TaxTMI 
TaxTMI 
TaxTMI 
1979 (1) TMI 232
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....th share each and for a decree of ₹ 45,000 with further accruals by way of receipt of further rent till full realisation of the claim. In the alternative a decree for accounts of the dissolved partnership on declaration of dissolution of the same and partition of the suit property and premises in equal 1/4th share to each of the plaintiffs and the defendant by metes and bounds. The defendant in his written statement denied the claim of the plaintiff and contended that the suit property was never purchased in co-ownership or that the plaintiffs were entitled to 3/4th share. He contended that plaintiffs 2 and 3 advanced ₹ 10,000 each as loan and that they had no claim to the property he having purchased the property in court auction as the absolute owner. The trial court decreed the suit. The defendant preferred an appeal to the High Court which accepted the appeal and dismissed the suit. The facts of the case may be shortly stated. The suit property in Darjeeling belonged to one Harbhajan Singh Wesal. He executed a mortgage in favour of the Calcutta National Bank Ltd. The bank instituted a suit against Harbhajan Singh Wesal for recovery of ₹ 1,82,403-11-3 and fo....
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....further states that accordingly the defendant was sent to Calcutta and the bid at the auction which was finally knocked down on 19.1.60 for a sum of ₹ 40,000 in the name of the defendant. The agreement also provided that the plaintiffs and the defendants would be entitled to equal shares in the property. Another term of the agreement provided that the conveyance shall be drawn in the joint names of the parties by obtaining leave from the High Court. On 7.4.60 the defendant executed two receipts Exs. 22 and 22A in favour of the second and the third plaintiffs respectively. It is recited in the receipt that the defendant received a sum of ₹ 10,000 as the share of the purchase price of the property sold in public auction by the Official Liquidator in pursuance of the agreement amongst themselves. Though the receipt was typed in Darjeeling on 7.4.60 the defendant signed the receipt at Calcutta on 11-4-60. In the meantime on 8.4.60 the defendant filed an application in the High Court of Calcutta praying that the time for completion of the sale be extended by three months from 19-4-60 and the conveyance be executed in favour of the three plaintiffs and himself. On 11-4-60 a....
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....veyance was executed on 17-6-60 and registered at Darjeeling. According to the mutual agreement the parties were entitled as co-sharers to enjoy and occupy the suit property in co-ownership and were also entitled to income from them. It was further agreed that the defendant would manage the joint property for the co-owners of the property and the defendant would realise the rents for and on behalf of the parties with liability to pay the respective shares to each of the plaintiffs. The defendant, on the other hand, submitted that he was trying to purchase the suit property from the previous owner Harbhajan Singh by private negotiations before the proceeding was started for auction sale. The defendants efforts to purchase the property from the owner proved abortive and he decided to purchase the suit property in the auction sale when the property was advertised for sale. As the defendant was not acquainted with the procedure of court's sale he approached the first plaintiff for legal service and the first plaintiff gave directions as to how the defendant should proceed. The defendant denied that he was sent by the plaintiffs to Calcutta for calling the bid. According to him he ....
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....e sought to prove that the parties after learning from the notification in the newspaper of the sale of the property agreed between themselves to call the bid jointly in co-ownership in the name of the defendant and in pursuance of that agreement the defendant paid the deposit. Further it is the plaintiffs' case that in pursuance of the agreement the defendant was sent to Calcutta where he bid at the auction which was finally knocked down for the benefit of all. The plaintiffs' claim that they contributed 1/4th of the price of the property and the expenses i.e. ₹ 13,500 each. Further, it was contended by the plaintiffs that the bid by the defendant was for the benefit of the three plaintiffs and the defendant and that it was agreed that the conveyance should also be in favour of all of them. It is seen from the evidence that the defendant was interested in buying the property alone before the advertisement appeared in the newspapers on 20-11-59 and 23- 11-59. The defendant received Ex. V a letter dated 10-6-59 from D. N. Mukherjee advocate, advising him to give an offer to the Receiver so that he can place the matter to the court for an order for sale by private nego....
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....o purchase jointly for the benefit of all of them. It is also difficult to accept the plea that palintiffs 2 and 3 went to the first plaintiff who is an advocate and there agreed to purchase the property in equal shares between the defendant, first plaintiff and themselves. The second plaintiff had an office in Calcutta and the Calcutta office had a Munim and three other partners in whom they had complete confidence. In the circumstances it is strange that they wanted the first plaintiff to be a co-sharer so that he could attend to all the legal questions. There is no explanation as to why plaintiffs 2 and 3 who were independant businessmen would join to purchase the property. The explanation that the agreement was arrived at to keep the bid low is purile. The evidence discloses that the plaintiffs were taking active part in the transaction after 2.4.1960 while between November, 1959 when the advertisement appeared and the date of agreement, there was comparative quiet, which fact probablises that the plaintiffs were not taking any part in the activities of the defendant regarding the bid in the court auction of the property. The dealings of plaintiffs 2 and 3 show that they were d....
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....#8377; 13,500 each was paid. According to the defendant second plaintiff's son Narendra gave him ₹ 20,000 and he had ₹ 10,000 and he and Narendra counted ₹ 30,000 and handed over the sum of ₹ 30,000 to Kshetry, in the presence of the Judge. On the evidence the High Court came to the conclusion that the money was counted by Narendra and the defendant before it was paid to Kshetry and if Narendra handed to the Solicitor a sum of ₹ 27,000 after counting, the inference that ₹ 27,000 belonged to plaintiffs is not justified. We agree with the view taken by the High Court. We therefore find that plaintiffs 2 and 3 have not proved that they paid ₹ 3,500 each towards the expenses. The evidence relating to payment by the first plaintiff is even worse. According to the first plaintiff, who examined himself as P.W. 2, on 2nd April, 1960 when the agreement was signed he paid ₹ 10,000 as his share of purchase price and ₹ 2,500 towards cost, ₹ 12,500 in all in cash to the defendant. He did not consider it necessary to take a receipt in view of the signed agreement which he thought was sufficient acknowledgment of the liability by the....
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....xplanation for absence of provision for payment of interest. On a close analysis of the evidence led on behalf of the plaintiffs and the defendant we agree with the High Court that neither the version of the plaintiffs nor that of the defendant discloses the entire truth. The conclusion we arrive at on the evidence is that the plaintiffs have failed to prove any prior agreement before the defendant made his bids for ₹ 30,000 and later for ₹ 40,000 and paid the deposits amounting to ₹ 10,000 by himself. Plaintiffs 2 and 3 have failed to prove that they have paid ₹ 3,500 each towards expenses in addition to payment of ₹ 10,000 by each of them which is admitted. The first plaintiff has totally failed in proving that he had paid any part of the consideration. On the side of the defendant there is no explanation as to why he subscribed to the agreement agreeing to share the property along with the three plaintiffs and for his applying to the court for confirmation of the sale in favour of all of them. Neither is there any explanation by him as to why plaintiffs 2 and 3 advanced ₹ 20,000 without interest. Taking all the circumstances into account we f....
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....their share of the rents collected by the defendant. We estimate the share of the rents collected for each of the plaintiffs at ₹ 25,000. The result is the appeal is allowed to the extent that there will be a decree for partition and separate possession of 1/4th share each of plaintiffs 2 and 3. Plaintiffs 2 and 3 will pay to the defendant ₹ 3,500 each and interest at 10 per cent per annum from the date of the conveyance and receive ₹ 25,000 each from the defendant towards their share of the rent collected upto date. The first plaintiff will not be entitled to any relief and the suit so far as he is concerned is dismissed. There will be no order as to costs. Before we conclude we will shortly refer to the question of law raised by Mr. L. N. Sinha on behalf of the defendant. He submitted that as the title in the property vested in the defendant by confirmation of the court sale and later by a registered conveyance, the plaintiffs cannot seek relief on the unregistered agreement Ex. 4 as conveying any title to them. This point was not taken in any of the courts below but learned counsel submitted that because it is a pure question of law not involving any investiga....
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.... not avoidable by the performance of any formality, for the doing of the very act which the plaintiff seeks to do, it is not open to the defendant to set up an estoppel to prevent it". The decisions are clear that the plaintiffs cannot succeed in displacing the title of the defendant on the basis of the unregistered agreement. But this will not help the defendant as the suit is based on the plea that the suit property and the premises were purchased in co-ownership i.e. on a claim that the plaintiffs were the real owners of the property. The claims of the plaintiffs as a real owner is not based on the unregistered agreement alone. On the pleadings in the case the question of law raised cannot result in the suit being dismissed as not maintainable. The second question the learned counsel raised was that the suit is barred under section 66 of the Civil Procedure Code. The trial court overruled the plea on the ground that although the sale in question is a court sale it is not according to the rules prescribed by the Civil Procedure Code but only according to the Rules of the Calcutta High Court on the original Side. The learned counsel submitted that the purpose of section 66,....