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Structured Summary of the Opinion (Revision Petition by Gopal Bux Rai)

Factual and Procedural Background

The petitioner, Gopal Bux Rai, is the owner of the Deogan Estate. The property at issue formed part of what was known as the Imli Estate, a khorposh estate under the Deogan Estate.

The opposite party brought Suit No. 15 of 1936 against Gopal Bux Rai, Jugeshwar Bux Rai and other family members and obtained a mortgage decree. The mortgaged property was put up for sale and purchased by the decree-holder (the opposite party).

Jugeshwar Bux Rai later brought a suit to set aside the sale and recover the property; in that suit the present petitioner was made defendant 2 and filed a written statement denying any interest in the sold properties.

On 10 February 1939 the petitioner applied to the Commissioner of Chota Nagpur for protection under the Encumbered Estates Act. On 5 April 1939 the Commissioner passed an order under Section 2-B of the Act prohibiting sale of the immovable property of Babu Gopal Bux Rai of Deogan in Palamau pending final disposal of his petition.

The Commissioner's order was communicated to the Deputy Commissioner of Palamau on 6 April 1939. The sale under the opposite party's mortgage decree had not been confirmed when the Commissioner's order was communicated. On 2 May 1939 the Deputy Magistrate Subordinate Judge confirmed the sale in favor of the opposite party.

The petitioner applied on 15 June 1939 to the Deputy Magistrate Subordinate Judge to stay delivery of possession and to vacate the confirmation. On 21 June 1939 the Deputy Magistrate Subordinate Judge declined to vacate the confirmation or to stay dakhaldehani. This revision petition challenges those orders.

Legal Issues Presented

  1. Whether the Deputy Magistrate Subordinate Judge had jurisdiction to confirm the sale in circumstances where the Commissioner had passed an order under the Encumbered Estates Act prohibiting sales in respect of the petitioner's property.
  2. Whether the Commissioner's prohibitory order (dated 5 April 1939) applied to the specific property sold (part of the Imli Estate) — i.e., whether the Imli property fell within the description of properties protected by the Commissioner's order.
  3. Whether an undivided interest of a member of a joint Hindu family (as in the petitioner's asserted interest in the Imli villages) can be the subject-matter of protection under the Encumbered Estates Act.

Arguments of the Parties

Petitioner's (Mr. B.C. De) Arguments

  • The Deputy Magistrate Subordinate Judge had no jurisdiction to confirm the sale because the Commissioner's order of 5 April 1939 prohibited all sales; that prohibition prevented completion of any sale.
  • Confirmation of sale is an essential and integral part of the sale transaction; no sale is complete until confirmation. Therefore, an order prohibiting sales must be read to prohibit confirmations required to make a sale effective.
  • The petitioner's description of the Deogan Estate in his application included tauzi No. 88 (Deogan Mahal) and, according to Mr. De, this description encompassed the khorposh interests in villages of the Imli Estate (i.e., the proprietary interest of the Deogan Estate in those villages).

Opposite Party's (Mr. Dutt) Arguments

  • An order prohibiting sales only prohibits the actual auction sale itself; the sale is complete at the moment of purchase at auction and confirmation is not part of the sale proper, so the Commissioner's order would not bar confirmation of a sale that had already taken place.
  • Authorities show that the judgment-debtor has no interest in the property the moment a sale takes place; consequently the purchaser's interest crystallizes at the sale (subject to confirmation formalities).
  • The property in question was not covered by the Commissioner's order because the petitioner described himself as owner of the Deogan Estate and did not specifically claim or list any khorposh (Imli Estate) interest in his petition; read with the petition, the Commissioner's order should be understood as prohibiting sales only of properties forming part of the Deogan Estate as described in the petition.
  • The petitioner's interest in the Imli villages was an undivided interest as a member of a joint Hindu family and, following authority (referred to as 20 PLT 619), an undivided interest is not the kind of "holder" of immovable property that the Encumbered Estates Act protects.
  • Specific factual points were raised that the petitioner may have little or no remaining interest in certain shares (for example, four annas in Sakhan Pirhi allegedly purchased by Badri in partition, and purchases alleged by creditor Ganauri Singh), which undermines the petitioner's claim of a protectable interest in those villages.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
20 PLT 619 (decision reported at 20 PLT 619; judgment of Manohar Lall J.) Holds that the holder of an undivided interest in property (member of a joint Hindu family) is not a "holder" of immovable property within the meaning of the Encumbered Estates Act and that applications for protection of undivided interests cannot be entertained. The court relied on this authority to support the conclusion that an undivided interest held by Gopal Bux Rai in the Imli villages could not properly be the subject-matter of protection under the Encumbered Estates Act; this underpinned the view that the Commissioner's order did not validly cover those undivided shares.

Court's Reasoning and Analysis

The court examined two interrelated legal propositions: (1) whether confirmation of a judicial auction sale is an integral part of the sale such that a prohibitory order against "sales" would also bar confirmations, and (2) whether the Commissioner's order actually applied to the specific Imli properties given the petitioner's description to the Commissioner and the nature of the petitioner's interest.

On the first point the court agreed in principle with the petitioner's contention that confirmation is integral to the sale. The court observed that under Section 69 of the Civil Procedure Code the property does not vest in the purchaser at the time of sale until it is confirmed; once confirmed, the purchaser is deemed to have been the owner as from the date of sale. Consequently, an order prohibiting sales would, in general, prohibit confirmations of sales that had taken place but remained unconfirmed at the time the prohibitory order was passed.

However, the court proceeded to consider whether the Commissioner's prohibitory order in fact covered the specific properties which had been sold. The court read the Commissioner's order together with the petition on which it was founded and concluded that the petition sought protection of the Deogan Estate as described in the petition (tauzi No. 88, Deogan Mahal). The petitioner had not specifically stated any khorposh interest in the Imli Estate in the petition to the Commissioner, and the court found that it was "tolerably clear" the Commissioner intended to prohibit sales of properties forming part of the Deogan Estate as described in that petition.

In addition, the court accepted the reasoning (and cited authority at 20 PLT 619) that an undivided interest of a member of a joint Hindu family is not properly the subject of protection under the Encumbered Estates Act. The court found that the petitioner's interest in the Imli villages was such an undivided interest and that the petition did not establish that the Imli properties were within the Commissioner's protective order.

The court also noted factual points (as raised by counsel for the opposite party) that suggested the petitioner may have very little, if any, remaining interest in certain shares of the villages (though the court did not find it necessary to remit the matter for specific findings on those purchases).

Bringing these strands together, the court concluded that (a) the Commissioner's order did not, on the materials before it, validly cover the sold Imli properties, and (b) in any event those properties comprised undivided joint-family shares which could not properly be made the subject-matter of such protection. Therefore there was nothing preventing the Deputy Magistrate Subordinate Judge from confirming the sale.

Holding and Implications

Holding: The petition is dismissed. The court held that the order confirming the sale was valid and made with jurisdiction (though the court observed it was not for the reasons given by the Deputy Magistrate Subordinate Judge).

Implications / Consequences:

  • The confirmation of the sale in favour of the opposite party is upheld.
  • The court found that the Commissioner's prohibitory order did not, on the record, apply to the specific Imli properties and that undivided interests in joint family property could not properly be brought within protection under the Encumbered Estates Act (as supported by the cited authority).
  • The opposite party was awarded his costs in this Court; the hearing fee was assessed at five gold mohurs.
  • The interim stay order dated 7 August 1939 concerning surplus money in court was discharged.
  • No broader precedent was announced beyond the court's application of the cited authority and statutory principle; the decision directly resolves the rights of the parties by dismissing the revision petition and upholding the sale confirmation.

Disposition: Petition dismissed. (Order recorded: "Petition dismissed." — Dhavle, J. agreed.)

    Gopal Bux Rai Judgment-Debtor v. Babu Shyambehari Singh Decree-Holder Opposite Party.

    Harries, C.J:— This is a petition by one Gopal Bux Rai praying for revision of an order refusing to vacate a previous order confirming a sale. The petitioner Gopal Bux Rai is the owner of an estate known as the Deogan Estate. The property in question in these proceedings formed part of what was known as the Imli Estate which was a khorposh estate under the Deogan Estate. The opposite party brought a suit (No. 15 of 1936) against Gopal Bus Rai and Jugeshwar Bux Rai and other members of his family, and in due course obtained a mortgage decree. The mortgaged property was put up to sale and purchased by the decree-holder opposite party. Later, Jugeshwar Bux Rai brought a suit to set aside the sale and recover the property and in that suit the present petitioner Gopal Bux Rai was made defendant 2. He filed a written statement in which he pleaded that he had no interest whatsoever in the properties which had been sold.

    2. On 10th February 1939, the present petitioner applied to the Commissioner of Chota Nagpur for protection under the Encumbered Estates Act, and on 5th April 1939, the Commissioner passed an order under S. 2-B of the Act prohibiting the sale of the immovable property of Babu Gopal Bux Rai of Deogan in Palamau or any portion thereof in execution of any decree or order of any Civil or Revenue Court pending the issue of the final order on his petition for protection.

    3. On 6th April 1939, this order was communicated to the Deputy Commissioner of Palamau. It appears that the sale in execution of the opposite party's mortgage decree had not been confirmed when the Commissioner's order was communicated to the Deputy Commissioner. On 2nd May 1939, the Deputy Magistrate Subordinate Judge confirmed the sale in favour of the opposite party. On 15th June 1939, the petitioner filed a petition before the Deputy Magistrate Subordinate Judge stating that as the Commissioner had stayed further proceedings in all Courts he prayed that delivery of possession in favour of the opposite party be stayed and he apparently also asked that the order confirming the sale be vacated. On 21st June 1939, the Deputy Magistrate Subordinate Judge by an order of that date declined to vacate his order confirming the sale or to stay dakhaldehani as prayed for. Against these orders the present petition has been preferred.

    4. It has been contended by Mr. B.C De on behalf of the petitioner that the Deputy Magistrate Subordinate Judge had no jurisdiction to confirm the sale in question. He has argued that the order of the Commissioner dated 5th May 1939 prohibited all sales and accordingly prevented any step being taken to complete a sale. He has urged that confirmation of a sale is an essential and integral part of the sale itself and that no sale is complete unless it is confirmed. He has argued therefore that when an order prohibits sales it prohibits all steps necessary to make a sale effective. Mr. Dutt who appears for the opposite party has contended that an order prohibiting sales only prohibits the actual sale of property by auction. According to him, the sale is complete the moment the property has been purchased. Confirmation of the sale is no part of the sale itself, and therefore an order prohibiting the sale would not prohibit the confirmation of a sale which had actually taken place. Mr. Dutt has relied upon certain authorities which tend to show that the judgment-debtor has no interest in the property the moment a sale takes place. However, one thing is clear and that is, that the purchaser at an auction sale does not acquire a good title to the property until the sale is confirmed. When it is confirmed, the auction-purchaser is deemed to be the owner of the property as and from the date of the actual sale. The property is deemed to have vested in him at the date of the sale. The words of Section 69 of the CPC make it clear that the property does not actually vest in the purchaser at the time of the sale; but once the sale is confirmed, it is deemed to have vested in him as and from that date. Without confirmation the purchaser acquires no title and it appears to me that confirmation of a sale is an integral part of the transaction of sale. That being so, an order prohibiting sale would prohibit confirmations of sales which had already taken place but which had not been confirmed before the prohibitory order was passed. That being so, the learned Deputy Magistrate Subordinate Judge would have had no jurisdiction to confirm the sale if the property was property covered by the prohibiting order of the Commissioner.

    5. Mr. Dutt has argued that the property in this case was not property which was the subject-matter of the Commissioner's order. It is to be observed that the petitioner petitioned the Commissioner for protection describing himself as the owner of the Deogan Estate. He did not in his petition mention that he held any interest whatsoever in the Imli Estate in which the property now in question lies. In his petition he states that his estate, namely the Deogan Estate, had been previously managed under the Encumbered Estates Act, and this is true. Further, the Imli Estate was not taken over under the Encumbered Estates Act as part of the Deogan Estate on that occasion, and it would appear that the Imli Estate had been taken over at some other period as a separate estate. From the petition it is tolerably clear that the present petitioner was asking for protection of the Deogan Estate and in the list of properties which he filed with the petition he does not mention any khorposh interest in the villages of the Imli Estate. He mentions tauzi No. 88, Deogan Mahal consisting of about 400 villages, and it is said by Mr. B.C De that this includes the khorposh interest in the villages in question. That would include the proprietary interest of the Deogan Estate in these villages; but it is not an apt way of describing the khorposh interest known as the Imli Estate. It would also appear that at this time the petitioner did not claim any interest in the Imli Estate. He certainly did not when proceedings were taken by Jugeshwar Bux Rai to set aside the sale of these properties which had taken place as a result of the decree passed in Suit No. 15 of 1936 at the instance of the opposite party.

    6. Upon a fair reading of the petition to the Commissioner, I am satisfied that what, Gopal Bux Rai asked for was protection of the Deogan Estate. The order of the Commissioner must be read with the petition and that being so it would appear that the order only prohibited all sales of properties forming part of the Deogan Estate. Mr. B.C De has urged that the order is wide enough to cover all properties; but to say the least of it, the matter is not free from doubt. Mr. Dutt has also argued that the order of the Commissioner could not refer to Gopal Bux Rai's interest in the villages forming part of the Imli Estate. His interest was an undivided interest of a member of a joint Hindu family, and that being so, Mr. Dutt contends that his interest was such as could not be protected under the provisions of the Encumbered Estates Act. This contention receives support from a recent case of this Court, namely 20 PLT 619.1 Manohar Lall J. who delivered the principal judgment in the case was of opinion that the holder of an undivided interest in property was not a holder of immovable property within the meaning of the Encumbered Estates Act. At p. 623 he observed:

    In my opinion the word ‘holder’ is expressly used to mean a land-holder who has a title to the property in question as owner in possession. It is a compendious way of describing the proprietors or the owners of the estate which is going to be assumed charge of. It comprises every sort of proprietor irrespective of his personal law, whether he is a Christian or a Muhammadan or is governed by the Dayabhag or Mitakshara School of Hindu law. In each case therefore it will have to be decided whether the owner who had made over charge of the estate has placed only his share of the estate in charge of the authorities or whether he, as representing the entire owners, has Induced the authorities to take over the whole of the estate of the joint family or of the other co-owners also under their superintendence. As was pointed out by their Lordships of the Judicial Committee in the case referred to above, it is impossible to hold that an undivided interest in a joint Mitakshara Hindu family can be dealt with or was intended to be transferred to the Court of Wards. Just as their Lordships decided in that case it must be decided in the present case after construing the two notifications in the light of the circumstances that the entire Namudag Estate belonging to the joint Hindu family of which Nageahwar was the karta along with Parmeshwar and Chandrika, was intended to lie taken possession of by the authorities with the express request of the karta and with the implied consent of the other members including Parmeshwar and Chandrika in the interest and for the benefit of the entire joint Hindu family.

    7. In that case application had been made by certain members of a joint Hindu family and it was contended that the application was for protection of their interest and their interest only. Their Lordships held that the application must be treated as an application for protection of the whole of the family property, because applications for protection of undivided interests could not be entertained as had been held by their Lordships of the Privy Council in reference to applications for protection by Court of Wards. It appears to me that there is considerable substance in Mr. Dutt's contention that an undivided interest in joint family property cannot be made the subject-matter of protection under the Encumbered Estates Act. The interest of Gopal Bux Rai in these Imli villages was, in my view, an undivided interest of a member of a joint family. It was contended by Mr. De that the family had disrupted because certain creditors had attaohed and sold Gopal Bux Rai's undivided interest in certain of these villages. In my view that would nob cause a disruption of the family and it was Gopal Bux Rai's own case that he was joint with the other members of the family.

    8. Lastly, Mr. Dutt has pointed out that Gopal Bux Rai certainly has no interest in four annas in Sakhan Pirhi which had been attached and purchased by one Badri who had brought a partition suit and had his share partitioned. It is also said that a creditor Ganauri Singh had obtained a money decree against Gopal Bux Rai and had purchased in execution four annas of Imli and four annas of Kumbwa. Mr. De is not in a position to deny this, though he does not admit it. If such be the case, it would appear that Gopal Bux Rai has very little, if any, interest left in these villages. However, it has not been proved in these proceedings that Ganauri Singh had purchased the interest alleged in these villages; but I do not think it is necessary that the case should be sent back for any findings upon this question. In my judgment Mr. De has failed to establish that the properties in dispute in this case were the subject-matter of the Commissioner's order and further I am satisfied that the properties, being undivided shares in joint family property, could not properly be made the subject-matter of such an order. That being so, there was nothing to prevent the learned Deputy Magistrate Subordinate Judge confirming the sale. I therefore hold that the order confirming the sale was right and made with jurisdiction though not for the reasons given by the learned Deputy Magistrate Subordinate Judge. I am not satisfied that there is any real ground for interference with the order confirming the sale and with the order refusing to vacate the order confirming the sale and accordingly I would dismiss this petition and discharge the rule. The opposite party is entitled to his costs in this Court. I would assess the hearing fee at five gold mohurs. The stay order passed on 7th August 1939, regarding the surplus money in deposit in Court, is discharged.

    Dhavle, J.:— I agree.

    G.N/R.K

    9. Petition dismissed.

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    Comments

    Gopal Bux Rai Judgment-Debtor v. Babu Shyambehari Singh Decree-Holder Opposite Party.
    (Jan 19, 1940)