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Case Number

Letters Patent Appeal No. 2 or 1897 in Appeal from Original Decree No. 172 or 1895

Attorney(S)

Sir Griffith Evans with him Babu Srinath Das and Babu Ishwar Chunder Chuckerbutty for the Appellant;
The Advocate-General (Sir Charles Paul) with him Babu L ??? Mohun Das for the Respondent.

Judges

Maclean, C.J
Trevelyan
Ghose, JJ.

Acts

sec. 36 of the Revenue Sale Law (Act XI of 1859)

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Smart Summary

Structured Summary of the Opinion — Letters Patent Appeal (Revenue Sale)

Factual and Procedural Background

This appeal is a Letters Patent Appeal arising from a divergence of opinion between Mr. Justice Macpherson and Mr. Justice Ameer Ali.

The essential factual narrative, as set out in the opinion, is:

The Plaintiff instructed Defendant No. 2 to purchase a property for him at a revenue sale held on 23 September 1891.
The Plaintiff furnished the purchase-money and paid it on or before 20 October 1891.
A sale certificate was later granted (the opinion records the grant as occurring on "nth August 1892") to Defendant No. 2.
Formal possession was given to Defendant No. 2 on 15 September 1892.
On 25 November 1892 Defendant No. 2 sold the property to Defendant No. 1, who was registered as proprietor in the Collectorate on 21 March 1893.
The Plaintiff alleges that Defendant No. 2 committed a fraud by purchasing in his own name (benami) using the Plaintiff's money and that Defendant No. 1 bought in collusion or with notice of the Plaintiff's equitable title. The Plaintiff sued on 16 May 1894 seeking a declaration of title and possession.

At first instance and in parts of the appellate proceedings, the Subordinate Judge and Mr. Justice Ameer Ali held that Defendant No. 1 had notice of the Plaintiff's title and was therefore not a bona fide purchaser for value without notice. The Letters Patent Appeal arose because of a difference of opinion among the appellate Judges on the construction and application of section 36 of Act XI of 1859 to these facts.

Legal Issues Presented

Whether Defendant No. 1 was a bonâ fide purchaser for value without notice or whether he purchased with notice of the Plaintiff's equitable title (i.e., was he a mala fide purchaser)?
Whether section 36 of the Revenue Sale Law (Act XI of 1859) operates as a bar to the Plaintiff's suit in the circumstances of this case (in particular, where the certified purchaser purportedly purchased for another person or where there is an alleged benami purchase)?
Whether the protection conferred by section 36 on a certified purchaser extends to an assignee or purchaser from the certified purchaser (i.e., whether an assignee of the certified purchaser can be ousted in a suit brought by the alleged beneficial owner)?

Arguments of the Parties

Appellant's Arguments

The Appellant argued that, even assuming Defendant No. 1 had notice and even assuming the Plaintiff provided the purchase-money, the suit is not maintainable because section 36 of Act XI of 1859 bars suits "to oust the certified purchaser ... on the ground that the purchase was made on behalf of another person." In short, the Appellant contended section 36 deprived the Plaintiff of the right to sue in these circumstances.

Respondents' Arguments

The Respondents (as recorded in the opinion) urged that section 28 might vest the property in the certified purchaser, but that such vesting could not affect the Plaintiff's right to bring his suit unless section 36 specifically bars it.
The Respondents' position, as reflected in the judgments, also emphasized that the suit was based on the fraud of Defendant No. 2 (and on notice to Defendant No. 1) rather than on a pre-sale agreement to purchase in another's name; thus, the suit falls outside the scope of section 36.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Mussumat Buhuns Kowur v. Inlla Beharee Lall	Used as authority indicating that provisions of this character (penal bars to suits) must be construed strictly and literally.	Maclean C.J. noted the case was converse to the present facts but relied on it to support a strict construction of a penal section like sec. 36.
Lokhee Narain Roy Chowdhury v. Kalypuddo Bando-paydhay	Also cited to indicate the principle that a penal provision of this nature is to be strictly construed.	Maclean C.J. referred to it together with the first case to support strict literal interpretation of sec. 36 rather than extending its operation.
Toondun Singh v. Pokenarain Singh	Shows that, under a similar provision in an earlier Act (Act I of 1845), a suit by a beneficial claimant against the certified purchaser (or managing member who purchased in his own name) was not barred; illustrates strict construction of penal provisions.	Ghose J. relied on this case (a Judicial Committee decision) to show how strictly comparable statutory bars were construed and to support the conclusion that the present suit, grounded in fraud and notice, falls outside sec. 36.

Court's Reasoning and Analysis

The Court's reasoning is presented through three separate judgments. The analysis below follows the sequence and legal rationale as stated by each Judge, confined strictly to the contents of the opinion.

Maclean C.J. (Majority reasoning)

Evidence and Notice: Maclean C.J. accepted the Subordinate Judge's credibility assessment—crediting the witness G. P. Pogose against Defendant No. 1—and concluded on the evidence that Defendant No. 1 had notice of the Plaintiff's equitable title when he purchased. Because Defendant No. 1 had notice, he became a mala fide purchaser; whether he paid the full consideration became of "small importance."
Interpretation of Section 36: Maclean C.J. emphasized that section 36 is penal in nature because it deprives a person of a right to bring a suit that would otherwise exist. He analyzed the wording of sec. 36 (which mentions suits "to oust the certified purchaser ... on the ground that the purchase was made on behalf of another person") and concluded that the present suit is not strictly a suit "to oust the certified purchaser" but is, in substance, a suit to oust a person who obtained a conveyance from the certified purchaser under circumstances showing fraud and notice.
Strict Construction: He insisted that a penal provision of this class must be construed strictly and literally and that the Court should not import words or extend the section's scope beyond its plain language, even if that strict construction may produce anomalies.
Conclusion: Because the suit is founded on fraud by Defendant No. 2 (and on notice to Defendant No. 1), Maclean C.J. held sec. 36 did not bar the remedy sought and the Plaintiff was entitled to succeed. He dismissed the appeal with costs (in his judgment).

Ghose J. (Concurred with Maclean C.J.)

Fact Recapitulation: Ghose J. reiterated the critical facts—instruction to Defendant No. 2 to purchase for the Plaintiff, use of the Plaintiff's money, possession obtained by Defendant No. 2 through the Collectorate, and the fraudulent conveyance to Defendant No. 1 who had notice.
Bonâ fide Character and Consideration: He noted the deed to Defendant No. 1 purported to be for Rs. 3,000 (in parts), expressed doubt about parts of that sum but accepted evidence that Rs. 1,600 may have been paid. Nevertheless, he considered the transaction not to be a bonâ fide one because Defendant No. 1 had knowledge of the Plaintiff's title and the transaction was hurried and accompanied by suspicious conduct (e.g., Defendant No. 2 leaving and not being heard of).
Construction of Section 36: Ghose J. quoted sec. 36 wording and explained it contemplates cases where there is a pre-sale agreement that the purchase be made in the certified purchaser's name on behalf of another. He emphasized that the plaint, and the evidence, allege a different situation—an instruction to purchase for the Plaintiff, followed by a fraudulent appropriation of the purchase by Defendant No. 2—not a consensual benami arrangement. Therefore, the suit is based on fraud and is outside sec. 36.
Authority and Strictness: He relied on the two Privy Council cases cited by Maclean C.J. and on Toondun Singh v. Pokenarain Singh to underline that comparable penal provisions must be strictly construed, and that strict construction in the present facts supports the Plaintiff's right to sue.
Conclusion: Ghose J. concluded that equity entitled the Plaintiff to relief and that sec. 36 did not bar the suit; he agreed with the Chief Justice's result.

Trevelyan J. (Dissenting reasoning)

Interpretation of Section 36: Trevelyan J. took a different view on the statutory scope. He agreed that penal construction principles apply, but he looked to legislative intent. He concluded that the Legislature intended sec. 36 to give a certified purchaser in possession a statutory title against the person on whose behalf he had purchased, and that this protection should extend to the purchaser's heir or assignee.
Application to Assignee: He reasoned that if the protection did not extend to assignees or purchasers from the certified purchaser, the statutory protection would be defeated whenever the certified purchaser died or assigned—circumstances in which the evidence to disprove benami would often become weaker. He found no indication the Legislature intended such a result and therefore construed sec. 36 to apply to suits to oust an assignee as well as to suits to oust the certified purchaser.
Conclusion: For these reasons Trevelyan J. would have allowed the appeal (i.e., would have held sec. 36 applicable to the assignee/purchaser from the certified purchaser), and thus dissented from the majority result.

Holding and Implications

Final Disposition: The majority of the Court (Maclean C.J. and Ghose J.) held that section 36 of Act XI of 1859 did not bar the Plaintiff's suit on the facts before the Court and that the Plaintiff was entitled to succeed; the appeal was dismissed (with costs) in the majority judgments.

Implications (direct effect):

The direct effect of the majority decision is that, on the facts of this case (where the certified purchaser is alleged to have acted fraudulently in purchasing in his own name with the Plaintiff's money and where the subsequent purchaser had notice), the Plaintiff may maintain a suit to assert equitable title and to obtain possession despite the existence of section 36.
Trevelyan J. dissented, taking the view that the statutory protection in sec. 36 extends to assignees or purchasers from a certified purchaser; he would have allowed the appeal. The opinion thus records a clear split of judicial views on whether the protection of sec. 36 extends beyond the certified purchaser to his assignee.
The majority emphasized strict and literal construction of penal provisions like sec. 36 and refused to extend the section's scope to defeat an equitable remedy grounded in fraud and notice as established on the facts. The judgment therefore applies those textual and penal-construction principles to determine that the section did not, in these circumstances, bar the Plaintiff's suit.

Note: This summary strictly reflects the reasoning and outcomes contained in the provided opinion. It does not add or infer facts or holdings beyond those expressly stated by the Judges in the text.

Appeal dismissed.

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Raj Chunder Chuckerbutty v. Dina Nath Saha

The Judgments of the Appeal Court were as follows:—

Maclean, C.J:— This case comes before us as a Letters Patent Appeal, by reason of a divergence of opinion between Mr. Justice Macpherson and Mr. Justice Ameer Ali.

I will first deal shortly with the facts of the case.

There can be no doubt that the Plaintiff instructed Defendant No. 2 to purchase the property for him, that the Plaintiff found the purchase-money for the property, which was sold under the revenue sale on the 23rd September 1891, that be paid the purchase money on or before the 20th October in that year, that the sale certificate was granted on the nth August 1892 to Defendant No. 2, and that the latter Defendant in selling to Defendant No. 1 has committed a fraud upon the Plaintiff. Formal possession was given to the Defendant No. 2 on the 15th September 1892, and on the 25th November 1892, he sold the property to Defendant No. 1, who, on the 21st March 1893, was registered in the Collectorate as the proprietor. The Plaintiff's case is that the sale by the Defendant No. 2 to the Defendant No. 1 was a fraudulent and collusive one, that the Defendant No. 1 knew that the purchase-money had been found by the Plaintiff, and that the property in equity belonged to him, and of the 16th May 1894 he brings this suit seeking a declaration of his title and to be put into possession of the property in question.

The judgment of the Subordinate Judge, as that of Mr. Justice Ameer Ali, is based upon the view that Defendant No. 1 knew, when he purchased, that Defendant No. 2 was not the real owner of the property, but that the Plaintiff was, in other words, that Defendant No. 1 took the property from Defendant No. 2, with notice of the Plaintiff's title. And it must be observed that Mr. Justice Macpherson is not prepared to say that Defendant No. 1 cad successfully contend that he is a bonâ fide purchaser for value without notice.

I am not disposed to differ from the conclusions of these three Judges upon the question of whether Defendant No. 4, when he purchased, had notice of the Plaintiff's title, which as between him and Defendant No. 2 was clear.

Though there is other evidence in the case which would justify an inference that Defendant No. 4 had notice, the only direct evidence on the point is that of G.P Pogose. Defendant No. 1 denies his statement. The question is, which witness is to be believed. The Subordinate Judge saw them both: he has believed Pogose, and disbelieved Defendant No. 1.

It is difficult for us to say he is wrong. I think then on the evidence, it must be taken that, when he purchased, Defendant No. 1 had notice of the Plaintiff's title.

If this be so the question whether he paid anything for the property becomes of small importance, for if he knew, at the time of his purchase, that, in equity, the property belonged to the Plaintiff, in other words, if he had notice of the latter's title, he became malâ fide purchaser.

On the evidence I should be inclined to hold that the Rs. 1,600 was paid; but in the view I take as to notice, the question, as I have said before, becomes of little importance.

It is, however, contended for the Appellant that, even if both the above questions be decided in the Plaintiffs favour, the Suit is not maintainable having regard to sec. 36 of Act XI of 1859.

In dealing with this question, one must bear distinctly in mind that this is a penal section, penal in that it deprives a person of a right to bring a suit, which, but for the section, he would undoubtedly be entitled to do. There can be no doubt but that, save for the section, this suit would lie, and that, upon the facts found, the Plaintiff would be entitled to succeed Does the section deprive him of that right? I think not. The section says:— “Any suit brought to oust the certified purchaser, as aforesaid, on the ground that the purchase was made on behalf of another person.” This is not a suit “to oust the certified purchaser.” it is a suit to oust somebody else. It is true (that) somebody else claims, or affects to claim, through the certified purchaser, but he is not the certified purchaser, and therefore strictly not within the language of the section.

I am not satisfied that the suit is brought “on the ground that the purchase was made on behalf of another person:” the true ground upon which the suit is based is the fraud of Defendant No. 2 of which Defendant No. 1 had notice. It would have been difficult to say that he suit was barred by the section, if it had asked for a declaration of title, for an account of mesne profits, and for a conveyance of the estate. The section points to a particular suit against a particular person on a particular ground, and I do not think it prevents the Court, in a case like the present, from enquiring into the merits. In a case where every principle of equity and good conscience demands that the Plaintiff should be entitled to bring a suit and, as here, on the facts, to succeed, I do not think the Court, construing the section ought to go beyond the strict letter of the language used or to put a construction upon that language which would have the effect of materially extending the operation of the section.

In a section of this class it is in my judgment safer to adhere to the words actually used than to import into the section words which are not there. The section ought to be construed strictly and literally. Doubtless this construction may lead to anomalies: e.g that the certified purchaser cannot be sued though his heir may: but the existence or possibility of such anomalies ought not, I conceive, to warrant us in reading the words otherwise than literally.

It is urged for the Respondents that under sec. 28 of the Act, the property becomes vested in the certified purchaser. I do not say whether this is or is not so: but, assuming it to be so, that fact can not affect the right of the Plaintiff to bring his suit, unless sec. 36 bars him of that right.

To read the section in the manner for which the Respondents contend would have the effect of making the section an instrument for cloaking and protecting had, a result we should be very chary in attributing to the Legislature There is doubtless much force in Mr. Justice Macpherson's observations that it is only in the case of fraud by the agent or benamidar, that the question is likely to arise: but 1 do not think this construction is sufficient to justify the Court in placing a construction on the section which would have the effect of materially extending its scope.

There is no authority directly in point. The cases of Mussumat Buhuns Kowur v. Inlla Beharee Lall Lokhee Narain Roy Chowdhury v. Kalypuddo Bando-paydhay were cases converse to the present. They, however, indicate clearly that a scction of this nature must be construed strictly and throw a light upon the principle applicable to the present case.

Upon these grounds I am of opinion that sec. 36 is no bar to the suit, and that the Plaintiff is entitled to succeed. The appeal is dismissed with costs.

Ghose, J.:— I agree with the learned Chief Justice in the conclusion that he has arrived at.

There can, I think, be no doubt as to the true facts of this case. The Plaintiff instructed the Defendant No. 2, Golak Chunder Bhattacharjee, to purchase the property in suit at a revenue sale on his behalf; the Defendant, instead of making the purchase in the name of the Plaintiff, did it in his own name, but with the money of the Plaintiff; he afterwards promised to execute a deed of: release in favour of the Plaintiff soon as the certificate of sale was obtained; he did obtain the certificate of sale, as also formal possession through the Colleclorate, but did not execute a deed of release, and fraudulently executed a deed of sale in favour of the Defendant No. 4, who had notice of the title of the plaintiff; the Defendant No. 1 succeeded in obtaining real possession of the property; and the Plaintiff now seeks to recover possession.

The deed of sale in favour of the Defendant No. 1 is stated to have been for a consideration of Rs. 3,000. This amount is said to have been composed of three sums, Rs. 1,000, Rs. 400 and Rs. 1,600; this last mentioned sum only being alleged to have been paid on the date of the sale, and the other two sums on antecedent dates. I am not prepared to believe that (the) these two sums of money were received by the Defendant No. 2, at any rate, as part of the consideration for the conveyance in question; but there is evidence which may be accepted that the amount of Rs. 1,600 was paid by the Defendant No. 1 to the Defendant No. 21 he document executed by the Defendant No. 2 would, therefore, operate as a conveyance of the property; but the facts disclosed in the case clearly indicate to my mind that this transaction was not, strictly speaking, a bonâ fide transaction. The Defendant No. 1 had knowledge of the Plaintiff's title: that was got up in a great hurry, the Defendant No. 1 apparently making no enquiry as to the true value of the property, and the Defendant No. 2 immediately afterwards left Mymensingh, and has not been, so far as the record before us is concerned, since heard of.

In these circumstances there can be no doubt that in equity the Plaintiff is entitled to the relief he has asked for.

But it is said that sec. 36 of the Revenue Sale Law (Act XI of 1859) is a bar to this suit. That section provides:

“Any suit, brought to oust the certified purchaser as aforesaid on the ground that the purchase was made on behalf of another person not the certified purchaser, or on behalf partly of himself and partly of another person though by agreement the name of the certified purchaser was used, shall be dismissed with costs. The section evidently con emplates of cases, where, before the sale, there is an agreement or understanding between a person and the certified purchaser, that the purchase should be made in the name of the latter, but on behalf of that person.

Now the facts alleged in the plaint in this case are (and, for the purpose of the ques ion before us we must confine ourselves chiefly to the plaint), that the Plaintiff instructed the Defendant No. 2, who had been employed by him on previous occasions as agent, to purchase the property in question for and on his behalf; that the Defendant No. 2 promised to carry out this instruction, but he purchased the property in his own name “benami for the Plaintiff;” that this purchase in the Defendant's own; name was fraudulent; that he afterwards wrote to the Plaintiff a letter acknowledging the receipt of the purchase-money, which the Plaintiff had sent to him and promised to execute and deliver a deed of release, so soon as a certificate of sale was obtained; that subsequently the Defendant at the expense and for and on behalf of the Plaintiff took possession of the property through the Collectorate; that the Plaintiff; thereupon obtained possession, and owned and held the property; but that subsequently the Defendant No. 1, who was fully aware of the purchase at the revenue sale being with the Plaintiffs money, in collusion and concert with the Defendant No. 2, concocted a fraudulent conveyance from the Defendant No. 2 in his favour, and dispossessed the Plaintiff. According to the plaint, and the evidence on oath of the Plaintiff, there was no agreement or understanding between the Plaintiff and the Defendant No. 2 that the purchase should be in the name of the latter, but “on behalf of” the Plaintiff. On the contrary, the instruction to the Defendant No. 2 was, as alleged, that the purchase should be made for the Plaintiff, that is to say, in his name. No doubt, it does appear that when the Plaintiff was informed of what had taken place, he acquiesced in it but evidently he had no option left in this matter. It is, however, distinctly alleged that the act of the Defendant No. 2 in making the purchase in his own name against the instruction he had received, was a fraud upon the Plaintiff, and so also the transaction in favour of the Defendant No. 1. The suit, I think, may well be regarded as based upon the ground of fraud; and in this view of the matter the case falls outside the provisions of sec. 36 of the Revenue Sale Law.

In the second place, it will be observed that the suit is not to oust “the certified purchaser,” but a person who obtained a conveyance from the certified purchaser under circumstances which indicate that it was not a bonâ fide transactions. It has been held by the Privy Council in the two cases referred to by the learned Chief Justice, with reference to a similar provision in the old Civil Procedure Code that such a provision, which is penal in character, must be construed strictly and literally.

And in this connection I may also refer to the case of Toondun Singh v. Pokenarain Singh , where a purchase was made at a revenue sale under Act I of 1845 by the managing member of a joint Hindu family in his own name but “on behalf” of the joint family; and in a suit by a member of the family for enforcement of his rights under the purchase against the managing member, it was held by the Judicial Committee that the suit was not affected by sec. 21 of the Act I of 1845 (provisions where, of were similar to those of sec. 36 of the present law); and “that notwithstanding anything contained therein, the members of such joint family may sue to enforce rights acquired by them under such a purchase as against the managing member, though he is the sole certified purchaser.” This case is material as shewing how strictly the penal provisions as contained in sec. 36 should be construed.

Bearing in mind the views expressed by the Privy Council in these cases, I do not see why, when the equities are entirely in favour of the Plaintiff, we should construe sec. 36, otherwise than strictly and literally, so as to enlarge its scope, and thus to help the Defendant in committing a fraud upon the Plaintiff.

As regards the anomalies which have been pointed out before us, as likely to arise from this view of the matter, I do not think I am called upon to express any opinion in this case. I confine myself to the facts of the particular case now before us.

Upon these considerations I am of opinion that the Plaintiff is entitled to judgment.

Trevelyan, J.:— In my opinion the construction which has been placed by Mr. Justice Macpherson on sec. 36 of Act XI of 1859 is the correct one, and that section applies just as much to a suit to oust the assignee of a certified purchaser as it does to a suit to oust that purchaser. I quite agree that, having regard to the nature of that section, the principles which apply to the construction of penal statutes are applicable, but it is necessary that we should see what was the intention of the Legislature, and give effect, to such intention. We must not construe the section in such a way as to defeat the intention of the Legislature, or “frustrate the object of the Act by putting a forced and strained meaning upon its language.”

There can be no ques ion, but that this case is within the mischief which this section was designed to meet.

As I take it, the Legislature in enacting sec. 36 intended to give to a certified purchaser in possession a statutory title against the person, if any, on whose behalf he had purchased. If this be so, I cannot see why this protection should not devolve upon his heir or assignee, who would take a title in continuation of that of the certified purchaser. To hold otherwise would be to attribute to the Legislature an intention of enacting that when the evidence becomes weaker to disprove benami, on the person best capable of disproving it dying or ceasing to have any interest in the property, the person claiming to be the beneficial owner is to have increased facilities for proving that the purchase was made benami. I cannot hold that such was the intention of the Legislature and that death or assignment destroys the statutory title. I would Assume that the Legislature accepted the ordinary rule that an assignee stands in the place of his assignor and acquires by the assignment the complete title of the assignor. Mr. Justice Macpherson has given his reasons at some length and I need not repeat them. I would allow the appeal.

Appeal dismissed.

Raj Chunder Chuckerbutty v. Dina Nath Saha

Structured Summary of the Opinion — Letters Patent Appeal (Revenue Sale)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments

Respondents' Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Maclean C.J. (Majority reasoning)

Ghose J. (Concurred with Maclean C.J.)

Trevelyan J. (Dissenting reasoning)

Holding and Implications

Raj Chunder Chuckerbutty v. Dina Nath Saha

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