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Braja Bhusan Trigunait And Others v. Sris Chandra Tewari Opposite Party.

Patna High Court
Jul 24, 1918
Smart Summary (Beta)

Structured Summary of the Opinion (Mullick, J.)

Factual and Procedural Background

This opinion concerns an application to revise an order of the Subordinate Judge of Manbhum refusing leave to certain petitioners to sue a Receiver appointed in an administration suit concerning the Trigunait brothers' family properties. The relevant factual matrix, as stated by the Court, is as follows:

  • In 1894 the Trigunait brothers granted a Mokarrari lease of certain properties to Nagendra Nath Mitra.
  • In 1899 Nagendra Nath sub-leased 101 bighas to Jogendra Nath Bose; that interest passed by transfers in 1908 to the Angarpatra Coal Company.
  • Charu Chandra Mitra (representative of Nagendra Nath) defaulted in rent and royalty; a Receiver in an administration suit sued him in 1914 for arrears (approx. Rs. 61,000).
  • On 4 May 1914 the Receiver applied for an attachment before judgment and a conditional attachment was issued.
  • On 4 November 1914 Charu Chandra purchased the rights of the Angarpatra Coal Company from its liquidator; on 6 November 1914 he sub-leased those properties to the present petitioners (who are also one-third co-sharers in the disputed property).
  • The decree in the rent suit was made on 27 April 1916. When decree-holders attempted sale, the Executing Court found the 4 May attachment defective and on 11 June 1917 ordered a fresh process of attachment; despite this, sale proceedings and a proclamation occurred without a freshly issued attachment.
  • To protect their leasehold interest the petitioners applied on 18 May 1918 to the Subordinate Judge for leave to sue the Receiver (or alternatively for sale subject to their rights). The Subordinate Judge, after calling for a report, on 4 June 1918 refused to give leave or to order sale subject to petitioners' rights.
  • The petitioners obtained a rule from this Court on 13 June 1918 calling upon the Receiver to show cause; an interim stay of sale was refused but no sale had actually taken place; petitioners filed their threatened suit in anticipation of sanction from this Court.

Legal Issues Presented

  1. Whether this Court should interfere with the Subordinate Judge's order refusing leave to the petitioners to sue the Receiver (i.e., whether leave should be granted to sue a Receiver in charge of property of the Court).
  2. Whether the petitioners have a prima facie case that Charu Chandra Mitra purchased the Angarpatra Coal Company's interest as a benamidar on their behalf (and with their money), such that their leasehold interest is not subject to sale in execution.
  3. Whether, alternatively, the principle of merger/augmentation applies so that property acquired by Charu Chandra after the attachment augmented his interest and became liable to be sold in execution (as argued with reference to Umes Chunder Sircar v. Zahur Fatima).
  4. Whether the High Court can revise the Subordinate Judge's order under Section 115 of the Civil Procedure Code (CPC) or under Section 107 of the Government of India Act, 1915 (superintendence jurisdiction).

Arguments of the Parties

Petitioners' Arguments

  • The 4 November 1914 purchase by Charu Chandra Mitra of the Angarpatra Coal Company's rights was made with the petitioners' money and on their behalf; Charu Chandra was a benamidar (nominal purchaser).
  • By the purchase and subsequent sub-lease, the petitioners stand in the shoes of the Angarpatra Coal Company as sub-lessees under the lessee, and their interest did not merge into Charu Chandra's interest (the judgment-debtor in the rent suit).
  • Accordingly, the property subject to the Receiver's attachment of 4 May 1914 did not include the petitioners' acquired rights; if Charu Chandra had no title or possession of that interest on 4 May 1914, the attachment could not cover the petitioners' rights.
  • They sought leave to sue the Receiver to determine these factual questions; an offer was made (by counsel Mr. Das) to pay the whole decree money into Court pending trial.

Opposite Party's Arguments (including findings of the Subordinate Judge)

  • The Subordinate Judge found the petitioners had no bona fide claim; the allegation of benami purchase was, in his view, false on the face of it.
  • It was contended that on 4 May 1914 what was attached was the whole right, title and interest of Charu Chandra in the 101 bighas and therefore subsequent events merely augmented the judgment-debtor's interest and could be sold in execution.
  • As an alternative, reliance was placed on the principle illustrated in Umes Chunder Sircar v. Zahur Fatima (augmentation/merger) that properties acquired by the judgment-debtor after the mortgage or earlier interest may be subject to execution by virtue of accession.
  • The Subordinate Judge also treated the application as premature and indicated the petitioners would have a remedy after sale by suing purchasers; accordingly the Judge refused leave.
  • Reliance was placed upon decisions (e.g., Balakrishna Udayar v. Vasudeva Aiyar and Kumar Chandra Kishore Roy v. Basat Ali) constraining revision under Section 115 CPC to jurisdictional or material irregularity grounds.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Umes Chunder Sircar v. Zahur Fatima Principle that a judgment-debtor's interest may be augmented by subsequent additions and that accession can make subsequently acquired properties liable to execution. The Court observed the case involved augmentation after a prior interest, but held it had no application to the present facts without further inquiry; the Court rejected automatic application of that principle here pending factual investigation.
Lane v. Capsey Equitable principle permitting protective remedies (e.g., leave to sue or quia timet actions) to prevent wrongful distraint or sale when a prima facie claim exists. Cited as one of the authorities showing the established equitable principle; the Court relied on this line of authority to conclude there was prima facie evidence warranting leave to sue the Receiver.
Pound, Son and Hutchings, In re Similar equitable authority supporting the doctrine that a party fearing wrongful loss of property may seek preventive relief (leave to sue/quia timet relief). Referenced alongside Lane v. Capsey to support the proposition that petitioners seeking to protect property from wrongful sale are entitled to leave where a prima facie case exists.
Balakrishna Udayar v. Vasudeva Aiyar Privy Council principle that Section 115 CPC is concerned with jurisdictional error, irregular exercise or non-exercise of jurisdiction; an order merely erroneous in law or on merits is not a ground for revision under S.115. Relied upon by the opposite party. The Court assumed S.115 applied but found that the Subordinate Judge's omission to inquire into allegations amounted to material irregularity in exercise of jurisdiction and therefore was revisable under S.115.
Kumar Chandra Kishore Roy v. Basat Ali Authority similar in effect to the Balakrishna Udayar decision regarding the scope of Section 115 CPC. Noted by the Court as being "to like effect" with Balakrishna Udayar. The Court treated the precedent as supporting the proposition relied on by the opposite party but nonetheless held that a material irregularity existed here.

Court's Reasoning and Analysis

The Court approached the matter first on the merits of the petitioners' application for leave to sue the Receiver:

  1. Legal standard for leave: The Court stated the general equitable principle that where property is in the charge of the Court and a party seeks leave to sue the Receiver, leave should not be refused as a matter of course unless the Court is satisfied there is no question to try or no legal foundation to the claim. The onus is therefore on the Court to show no foundation for any claim.
  2. Application of the standard to the present facts: The petitioners advanced a factual case that Charu Chandra was a benamidar who had acquired the company's rights on 4 November 1914 with the petitioners' money; if proven, the petitioners' rights would not have been part of the attachment of 4 May 1914. The petitioners also sought to show Charu Chandra had no possession or title on 4 May 1914.
  3. Findings below and need for inquiry: The Subordinate Judge found the benami allegation false and concluded the petitioners had no bona fide claim, treating the application as premature and asserting remedies after sale. The High Court criticized that approach as resting on suspicion rather than inquiry and reasoned both the benami allegation and whether the whole right was attached on 4 May are factual issues requiring investigation.
  4. On merger/augmentation: The Court considered the opposite party's argument that subsequent acquisition by Charu Chandra augmented his earlier right and so became liable to sale (citing Umes Chunder Sircar). The Court held that principle applies only if (a) the whole right of Charu Chandra was attached on 4 May and (b) Charu Chandra was true owner on 4 November — both factual matters that needed trial.
  5. Remedy after sale insufficient: The Court rejected the Subordinate Judge's reliance on the availability of post-sale remedies as inadequate protection; the Court explained the purpose of quia timet or preventive equitable actions is to prevent irreversible prejudice by adjudicating interests before sale or transfer.
  6. Jurisdictional bases for interference: The Court dealt with whether it could interfere under Section 115 CPC and Section 107 Government of India Act. It accepted (for argument) that S.115 applies to such matters but emphasized S.115 permits revision where there is material irregularity in exercise of jurisdiction. The Court concluded that the Subordinate Judge's omission to inquire into contested factual allegations amounted to material irregularity and thereby justified revision under S.115.
  7. Independent superintendence jurisdiction: Under Section 107 of the Government of India Act the High Court has a supervisory residue of jurisdiction to correct a denial of the right to a fair trial. The Court found such denial in the present case and therefore an independent basis for granting relief.
  8. Practical consequences and directions: The Court noted counsel's offer to pay the decree money into Court pending trial and observed that injunction or the terms on which any interim restraint might be granted are matters for the trial Court. The High Court declined to give specific directions at this stage but allowed the application and awarded costs and a hearing fee.

Holding and Implications

APPLICATION ALLOWED

Direct effect on the parties:

  • The petitioners were granted leave to sue the Receiver (the application to revise the Subordinate Judge's order was allowed).
  • Costs were awarded to the petitioners and a hearing fee of three gold mohurs was imposed.
  • The Court did not at this stage grant any injunction or make directions as to payment into Court; it recorded counsel's offer to pay the decree money into Court and observed that any injunction or terms for interim relief are to be decided by the trial court.

Implications for broader law: The Court applied existing equitable principles (leave to sue Receiver, quia timet relief, and the supervisory jurisdiction of the High Court under Section 107 of the Government of India Act and Section 115 CPC) to correct what it found to be a material irregularity. The opinion does not purport in its text to establish a novel binding precedent beyond applying these established principles to the facts before it.

End of summary — based exclusively on the provided opinion.

Show all summary ...

Mullick, J.:— This is an application for revision of an order made by the Subordinate Judge of Manbhum refusing leave to the petitioners to such a Receiver who has been appointed by the Court in an administration suit between certain members of a family known as the Trigunait brothers. It appears that so far back as 1894 a Mokarrari lease of certain properties was given by the Trigunait brothers to one Nagendra Nath Mitra. In 1899 Nagendra Nath gave a sub-lease of 101 bighas out of that property to Jogendra Nath Bose, whose interest by subsequent transfers devolved in 1908 upon a company called the Angarpatra Coal Company. Charu Chandra Mitra, the representative of Nagendra Nath subsequently defaulted in payment of rent and royalty upon his lease and in 1914 it became necessary for the Receiver who had, as stated above, been appointed in the administration suit between the co-sharers to sue Charu Chandra Mitra for arrears amounting to something like Rs. 61,000. On 4th May, 1914, an application was made in the course of that suit by the Receiver for an attachment before judgment and a conditional attachment was in fact issued by the Court. In/the meantime, the Angarpatra Coal Company had gone into liquidation and on 4th November, 1914, Charu Chandra Mitra purchased the right, title and interest of the Company from the liquidator. On 6th November, 1914, Charu Chandra Mitra executed a sub-lease of those properties in favour of the present petitioners, Braja Bhusan Trigunait and others who were at that time and still are also one-third co-sharers in the property which is the subject or the adminstration suit.

2. The case of the petitioners is that the purchase of 4th November, 1914, made by Charu Chandra Mitra was in fact made with the money of the petitioners and in their behalf and that Charu Chandra Mitra was a mere benamidar. It is contended that by that purchase and the subsequent lease, the petitioners have entered into the shoes of the Angarpatra Coal Company as sub-lessees under the lessee, and that their interest has not merged in the interest of Charu Chandra Mitra, the judgment-debtor in the above mentioned rent suit, which ended in a decree on 27th April, 1916. It next appears that when the decree-holders proceeded to bring the leasehold properties to sale, the Executing Court discovered that the conditional order of attachment of 4th May, 1915, was defective and on 11th June, 1917 made the following order:—“Copies of attachment, peon's reports etc., filed No. description or mention of the properties attached given in the writ (copy of which has been filed) under the circumstances ordered: Issue process of attachment of immovables fixing 3rd July for its return. Decree-holder to file process-fee at once.” Apparently nothing was done before the 3rd July by the decree-holder, but we find that without issuing a fresh attachment, the Court did proceed to issue a sale proclamation fixing 15th June, 1918, nor the sale.

3. Desirous of protecting their leasehold interest, the petitioners on 18th May, 1918 applied to the Subordinate Judge before whom the administration suit was pending, for leave to sue the receiver or in the alternative, for an order that the receiver should sell the properties subject to the right, title and interest of the petitioners. The Court called for a report from the receiver and on 4th June, 1918 recorded an order declining either to sell the property subject to the right of the petitioners or to give leave to the petitioners to sue the receiver. Against that order the petitioners came to this Court on the 13th June, 1918, and obtained a Rule calling upon the Receiver to show cause why leave should not be granted. There was an application for an interim stay of the sale which was refused, but we learn that in fact no sale has yet taken place. Since the issue of notice upon the receiver and in anticipation of sanction from this Court, the petitioners have filed their threatened suit. Now the question for decision ??? whether or not this Court should interfere with the Subordinate Judge's order refusing leave to the petitioners to sue me Receiver. It will be convenient to deal with the merits of the case first. The general principle applying to cases of this kind in which application is made to sue a Receiver, in respect of properties in charge of the Court, is that unless the Court is satisfied that there is no question at all to try or there is no legal foundation to the claim, leave should not, as a matter of course, be refused. The onus is, therefore, strongly, on the Court to show that no foundation for any claim has been made out. In this case the petitioners contend that they are the purchasers of the right, title and interest of the Angarpatra Coal Company and that on the 4th May, 1918 when the conditional order of attachment was made, Charu Chandra Mitra, the defendant, had no possession or title thereto. In the second place the petitioners desire to establish that they and not Charu Chandra Mitra are the real perchasers of the interest of the Coal Company. If they can establish that Charu Chandra Mitra is their benamidar and that he acquired that status on 4th November, 1914, then obviously that which can be sold in pursuance of the attachment of the 4th May, 1914, must be something exclusive of the right, title and interest of the Angarpatra Coal Company. It is contended by the opposite party and found by the Subordinate Judge that the petitioners have no bona fide claim, that the allegation of benami purchase is on the face of it false and that on the 4th May, 1914, what was attached, was the whole right, title and interest of Charu Chandra Mitra in the 101 bighas of land leased out to Nagendra Nath Mitra. It is also argued as an alternative that if the property purchased by Charu Chandra Mitra on the 4th November, 1916, was not included within the property attached on the 4th May, then upon the principle of merger that which was acquired on the 4th November, 1916, merely augmented the right, title and interest which Charu Chandra Mitra had on the 4th May, 1914, and, therefore, is liable to be sold in execution of the decree, and reliance is placed in support of this contention on Umes Chunder Sircar v. Zahur Fatima(1).

4. Now if the petitioners can establish as a fact that there was a benami purchase made in their behalf and with their money by Charu Chandra Mitra, then obviously the argument as to augmentation is needless. That contention can only be supported if Charu Chandra was the real purchaser and the true owner of the properties on the 4th November. In the case above cited, the interest of a mortgagor was augmented by a subsequent addition of properties and what was attached, was the whole right, title and interest of the mortgagor judgment-debtor and it was held that it was perfectly competent to the decree-holder to bring to sale by reason of the principle of accession all the properties of which the mortgagor became possessed after the mortgage, and before the sale. That case, however, has no application here. The question of merger and augmentation can only apply if in fact the whole right, title and interest of Charu Chandra was attached on the 4th May and Charu Chandra was the true owner on the 4th November, 1916. Now both these points are points which the petitioners desire to establish by a suit. On what materials then has the Court below come to the finding that there is no shadow of a claim, that there is no legal foundation and that there is no question for trial?

5. It appears to me that the learned Judge has proceeded on suspicion. He may be right but the petitioners in an application to sue the Receiver, are entitled to an inquiry upon the materials furnished by the parties, and if they so desire, to ask the Court to take evidence if the Court is not inclined to give leave as a matter of course. The question whether there was a benami sale, is a question of fact which cannot be determined without investigation. The question whether the whole right, title and interest of Charu Chandra was attached on the 4th May, is again a question which certainly requires a fuller investigation than that which has been made by the learned Subordinate Judge. From the attachment order it appears that no boundaries are shown to have been published by the Court on the 4th May, 1914. But it is contended by the opposite party before us that the Court was subsequently satisfied that the attachment order was sufficient, and on that footing the Court proceeded to advertise the properties for sale. That again is a question which depends upon evidence. If it should turn out that there was no specification of boundaries which would entitle the decree-holder to sell the properties which are now in suit, the petitioners will be seriously prejudiced if the sale is allowed to proceed. The learned Subordinate Judge, however, brushes these considerations aside by the observation that the application is premature and that in any event the petitioners will have ample remedy after the sale by bringing a suit against the purchasers. In my opinion such a course will seriously prejudice the petitioners.

6. If the properties of the petitioners are about to be wrongfully sold, then it is very little comfort to inform them that they will have ample remedy after the properties have passed to third party purchasers. It is for these cases that an action in the nature of a “quia timet” is designed so that the party who apprehends injury to his property, may obtain a declaration from the Court as to his interest in the property before any damage in fact takes place. Therefore unless the Court can show strong ground for throwing out the petitioners application, I think the petitioners are entitled to get leave to sue the Receiver. It is not necessary in this connection to cite many authorities. The principle is well recognised in the Courts in England and has been followed among others in the case of Lane v. Capsey(2) and in Pound, Son and Hutchings, In re(3). In my opinion upon the materials at our disposal there is prima facie evidence of a case to be tried and the foundation of a legal claim.

7. We will now deal with the legal question which has been raised as to our jurisdiction to interfere with the order of the Subordinate Judge either under Section 115 of the CPC, or under Section 107 of the Govt of India Act, 1915. Reliance has been placed by Mr. Hasan Imam on behalf of the opposite party on Balakrishna Udayar v. Vasudeva Aiyar(4), where their Lordships of the Privy Council affirmed the principle, that S. 115 applies to jurisdiction alone, or the irregular exercise, or the nonexercise of it, or the illegal assumption of it. In other words, where a Court with jurisdiction makes an order erroneous either in law or in fact that order cannot be revised under S. 115. To like effect has reliance been placed upon Kumar Chandra Kishore Roy v. Basat Ali(5).

8. On the point whether the decision in the present matter was a case within the meaning of Section 115 of the CPC, I will assume that it was. An ex parte application or an application to a Court for leave to sue a Receiver may upon the analogy of the case which their Lordships of the Privy Council were called upon to consider in the above cited decision may, I think, be held to be covered by S. 115. Then a more serious question is whether there was material irregularity in the exercise of the jurisdiction which was admittedly vested in the Subordinate Judge. In my opinion the omission of the Subordinate Judge to go into the allegations which were made, was material irregularity. If a Court which has jurisdiction to try a suit, declines to go into evidence when required to do so, but merely proceeds to dispose of the suit upon the pleadings or upon allegations made in petitions, that is material irregularity in the exercise of jurisdiction which is, I think, revisable under Section 115 of the CPC. Upon the view that I take of the proceedings of the learned Subordinate Judge, there was such material irregularity in this case. On the other hand if he had investigated the facts either by taking evidence or by some other adequate mode of enquiry, I should have said that there was no irregularity in the exercise of his jurisdiction and our interference would not have been warranted on that ground.

9. But apart from S. 115, the petitioners are on much stronger ground under Section 107 of the Govt of India Act. There is no statutory provision which requires a party to take the leave of the Court to sue a Receiver. The rule has come down to us as a part of the rules of equity, binding upon all English Courts of Justice in this country. It is a rule based upon public policy which requires that when the Court has assumed possession of a property in the interest of the litigants before it, the authority of that Court is not to be obstructed by suits designed to disturb the possession of the Court. The institution of such suits is in the eye of the law contempt of the authority of the Court and therefore the party contemplating such a suit, is required to take the leave of the Court so as to absolve himself from that charge. The grant of such leave is made not in exercise of any power conferred by Statute but in exercise of the inherent power, which every Court possesses to prevent acts which constitute or are akin to an abuse of its authority. Now it is a settled principle that the High Court is entitled in exercise of its powers of superintendence to correct and supervise subordinate Courts whenever they appear to have wrongly exercised their inherent powers. The question is fundamentally one of jurisdiction and therefore attracts the operation not only of Section 107 of the Govt of India Act, but also of Section 115 of the CPC.

10. This jurisdiction under Section 107 of the Govt of India Act, must of necessity be vague, but there is no doubt that there is a residue of jurisdiction which the Court will always exercise whenever it appears that there has been something in the nature of a denial of the right of fair trial. In the case before us there has been, in my opinion, such a denial. As to what the effect of the grant of leave will be, it is scarcely our province to inquire at the present moment, but we may mention that an offer was made by Mr. Das on behalf of the petitioners that he was ready to pay the whole of the decree money into Court pending the trial of the suit. No doubt an application will be made in the Court in which the suit is instituted for an injunction prohibiting the defendants from proceeding with the sale. Whether that injunction will be granted, and, if so, on what terms, are matters for the trial Court. Possibly the parties may be able to arrange that the whole of the decree money or at least that part of it which is due to the opposite party as proprietors of the two-thirds share, may be paid into Court and that those proprietors will be permitted to draw it out on giving adequate security for the same. We have however already observed that we cannot at this stage give any directions upon these matters. The result is that the application is allowed with costs. Hearing fee three gold mohurs.

11. Thornhill, J.:— I agree.

V.S/R.K

12. Application allowed.