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Case Number

Second Appeal No. 966 of 1917

Judges

Mullick
Jwala Prasad, JJ.

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Smart Summary

Judgment Summary — Mullick, J. (with J. Jwala Prasad agreeing)

Factual and Procedural Background

This litigation, which lasted six years, arose from a sale in execution of a non-transferable occupancy holding. On 25 September 1913 the plaintiffs sued three sets of defendants seeking to set aside the sale of the holding occupied by the recorded tenants (defendants 3 and 4). The landlord, defendant third party Mr. Forbes, had earlier sued the recorded tenants for rent, obtained an ex parte decree, and in execution caused the holding to be sold; the purchaser at auction was defendant 1 (Bhadai), and the sale was confirmed in November 1910.

The plaintiffs claimed to be private purchasers of about four acres of the holding and alleged that defendant 2 purchased the remainder; they challenged the sale on the ground of fraud between the decree-holder and defendant 2 in relation to the suit, decree and sale.

At first instance the Munsif decided all material issues in favour of the plaintiffs but dismissed the suit as not maintainable because the plaintiffs had not made an application under Order 21, Rule 92 (CPC) to set aside the sale and could not institute a separate suit after confirmation. On appeal the Subordinate Judge set aside the decree and remanded the suit for trial, framing two additional issues: (1) whether defendant 1 was a benamidar of defendant 2 (and, if not, whether he was privy to the alleged fraud), and (2) on what terms the sale should be set aside. The Munsif, after remand, found defendant 1 to be the benamidar of defendant 2 and decreed the suit; the Subordinate Judge later affirmed the benami finding and dismissed the defendants' appeal. Defendant 1 appealed to the present Court.

Legal Issues Presented

Whether, under Order 21, Rule 92 (CPC), a suit to set aside a confirmed sale is maintainable after confirmation.
Whether the plaintiffs' suit was barred by limitation (Article 12, Schedule I, Limitation Act) in light of an admission in the plaint that the plaintiffs knew of the sale more than a year before instituting the suit.
Whether there was any finding or evidence that defendant 2 had a connection with the alleged fraud by the decree-holder (i.e., whether the sale could be set aside as against defendant 2 as well as defendant 1, particularly in light of the benami finding regarding defendant 1).
Whether the sale was a nullity because, after the decree, one of the judgment-debtors died and the sale was held without issuing process upon his heirs.
Whether the Subordinate Judge's remand order should be treated as an order under Order 41, Rule 23 and/or Rule 25 (CPC), or as an order under the inherent powers of the Court (Section 151), with attendant consequences for appealability.

Arguments of the Parties

Appellant's Arguments (defendant 1)

Under Order 21, Rule 92 of the CPC no suit is maintainable after confirmation of the sale; therefore the plaintiffs' suit should have been dismissed as not maintainable.
The plaintiffs' admission in the plaint that they knew of the sale more than a year before instituting suit meant the suit was barred by limitation under Article 12, Schedule I of the Limitation Act.
There was no finding that defendant 2 had any connection with the alleged fraud by the decree-holder, and accordingly the sale could not be set aside as against defendant 2; the benami finding against defendant 1 did not dispose of whether the true purchaser (defendant 2) was a bona fide purchaser for value.
Alternatively, the sale was a nullity because one judgment-debtor died after the decree and the sale was held without issuing process upon his heirs.

Respondents' Arguments (plaintiffs / respondent counsel)

The Subordinate Judge's earlier proceedings (framing additional issues and remanding) amounted to acceptance that defendant 2 was in conspiracy with the decree-holder, making it sufficient to determine only whether defendant 1 could claim to be a bona fide purchaser for value.
The omission of defendant 2 to enter appearance in the original execution proceedings supported the inference of conspiracy or participation by defendant 2 with the decree-holder.
Regarding the allegation of omission to serve heirs after a judgment-debtor's death, it was contended that such omission rendered the sale a nullity.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Khiarajmal v. Daim	The omission to implead persons who were not represented in trial may render a decree void and the subsequent sale bad because the decree itself was void for want of jurisdiction.	The Court considered this authority but found it did not assist the respondents' case; Khiarajmal involved sale of property of persons not represented in the trial, rendering the decree void, whereas the facts in the present case differed and did not show a void decree.
Malkarjun v. Narhari	Where a decree is a valid decree, the omission to bring the true heir of a deceased judgment-debtor on the record is an irregularity which does not vitiate a sale held with jurisdiction.	The Privy Council distinguished Malkarjun from Khiarajmal; the Court relied on this distinction in assessing whether the sale before it was a nullity or merely irregular.
Syed Muhammad Rafi v. Syed Muhammad Askari	Application of the principle in Khiarajmal within this Court's jurisprudence (cited as a follow-up authority).	The Court noted that this Court has followed the principle in Khiarajmal in that earlier case, but nonetheless concluded, on the facts and the procedural history of the present case, that the present sale could not be treated as a nullity.

Court's Reasoning and Analysis

The Court proceeded through the principal contentions in sequence and applied both procedural and substantive law as follows:

On the maintainability point under Order 21, Rule 92 (CPC), the Court observed that the Subordinate Judge had set aside the first-instance decree and remanded the suit under Order 41, Rule 23 and also under Rule 25. The Munsif had decided other issues in favour of the plaintiffs but dismissed the suit solely on the preliminary point of maintainability. The Court held that where a suit is disposed of on such a preliminary point, the order is properly regarded as an order under Rule 23. The fact that the remand order also added issues under Rule 25 did not convert the whole order into one made under the Court's inherent powers; the two orders could coexist on the same document.
Because the defendants had the procedural avenue to appeal against the decision on the preliminary point (they could have appealed the decree or the remand under Order 43), and they did not do so, the decision of the Subordinate Judge that the suit was maintainable became final as regards that question. The omission to appeal precluded defendants from attacking that decision in the present second appeal.
On the limitation point, the Court declined to entertain a new plea first raised in second appeal where its resolution required a factual finding. Although the plaint contained an admission that the plaintiffs knew of the sale more than a year before instituting suit, that admission was capable of being rebutted by evidence, and there was no finding based on trial evidence that the plaintiffs had knowledge more than twelve months earlier. The Court noted the rule that points of law requiring concurrent findings of fact cannot be raised for the first time in second appeal.
Concerning whether dispossession was by the landlord (which would affect limitation under the Bengal Tenancy Act), the Courts below had found dispossession was not by the landlord. The present contention that defendant 1 was put into possession in furtherance of a conspiracy by the landlord was rejected on the ground that allegations of constructive dispossession require clear evidence; the Court would not favour such allegations in the absence of proof that the landlord himself dispossessed the tenant.
The Court accepted the appellant's third contention. On the record there was no finding by any court that defendant 2 had any connection with the fraud attributed to the decree-holder. The last Court of fact had found the decree valid but the sale irregular and fraudulent; nonetheless, the judgments contained no finding that defendant 2 participated in the fraud. The Court found no evidence of any admission or proof that defendant 2 was in conspiracy with the decree-holder. The benami finding against defendant 1, standing alone, did not dispose of whether defendant 2 (the principal) was a bona fide purchaser for value. In the absence of affirmative evidence against defendant 2, the Court concluded it must assume there was no fraud by defendant 2.
On the contention that the sale was a nullity because one judgment-debtor died and the sale was held without process upon his heirs, the Court reviewed Khiarajmal v. Daim and the Privy Council's distinction with Malkarjun v. Narhari. The Court held that a sale is a nullity only if held without jurisdiction; where the decree itself is valid and any omission to bring heirs on the record is merely irregular, the sale is not automatically void. Further, the point had not been taken at any earlier stage, and it was possible (the Court observed) that the defendants might have been able to show the continuing judgment-debtor was entitled to represent the heirs.

Holding and Implications

APPEAL ACCEPTED; the decree of the lower appellate Court is set aside, and the plaintiffs' suit is dismissed.

Consequences:

The appeal by defendant 1 succeeded: the decree in favour of the plaintiffs passed by the lower appellate court is set aside.
The plaintiffs' suit to set aside the sale is dismissed. Costs were awarded against the plaintiffs in all Courts.
The decision rests on procedural finality (failure to appeal the preliminary maintainability ruling), the absence of evidence linking defendant 2 to the alleged fraud, and the Court's assessment that the sale was not a nullity on the facts before it.
This opinion does not articulate any broader principle as a new precedent beyond applying established lines of authority (as discussed in the reasoning); the direct effect is on the parties as described above.

Additional note: Jwala Prasad, J. agreed with the result (as recorded in the opinion).

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Bhadai Sahu v. Manowar Ali

Mullick, J.:— This is a litigation which has lasted six years. It appears that on 25th September, 1913 the plaintiffs brought a suit against three sets of defendants to set aside the sale of a nontransferable occupancy holding held by the defendants second party, namely defendants 3 and 4.

2. The facts appear to be that defendant third party, Mr. Forbes, who is the landlord of the holdings, brought a suit against the recorded tenants defendants 3 and 4, for rent, obtained an ex parte decree, and in execution brought the holding to sale. The purchaser at the auction was defendant 1 Bhadai. The sale was confirmed in November 1910.

3. The plaintiffs claim to be private purchasers of about four acres out of the holding and allege that defendant 2 is a private purchaser of the rest of the holding. They attacked the sale on the ground that there was fraud between the decree-holder and defendant 2 in the matter of the suit, the decree and the sale. The Munsif who tried the suit in the first instance decided all the material issues in favour of the plaintiffs, but he came to the conclusion that the suit was not maintainable because the plaintiffs had not made an application under O. 21, R. 90 of the CPC, to set aside the sale, and that they could not be permitted to institute a separate suit for that purpose after confirmation.

4. The plaintiffs thereupon appealed, and the Subordinate Judge, disagreeing with the finding of the Munsif upon the point of maintainability, set aside the whole decree and remanded the suit for trial. At the same time he added two new issues, which ran as follows:

(1) Whether defendant 1 is a benamidar of defendant 2; if not whether he is privy to the fraud by which the sale was brought about (2) On what terms the sale should be set aside, if it be set aside at all?

5. The case then went back to the Munsif, who came to the conclusion that defendant 1 was in fact the benamidar of defendant 2. He held that in consequence of this finding it was not necessary to consider whether defendant 1 was privy to the fraud by which the sale was brought about. The Munsif in the result decreed the suit against the defendants.

6. There was again an appeal and the Subordinate Judge affirmed the finding of the Munsif on the point of benami and dismissed the appeal.

7. Defendant 1 now comes on second appeal to us. The first point taken by the learned vakil for the appellant is that under O. 21, R. 92 of the CPC, no suit is maintainable after confirmation.

8. Now this point would perhaps have been a good point if the previous proceedings in this suit had not stood in the way of the appellant.

9. In appears that the order of remand made by the Subordinate Judge on 28th April, 1915 was made under O. 41, R. 23, and also under R. 25 of the CPC. It is said that the order could not have been an order under R. 23, because the suit was not disposed of upon a preliminary point and because the Munsif had in fact determined and recorded findings upon all the issues in the suit.

10. In my opinion this argument is not well founded. The findings upon all the other issues, except the issue as to maintainability, were in favour of the plaintiffs, and the sole-reason for dismissing the suit was that in the opinion of the Court the suit was not maintainable by reason of the provisions of O. 21, R. 92.

11. It is quite clear in these circumstances that the suit was disposed of upon a preliminary point. The contention that a Court cannot be said to dispose of a suit upon a preliminary point, if it takes the trouble to decide other issues framed in the suit, cannot be entertained. Then it is said that inasmuch as there was an order framing two new issues and remanding the suit for trial of those issues, there was an order under R. 25, and the addition of such an order makes the whole order of remand one under Section 151 of the CPC. The argument is that as it is not an order wholly and exclusively under R. 23 or R. 25 and is a composite order under the provisions of both rules, it must be an order made under the inherent powers of the Court. This argument too is one with which I have no sympathy. There is no reason why there cannot at one and the same time be an order under Rr. 23 and 25. The two orders, although made upon the same piece of paper, aye in effect quite separate, and the party affected is competent to pursue the remedy by way of appeal provided by the Code in respect of each.

12. With regard to the order under R. 23, it is open to him either to appeal against the whole decree or to appeal against the order of remand only under O. 43.

13. With regard to the order under R. 25, he has no right of appeal against the order itself but he can attack the remand in second appeal against the final decree in the case; so that I see no difficulty in regarding the order of the Subordinate Judge in this case, so far as the preliminary point is concerned, as an order under R. 23.

14. Now it was open to the defendants to appeal against that order, or against the decree. They did neither. They might also, if they had succeeded in defeating the plaintiffs upon the preliminary point, have got the Court to set aside the order so far as it related to the trial of the two additional issues; but that is not the immediate point before us. The point immediately before us is whether the omission to appeal against the decision upon the preliminary point now renders the defendants incompetent to attack the decision of the Subordinate Judge regarding that point in second appeal. In my opinion clearly it does. The decision of the Subordinate Judge therefore, holding that a suit was maintainable is, in my opinion, now final.

15. The next point raised by the learned vakil is that the suit is barred by limitation. It is pointed out that in the plaint there is an admission by the plaintiffs that they came to know of the sale more than a year before the suit was actually instituted.

16. Therefore it is said that under Article 12, Sch. 1 of the Lim. Act, the suit is barred by time.

17. Now the difficulty in the way of the defendants on this point is, that the plea as to limitation was never taken in this form either in the Court of the Mnnsif or in the Court of the two Subordinate Judges who have dealt with the case. It is now taken for the first time in second appeal.

18. Now our rule is that if a point of law requires a finding of fact for its determination, we cannot allow it to be entertained in second appeal in this Court.

19. The admission relied upon in the plaint has to be construed and is always subject to be rebutted by evidence in the suit itself. There is no finding on any evidence adduced at the trial which would go to show affirmatively that all the plaintiffs did come to know of the sale more than 12 months before the institution of the suit. I do not think in these circumstances that we should remand the suit for the taking of additional evidence upon this point. It is to be noticed that the only ground of limitation upon which the suit was resisted was that it came under the special limitation provided by the Bengal Tenancy Act.

20. With regard to this point the finding of fact in the Courts below was that the dispossession was not made by the landlord. It is now attempted to show that defendant 1 was put into possession in furtherance of a conspiracy by the landlord and that therefore the dispossession was by the landlord himself.

21. The rule in this Court is that a Court will not favour these allegations of constructive dispossession, and it must be shown on clear evidence that the landlord himself was the party who dispossessed the tenant.

22. The decisions which have proceeded on what has been called the landlords having a hand in the ouster cannot, in my opinion, be followed in the present case.

23. Therefore the point of limitation also fails. But the third ground taken by the learned vakil for the appellant seems to me one which should succeed. There is no finding by any Court that defendant 2 had any connexion with the fraud by the decree-holder. The last Court of fact has indeed found that the decree was a valid decree but that the sale was irregular and fraudulent, but I cannot discover a single sentence in any of the judgments to the effect that defendant 2 had anything to do with the decree-holder in bringing the properties to sale.

24. The learned vakil for the respondents contends that it was accepted in the Court of the Subordinate Judge, who first dealt with the case and who framed the additional issues, that defendant 2 was in conspiracy with the decree-holder and therefore all that it was necessary to determine for the ultimate decision of the suit was whether or not defendant 1 was entitled to set up the plea of being a bona fide purchaser for value.

25. I am unable to see upon what evidence such a contention can be supported. There is nothing to show that there was any admission by the defendants that defendant 2 was in conspiracy and concert with the decree-holder. The omission of defendant 2 to enter appearance in the original suit does not dispose of the matter. It was incumbent upon the plaintiffs to establish an affirmative case that notwithstanding the benami purchase by defendant 1 on behalf of defendant 2, the sale could be set aside against defendant 2. Defendant 1 was throughout contending that the sale could not be set aside and therefore the finding that he was a benamidar did not dispose of the substantial question whether or not the principal and the real purchaser was a bona fide purchaser for value.

26. We must assume therefore in the absence of evidence that there was no fraud on the part of defendant 2.

27. The learned vakil for the respondents, however takes another ground for the purpose of attacking the sale. He contends that after the decree one of the two judgment-debtors died and the sale was held without any issue of process upon his heirs. It is contended that the sale is therefore a nullity.

28. Now the sale can only be nullity if it is held without jurisdiction. Reliance is placed upon the case of Khiarajmal v. Daim(1). But that case does not really assist the respondents. In that case the property of two persons who were not represented in the trial was sold in execution; and it was held that the omission to implead them as defendants rendered the decree void and without jurisdiction and that the subsequent sale was bad because the decree itself was bad.

29. Their Lordships of the Privy Council distinguished the case of Malkarjun v. Narhari(2), on the ground that in the latter case the decree was a perfectly good decree and the omission to bring upon the record the true heir of the deceased judgment-debtor was only an irregularity which could not vitiate the sale held with jurisdiction.

30. The principle of Khiarajmal's case above referred to has been followed in this Court in the case of Syed Muhammad Rafi v. Syed Muhammad Askari(3). It is impossible therefore to say that the sale in the case now before us was a nullity. The point moreover was never taken at any stage, and it is possible that if it had been taken, the defendants might have been able to show that the sole judgment-debtor against whom the execution proceedings were continued was entitled to represent the heirs of the deceased.

31. The result therefore is that the appeal succeeds and the decree of the lower appellate Court is set aside with costs in all Courts. The suit of the plaintiffs will be dismissed.

32. Jwala Prasad, J.:— I agree.

V.S/R.K

33. Appeal accepted.

Bhadai Sahu v. Manowar Ali

Judgment Summary — Mullick, J. (with J. Jwala Prasad agreeing)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments (defendant 1)

Respondents' Arguments (plaintiffs / respondent counsel)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Bhadai Sahu v. Manowar Ali

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