhajan Singh and appointed t he Official Liquidator of the Calcutta National Bank as Receiver of the mortgaged property including the suit properties. On 5-9-1959 a final decree was passed directing the sale of the mortgaged property including the suit properties at Darjeeling by public auction subject to confirmation by the Court.The defendant Prafulla Kumar Chatterjee was interested in buying the property in Darjeeling. He was negotiating with the Receiver for the purchase of Darjeeling properties. On 10.6.1959 he received a letter from D. N. Mukherjee advocate advising him to give an offer to the Receiver and on 22.6.59 the defendant obtained an engineering estimate and made an offer to the Receiver to purchase the property for Rs. 32, 000. On 20.11.59 an advertisement appeared in the newspaper by P.W. 1, K. K. Kshetry, Solicitor of the bank, for auction of the suit property. The property was auctioned on 15th December, 1959 and the defendant offered the highest bid f or Rs. 30, 000. On the same day the defendant deposited Rs. 7, 500/-. While the sale was awaiting confirmation by the High Court a higher offer was made by one Baidyanath Garsi and thereupon the defendant offered Rs. 40, 000 which was accepted by the court and the sale in favour of the defendant was confirmed by the High Court for a sum of Rs.40, 000 on 19.1.60. The defendant deposited a sum of Rs. 2, 500 in addition to Rs. 7, 500 that had already been deposited. The defendant was granted three months time for depositing the balance sum of Rs. 30, 000. The defendant did not have funds to pay the balance of Rs. 30, 000 and had to raise the amountOn 2.4.1960 an agreement was entered into between the three plaintiffs and the defendant. The suit by the plaintiffs is mainly based on this agreement P-45 dated 2.4.60. The agreement is signed by the three plaintiffs as well as by the defendant. According to the recital in the agreement the parties after learning from the notification in the newspaper of the sale of the suit property agreed between themselves to call the bid jointly in co-ownership in the name of the defendant and that in pursuance of the agreement the defendant was deputed to call the bid. The agreement further states that accordingly the defendant was sent to Calcutta and the bid at the auction which was finally knocked down on 19.1.60 for a sum of Rs. 40, 000 in the name of the defendant. The agreement also provided that the plaintiff s and the defendants would be entitled to equal shares in the property. Another term of the agreement provided that the conveyance shall be drawn in the joint names of the parties by obtaining leave from the High Court.On 7.4.60 the defendant executed two receipts Exs. 22 and 22A in favour of the second and the third plaintiffs respectively. It is recited in the receipt that the defendant received a sum of Rs. 10, 000 as the share of the purchase price of the property sold in public auction by the Official Liquidator in pursuance of the agreement amongst themselves. Though the receipt was typed in Darjeeling on 7.4.60 the defendant signed the receipt at Calcutta on 11-4-60. In the meantime on 8.4.60 the defendant filed an application in the High Court of Calcutta praying that the time for completion of the sale be extended by three months from 19-4-60 and the conveyance be executed in favour of the three plaintiffs and himself. On 11-4-60 a sum of Rs. 30 , 000 was paid to M.R. Kshetry. The request for the conveyance to be made in favour of the three plaintiffs and the defendant was given up and the court directed the execution of the conveyance in favour of the defendant alone. On 17-6-60 a conveyance was executed by the Registrar of the High Court and the Receiver in favour of the defendant alone in pursuance of the order of the court dated 11-4-60. On 2-1-61 the plaintiffs served a notice on the defendant calling upon him to partition the property and deliver their shares and render accounts. On 3-6-61 the plaint in the suit was filedThe plaintiffs apart from oral evidence very strongly rely on three documents to prove that they are joint owners and are entitle d to 3/4th share in the suit property. The first document is the agreement between the parties dated 2.4.60. The second are two receipts dated 7.4.60 issued by the defendant in favour of plaintiffs 2 and 3. The third document is the application filed by the defendant on 8-4-60 in the High Court praying that the conveyance may be effected in favour of the three plaintiffs and himself. The case for the plaintiffs is that between 20th and 23rd November, 1959 there was an advertisement in the newspapers by the Official Receiver announcing the sale of the suit property. According to the plaintiffs the three plaintiffs and the defendant mutually agreed to call the bid jointly in co-ownership in the name of the defendant and to purchase the property in equal shares contributing equally the bid money and the other costs as might be incurred for the conveyance of the property. It was further agreed that the plaintiffs and defendant would have equal share in the property. According to the plaintiffs in pursuance of the agreement the defendant was sent to Calcutta where he bid on 15.12.59 for Rs. 30, 000 and the bid was confirmed by the High Court on 19.1.60 for a sum of Rs. 40, 000. Out of the bid money a sum of Rs. 7, 500 was paid to the Receiver on 15.12.59 and a sum of Rs. 2, 500 on 19-1-60 and the balance of Rs. 30, 000 on 11-4-60. In the meantime it is stated that the plaintiffs and the defendants considered it advisable to have the verbal agreement between them reduced to writing and thus the agreement dated 2.4.60 came into existence. After the full bid money was paid, the plaintiffs contributing equally, a deed of conveyance was executed on 17-6-60 and registered at Darjeeling . According to the mutual agreement the parties were entitled as co-sharers to enjoy and occupy the suit property in co-ownership and were also entitled to income from them. It was further agreed that the defendant would manage the joint property for the co-owners of the property and the defendant would realise the rents for and on behalf of the parties with liability to pay the respective shares to each of the plaintiffs. The defendant, on the other hand, submitted that he was trying to purchase the suit property from the previous owner Harbhajan Singh by private negotiations before the proceeding was started for auction sale. The defendants efforts to purchase the property from the owner proved abortive and he decided t o purchase the suit property in the auction sale when the property was advertised for sale. As the defendant was not acquainted with the procedure of courts sale he approached the first plaintiff for legal service and the first plaintiff gave directions as to how the defendant should proceed. The defendant denied that he was sent by the plaintiffs to Calcutta for calling the bid. According to him he went of his own accord, attended the public auction on 15.12.59 and offered Rs. 30, 000 for purchasing the property and when the bid was accepted he paid Rs. 7, 500 and that money belonged to him alone. Eventually, the sale was confirmed in favour of the defendant for Rs. 40, 000 and he paid a sum of Rs. 2, 500 in court to make up Rs. 10, 000 i.e. One-fourth of the bid-amount all by himself As the defendant had to pay the balance of Rs. 30, 000 and as he was in short of funds he approached the first plaintiff who was his lawyer and asked for his advice. As the time f or payment of balance amount was fast approaching the defendant frantically tried to find a person who could advance him temporary loan of Rs. 20, 000 which amount he needed for completing the purchase. As he was not successful he requested the first plaintiff to find from amongst his clients persons who could make temporary advance of the amount.

Court's reasoning:
We find it difficult to accept the story for plaintiffs 2 and 3 were reluctant to part with Rs. 10, 000 each without receipt even though the first plaintiff assured that there was no need for a receipt. In fact th e money was not parted with by them till the second plaintiffs son accompanied the defendant to Calcutta and paid it in person to the Receiver. In such circumstances, it is not possible to accept the plea of plaintiffs 2 and 3 that they did not insist on a receipt for payment of Rs. 3, 500 each. In this connection, the evidence of P.W. 1 Kshetry that out of the sum of Rs. 30, 000 paid in cash Rs. 27, 000 was handed over to him by Narendra Kumar Aggarwal and only the balance was paid by the defendant was relied on by the plaintiffs to show that the share of plaintiffs 2 and 3 of Rs. 13, 500 each was paid. According to the defendant second plaintiffs son Narendra gave him Rs. 20, 000 and he had Rs. 10, 000 and he and Narendra counted Rs . 30, 000 and handed over the sum of Rs. 30, 000 to Kshetry, in the presence of the Judge. On the evidence the High Court came to the conclusion that the money was counted by Narendra and the defendant before it was paid to Kshetry and if Narendra handed to the Solicitor a sum of Rs. 27, 000 after counting, the inference that Rs. 27, 000 belonged to plaintiffs is not justified. We agree with the view taken by the High Court. We therefore find that plaintiffs 2 and 3 have not proved that t hey paid Rs. 3, 500 each towards the expenses. The evidence relating to payment by the first plaintiff is even worseThe High Court rightly rejected the plea on behalf of the first plaintiff that the proceeds of the cheque were paid to the defendant. On the record there is hardly any acceptable evidence for establishing the payment of Rs. 13, 500 by the first plaintiff to the defendant or the payment of Rs. 3, 500 each by the plaintiffs 2 and 3 to the defendant.There is no explanation by the plaintiffs as to how the conveyance came to be registered in the name of the defendant only when the agreement was that it should be taken in the name of the three plaintiffs and the defendant jointly. The agreement contemplated taking of the conveyance in the names of the three plaintiffs and the defendant and in fact the application made by the defendant to the court prayed that the sale be confirmed in favour of the three plaintiffs and the defendant and the conveyance issued in their joint names. But the application for confirmation in the joint names was not pressed and the conveyance was ultimately made in favour of the first defendant alone. There is no explanation as to why the plaintiffs did not insist on the bid being confirmed in the names of all of them and the conveyance issued in their joint names. Equally on the side of the defendant there is no explanation as to why the signed the agreement which provided that the sale should be for the benefit of all of them and as to why he applied to the court praying for the confirmation of the sale in favour of all of them. Neither has the defendant denied receipt of Rs. 10, 000 from each of the plaintiffs 2 and 3. There is no provision for payment of interest by the defendant to plaintiffs 2 and 3 for the sums advanced. If it had been loan simpliciter there could be no explanation for absence of provision for payment of interest. On a close analysis of the evidence led on behalf of the plaintiffs and the defendant we agree with the High Court that neither the version of the plaintiffs nor that of the defendant discloses the entire truth. The conclusion we arrive at on the evidence is that the plaintiffs have failed to prove any prior agreement before the defendant made his bids for Rs. 30, 000 and later for Rs. 40, 000 and paid the deposits amounting to Rs. 10, 000 by himself. Plaintiffs 2 an d 3 have failed to prove that they have paid Rs. 3, 500 each towards expenses in addition to payment of Rs. 10, 000 by each of them which is admitted. The first plaintiff has totally failed in proving that he had paid any part of the consideration. On the side of the defendant there is no explanation as to why he subscribed to the agreement agreeing to share the property along with the three plaintiffs and for his applying to the court for confirmation of the sale in favour of all of them. Neither is there any explanation by him as to why plaintiffs 2 and 3 advanced Rs. 20, 000 without interestTaking all the circumstances into account we feel the irresistible inference is that the defendant having made the bid by himself later on found himself badly in need of money to pay the balance of the bid amount. In trying to find the money he sought the help of the plaintiffs and received payment of Rs. 20, 000 from plaintiffs 2 and 3.The crucial question is wh ether this amount was received merely as a loan as contended by the defendant or given on the agreement that plaintiffs 2 and 3 should be entitled to a share each.The conduct of the defendant shows that while he badly needed the money he was not willing to share the property with them for the amount. Equally plaintiffs 2 and 3 wanted the share in the property for the money advanced by them. It is clear that the money was not advanced as a loan. It may be that the plaintiffs 2 and 3 were insisting on a hard bargain but it cannot be denied in the circumstances in which the defendant was placed that he had accepted it. The condition insisted upon by plaintiffs 2 and 3 might not have been fair but the agreement arrived at in the circumstances cannot be said to be due to undue influenceOn the short ground that the agreement dated 2nd April, 1960 does not reflect the true nature of the transaction the High Court held that the suit must fail. We are of the view that if the amount was not advanced as a loan but paid towards acquiring of a share in the property the relief cannot be deniedWhen th e court makes an order confirming the sale under order 21, Rule 92, the sale becomes absolute. After the sale becomes absolute under Rule 94 the court shall grant a certificate specifying the properties sold and the name of the person who at the tim e of the sale is declared to be the purchaser. Such certificate is required to bear the day and the date on which the sale became absolute. The certificate by the court referred to in sec. 66 is a certificate under order 21, Rule 94. The procedure envisaged for sale generally and sale of immovable property under Order 21 is sale by a public auction. Sale by a court through the Receiver appointed by court is not contemplated under these provisions. In a sale by a Receiver a certificate to the purchaser under Order 21, Rule 94, is not given by the Court. Therefore, the prohibition under sec. 66 cannot be invoked in the case of a sale by the Receiver. A Receiver is appointed under Order 40, Rule 1, and a property can be sold by the Receiver on the directions of the court even by private negotiations. The requirement of s. 66 of the C.P.C. is a certificate by the court as prescribed. In this case the conveyance Ex. 5 was in accordance with the original side Rules of the High Court. In the view we have taken that s. 66 is not applicable to sale by Receiver it is not necessary to go into the question whether a sale by the Receiver under the Rules of the Calcutta High Court would come within the purview of s . 66. Section 66 refers to execution of sales only and has no application to a sale held by a Receiver. In this view the objection raised by the learned counsel for the defendant has to be rejected.