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Sankunni Nayar And Raman Nambiar v. Narayanan Nambudri And Anr.
Factual and Procedural Background
Two appeals (Nos. 779 and 943) challenge the same decree. The suit below was brought by the plaintiff for possession of two parcels of land alleged to be jenm property of the plaintiff's house (mana) which had been demised on kanom for Rs. 412-9-2 to a former karnavan of defendants 2 to 15 in 1864-65. The lands had been sold in 1874 in execution of a decree in Original Suit No. 232 of 1868.
Plaintiff's case: the 1874 purchase at the execution sale was made by Raman Nambiar, the first defendant's late karnavan, benami for the plaintiff's mana. Raman Nambiar had been appointed manager of the plaintiff's mana by the plaintiff's mother after the plaintiff's father died; the plaintiff was then an infant (aged two years in 1872-73). Raman Nambiar continued as manager until 1878-79 when the first defendant succeeded him as kariastan. Plaintiff alleged that when the kanom was renewed in 1888-89 to the second defendant, at the advice of the first defendant, the plaint lands were fraudulently excluded, giving rise to this suit.
Defendants' positions and procedure: the first defendant denied that his karnavan or he ever acted as manager for the plaintiff's mana, pleaded that the 1874 purchase was made by his karnavan with his own money for his own tarwad (not benami for the plaintiff), and raised objections that the suit was barred by Sections 30 and 317 of the Code of Civil Procedure, bad for misjoinder of causes of action, and time-barred (arguing plaintiff attained majority more than three years before institution of suit). Defendants 2 to 5 supported the first defendant; the remaining defendants allowed the suit to proceed ex parte.
Findings below: the two lower Courts found that at the date of the purchase the first defendant's karnavan was managing on behalf of the plaintiff's mana; that the purchase was in fact for the plaintiff's illom though paid for initially by the karnavan; that there was no adverse possession until January 1889 when plaintiff granted the renewal kanom and the first defendant executed a kanom deed shortly after for the plaint lands; and that the suit was brought within three years of plaintiff's attainment of majority (the cause of action arising in January 1889). The lower Courts also held the suit was not bad for misjoinder or under Section 30 of the CPC.
Legal Issues Presented
- Whether the suit is barred by Section 317 of the Code of Civil Procedure (i.e., whether no suit can be maintained against a certified purchaser on the ground that the purchase was made on behalf of another).
- Whether the suit is barred under Section 30 of the Code of Civil Procedure or is bad for misjoinder of causes of action.
- Whether the suit is time-barred (whether the plaintiff attained majority more than three years before institution of the suit).
Arguments of the Parties
First Defendant / Appellant (as presented in the opinion)
- Denied that his karnavan or he ever managed the plaintiff's mana or acted as agent for the plaintiff.
- Asserted that the 1874 purchase was made by his karnavan with his own money and for his own tarwad, not benami for the plaintiff.
- Contended that the suit is barred by Sections 30 and 317 of the Code of Civil Procedure.
- Maintained the suit was bad for misjoinder of causes of action and that it was time-barred because the plaintiff attained majority more than three years before suit.
Plaintiff / Respondent (as presented in the opinion)
- Asserted the property was jenm of the plaintiff's house and had been demised on kanom; alleged that the 1874 sale was purchased benami by Raman Nambiar (first defendant's karnavan) for the plaintiff's mana, and that Raman was the manager appointed for the mana when plaintiff was an infant.
- Alleged that the plaint lands were fraudulently excluded when the kanom was renewed in 1888-89.
- Relied on factual findings that there was no adverse possession until January 1889 and that the suit was within three years of plaintiff attaining majority.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Aldwell v. Ilahi Bakhsh, I.L.R. 5 All. 478 | Supported the proposition that Section 317 of the present Civil Procedure Code has not altered in principle the rule of law contained in Section 260 of Act VIII of 1859. | Cited to show continuity between the old provision (Section 260) and Section 317 and to frame the interpretive approach to Section 317. |
| Sohun Lall v. Lala Gya Pershad, 6 N.W.P. 265 | Held that Section 260 of Act VIII of 1859 did not preclude a suit by a decree-holder against the certified purchaser for the purpose of establishing his right to bring the property to sale in execution of the decree. | Referred to by the Subordinate Judge to suggest that, if a decree-holder can sue a certified purchaser to establish a right to sale, a judgment-debtor might also be able to bring a suit to declare a purchase benami; the appellate Court discussed this reasoning in the context of legislative intent behind Section 317. |
| Rama Kurup v. Sridevi, I.L.R. 16 Mad. 290 | Stated the object of the section is to put a stop to benami purchases at execution sales and that the object must be carried out in all cases; indicated that the law provides that a suit shall not be maintained against a certified purchaser on the ground that the purchase was benami. | Quoted to support the proposition that Section 317 was intended to prevent benami purchases at execution sales and to be enforced strictly, even where fraud might be suggested. |
| Ramakrishnappa v. Adinarayana, I.L.R. 8 Mad. 511 | Observed that Section 317 enables certified purchasers and those claiming under them to avoid arrangements made with them in regard to benami purchases (i.e., prevents such arrangements being enforced against certified purchasers). | Used to describe the effect and limitation of Section 317 and to contrast a pure benami situation with the facts of the present case. |
| Lokhee Narain Roy Chowdhry v. Kalypuddo Bandopadhya & Shamapuddo Bandopadhya, L.R. 2 I.A. 154 (Privy Council) | Held that when the certified purchaser is the plaintiff, the real owner, if in possession and honestly in such possession, may rely on the benami purchase as a ground of defence. | Cited as a limitation to the general rule that benami purchases cannot be relied on as a ground of action against certified purchasers; used to highlight boundaries of the protection given to certified purchasers. |
| Section 260 of Act VIII of 1859 | Provided that any suit against the certified purchaser on the ground that the purchase was made on behalf of another shall be dismissed; certificate to state name of actual purchaser. | Quoted and compared to Section 317 as the antecedent rule; used to interpret the scope and effect of the present Section 317. |
Court's Reasoning and Analysis
The Court began by identifying Section 317 of the Civil Procedure Code as the principal statutory provision in controversy. Section 317 declares that "no suit shall be maintained against the certified purchaser (at a Court sale) on the ground that the purchase was made on behalf of any other person, or on behalf of some one through whom such other person claims." The judges reviewed prior authorities and the relationship between Section 317 and the earlier Section 260 of Act VIII of 1859, citing Aldwell v. Ilahi Bakhsh to show that the new section did not alter the earlier rule in principle.
The Subordinate Judge had relied on Sohun Lall v. Lala Gya Pershad to suggest that certain suits might proceed even under the old provision; but the appellate Court considered Rama Kurup v. Sridevi, which emphasized that the object of the section is to stop benami purchases at execution sales and to enforce the prohibition broadly. The Court acknowledged Ramakrishnappa v. Adinarayana's description of Section 317's effect in enabling certified purchasers and those claiming under them to avoid arrangements in the nature of trusts, and also noted Lokhee Narain Roy Chowdhry as indicating that the rule has limits when the certified purchaser is the plaintiff and the real owner is in possession.
Having set out the statutory provision and the relevant authorities, the Court then applied the statutory rule to the factual findings made by the lower Courts. The crucial factual findings (accepted on appeal) were:
- At the time of the 1874 sale Raman Nambiar was the manager (agent) of the plaintiff's mana and purchased the land as such manager, although he supplied the purchase money with the understanding that he was to be repaid.
- Other potential bidders at the sale were dissuaded from bidding because they were led to believe the purchase was being made by Raman Nambiar as manager for the minor's mana, and the property (market value approximately Rs. 2,000) was knocked down for Rs. 230.
- Raman Nambiar never asserted the property as his own, and he continued to be treated as agent; after his death the first defendant acted as agent until the date of controversy; there was no adverse possession until 1889 when the renewal kanom excluded the plaint lands.
The Court explained that Section 317 addresses pure benami purchases made to defeat rights, and the statutory protection seeks to prevent suits directed to prove a purchase was benami. However, the present case was not a simple benami transaction: the purchaser (Raman Nambiar) acted as manager/agent for the plaintiff's mana, the purchase prevented competitive bidding and depressed the sale price, the purchaser never asserted title as his own, and the land was treated as belonging to the mana until 1889. Given these facts, the Court concluded it would be contrary to justice and to the substance of the transaction to allow the first defendant to rely on Section 317 to secure the property for himself.
On remedies, the Court held that although the plaintiff succeeded on the primary contention, the first defendant was nevertheless entitled to interest on the Rs. 230 (the sale price) from the date of sale (25 July 1874). The Court therefore modified the lower Courts' decrees to direct payment of interest on the Rs. 230 at 6% per annum from the date of sale to the date of payment, and ordered that plaintiff and first defendant pay each other costs of the appeal proportionate to amounts allowed and disallowed.
Holding and Implications
Holding: The Court upheld the substance of the lower Courts' findings that the purchase at the 1874 execution sale was made by Raman Nambiar acting as manager/agent for the plaintiff's mana (not a pure benami purchase enabling the first defendant to rely on Section 317). The lower Courts' decrees were affirmed in principle but modified to award interest and to provide for proportionate costs between the parties.
Direct consequences imposed by the Court:
- The plaintiff is to pay the first defendant interest at 6% per annum on Rs. 230 from 25 July 1874 until payment.
- Plaintiff and first defendant will pay costs of the appeal to each other proportionate to the amounts respectively allowed and disallowed.
Implications for precedent and broader law: The opinion applies and interprets Section 317 in light of earlier authorities (including the antecedent Section 260), but does not purport to create a new legal rule beyond those interpretations. The decision distinguishes a pure benami purchase scenario (which Section 317 seeks to preclude suits about) from cases where the purchaser was in fact an agent/manager who purchased in that capacity and where facts show suppression of competitive bidding and continued treatment of the property as belonging to the principal; in such circumstances the protection of Section 317 may not defeat the principal's claim. The opinion does not announce a novel principle beyond that application to the specific facts.
1. These two appeals are against the same decree, the appellant in No. 779 being the second defendant, and appellant in No. 943 the first defendant.
2. The suit was brought by plaintiff for possession of two items of land alleged to be the jenm property of plaintiff's house and demised by plaintiff's ancestor on kanom for Rs. 412-9-2 to a former karnavan of defendants 2 to 15 in Kollam 1040 (1864-65). Plaintiff's case is that on the land being sold (in 1874) in execution of decree in Original Suit No. 232 of 1868, obtained against plaintiff's father, it was purchased by first defendant's late karnavan Raman Nambiar benami for plaintiff's mana (house), the said Raman Nambiar having been appointed by plaintiff's mother manager of plaintiff's mana, plaintiff being an infant aged two years in 1048 (1872-73) when his father died; that Raman Nambiar continued as such manager till 1054 (1878-79), when first defendant was appointed as his successor and is still the kariastan; that in 1064 (1888-89) when the kanom was renewed to second defendant at the advice of the first defendant, the plaint items were fraudulently excluded. Hence this suit.
3. The first defendant denied that either his karnavan or himself ever managed on behalf of plaintiff's mana, and pleaded that the purchase in 1874 was made by his karnavan with his own money and on account of his own tarwad, and not benami for plaintiff; that the suit was opposed to Sections 30 and 317 of the Code of Civil Procedure, and also bad for misjoinder of causes of action; further, that it was time-barred, and that plaintiff attained his majority more than three years before the institution of the suit.
4. Defendants 2 to 5 supported first defendant, and the other defendants allowed the suit to proceed ex parte as far as they were concerned.
5. The two lower Courts have concurred in finding that at the date of the purchase of the plaint property, first defendant's karnavan was managing on behalf of plaintiff's mana; that he did in fact purchase the property for the plaintiff's illom, though the money paid was first defendant's karnavan's own; that there was no adverse possession till January 1889 when plaintiff granted the renewal kanom and first defendant executed the kanom deed XXIII shortly after for the plaint lands; also, that the suit is brought within three years of plaintiff's attainment of majority, and that the cause of action did not arise till January 1889. It has further been found that the suit is not bad either for misjoinder of causes of action or under Section 30 of the Code of Civil Procedure.
6. The principal contention before this Court is that the suit is bad as being opposed to Section 317 of the Code of Civil Procedure, which declares that
"no suit shall be maintained against the certified purchaser (at a Court sale) on the ground that the purchase was made on behalf of any other person, or on behalf of some one through whom such other person claims."
7. The District Munsif held the above section to be no bar to the suit, because "the auction was held and the sale certificate granted before the new Act (X of 1877) came into force and the provisions of section 317 apply to a certified purchaser under the Act." But, as well observed by Mahmood, J., in Aldwell v. Ilahi Bakhsh I.L.R. 5 All. 478 Section 317 of the present Civil Procedure Code has' not altered in principle the rule of law contained in section 2601 of the old code (viii of 1859). The Subordinate Judge's reason for holding this suit not to fall within the prohibition contained in Section 317 is because it was held in Sohun Lall v. Lala Gya Pershad 6 N.W.P. 265 that Section 260 of Act VIII of 1859 did not preclude a suit by a decree-holder against the certified purchaser for the purpose of establishing his right to bring the property to sale in execution of the property of the judgment-debtor, and "if so," says the Subordinate Judge, "I do not see why the judgment-debtor himself cannot bring a suit for a declaration that the property was purchased by his agent benami for himself." I imagine, however, that it is this latter case that the Legislature had expressly in view in enacting Section 317, As observed by the Chief Justice and Handley, J., in Rama Kurup v. Sridevi I.L.R. 16 Mad. 290 the object of the section is to put a stop to benami purchases at execution sales, and this object can only be carried out by enforcing it in all cases without regard to consequences." As further observed in the same judgment. "It is not a sufficient reason for declining to carry out the express terms of the section; that to do so would be to allow a fraud to be perpetrated. The person in whose name a purchase has been made for the benefit and with the money of another, of course, commits a fraud in claiming the property as his own. Nevertheless, the law says that a suit shall not be maintained against him on the ground that the purchase was benami and thus provides that his fraud shall prevail." As was also remarked in Ramakrishnappa v. Adinarayana I.L.R. 8 Mad. 511" the effect of Section 317 can only be taken to be to enable certified purchasers and those claiming under them to avoid any arrangement made with them in regard to the purchase in the nature of a trust."
8. The present, however, is not a case of benamidar pure and-simple. It is found that Raman Nambiar was, at the time of the purchase, manager on behalf of plaintiff, who was an infant, and that other would-be purchasers of the property abstained from bidding, because they were given to understand that the purchase by Raman Nambiar was bung made by him as such manager and on behalf of the minor. Consequently, property worth Rs. 2,000 was allowed to be knocked down for Rs. 230. Moreover, Raman Nambiar never set up any claim to the property as his own. Such being the case, I do not think the first defendant can be allowed to succeed in his attempt to secure the property for himself under colour of Section 317 of the Civil Procedure Code.
9. But first defendant is entitled to interest on the Rs. 230 decreed to him from 25th July 1874, the date of sale. The lower Courts' decrees will, therefore, be modified by directing plaintiff to pay to first defendant interest at 6 per cent, per annum from 25th July 1874 to date of payment on the Rs. 230 decreed to first defendant. Plaintiff and first defendant will pay each' other costs of the appeal proportionate to the amount allowed and disallowed.
Muttusami Ayyar, J.
10. I come to the same conclusion. The question for determination in these second appeals is whether upon the facts found the decision of the Courts below is correct. The substantial parties to this suit are the son of the execution-debtor in Original Suit No. 232 of 1868 and the representative of the certified purchaser at the Court sale held in execution of the decree passed therein. It is provided by Section 317 of the Civil Procedure Code that no suit shall be maintained against the certified purchaser on the ground that the purchase was made on behalf of any other person, or of some one through whom such other person claims. Although Act VIII of 1859 was in for be when the sale took place in the present case, Section 317 has not, as observed in Aldwell v. Ilahi Bakhsh I.L.R. 5 All. 478 altered in principle the rule of law contained in Section 260 of Act VIII of 1859. That rule is, not that a benami purchase is void altogether, but that it shall not be available as a ground of action against a certified purchaser. The Privy Council held in Lokhee Narain Roy Chowdhry w. Kalypuddo Bandopadhya and Shamapuddo Bandopadhya L.R. 2 I.A. 154 that when the certified purchaser is the plaintiff, the real owner, if in possession, and if he honestly obtained that possession, may rely on the benami purchase as a ground of defence. It was also pointed out by this Court in Ramakrishnappa v. Adinarayana I.L.R. 8 Mad. 511 that a benami purchase is not invalid even as a ground of claim as against defendants who are neither certified purchasers nor claim under them. Another limitation of the rule is that indicated by the second paragraph of Section 317, viz., that the protection vouchsafed to a certified purchaser does not extend to cases of fraud. The suit from which these second appeals arise was brought against the anandravan of the certified purchaser, and the ground on which the Courts below rest their decision is that the plaintiff is the beneficial owner, and that the certified purchaser under whom the first defendant claims is benami purchaser or his trustee. This ground of decision is inconsistent with the effect of Section 317 which is described in Ramakrishnappa v. Adinarayana I.L.R. 8 Mad. 511 as enabling the person claiming under the certified purchaser to avoid any arrangement made regarding the benami purchase. If the facts found disclosed a benami purchase and nothing more, the appeals must prevail. But it is also found that Raman Nambiar was, at the time of the Court sale, managing the affairs of respondent's illom as its agent, and that he bought the land as such, though he advanced the purchase money on the understanding that he was to be repaid. It is also found, as a fact, that the market value of the land in dispute was Rs. 2,000, whilst it was bought at the Court sale for Rs. 230. The District Munsif observes that there is strong evidence to show that numerous persons who went to bid at the Court sale were dissuaded from doing so by Raman Nambiar, who represented to them that he was buying the land for the use of respondent's illom. It is also found that Raman Nambiar continued to be the agent of the illom till his death, and that after him, the first defendant was agent until the date of the controversy which resulted in this litigation. Until 1889, the kanom originally granted by the illom was outstanding, and it does not appear that Raman Nambiar ever asserted his title to the land in dispute, or that the first defendant asserted the right of his tarwad to it prior to 1889. Under these circumstances, I consider that the decision of the Courts below can be supported on the ground that Raman Nambiar bought the land as agent of plaintiff's illom subject to a charge in his favour for the amount advanced by him, and that until 1889 the land was treated as the property of the illom; otherwise an agent would be enabled to make a profit out of his principal's property, which he intended to deal with as agent, and continued to do so till 1889, and thereby to turn the understanding on which his name was inserted in the certificate and the land was since held into a means of perpetrating fraud on his principal. I also think that interest should be awarded on Rs. 230 in the decree proposed.
11. I concur with my learned colleague on the other questions raised on second appeal and in the decree proposed by him.
Section 260: The certificate shall state the name of the person who at the time of sale is declared to be the actual purchaser, and any suit brought Certificate to state the against the certified purchaser on the ground that the purchase name of actual purchaser. was made on behalf of another person not the certified purchaser, though by agreement the name of the certified purchaser was used, shall be dismissed with costs.
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