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Petitioner: AHMED MEAH SAWDAGAR VS Respondent: SHERALI AND ANOTHER
P L D 1960 Dacca 334
P L D 1960 Dacca 334
Before Chowdhury, J
AHMED MEAH SAWDAGAR‑Appellant
versus
SHERALI and another‑Respondents
Second Appeal No. 187 of 1958, decided on 9th June 1959.
(a) Revenue sale‑Defaulting proprietor fraudulently making purchase in benami of his relation and depriving subordinate tenure‑holder of his interest in land‑Sale though not liable to be set aside, Court can declare that it will have no higher effect than payment of arrears of revenue or a private alienation.
S who held a revenue‑paying jote under the Government gave settlement of the jote lands in under‑raiyati right to A. While A was in possession of the same and was paying rent, S made a wilful default in payment of revenue and brought about the sale of the jote under the Revenue sale law and fraudulently purchased the jote in the benami of his relation in order to defraud and deprive A of his under‑raiyati right in the land of the jote. A brought a suit for setting aside the sale on account of fraud.
Held, that though the sale under the Revenue sale law is not liable to be set aside, the Court can safely declare, on account of fraud and fraudulent, purchase by S in the benami of his relation, that it will not have any higher effect than payment of arrears of revenue or than a private alienation.
Doorga Singh v. Sheo Prashad Singh I L R 16 Cal. 194 ; Deonondan Prashad v. Janki, Singh and others L R 44 I A 30 ; Kumar Satishkanta Roy and others v. Satish Chandra Chatterjee and others 30 C L J 475 (487) ; Nawab Sidhee Nuzur Ally Khan v. Rajah Qjhoodhyaram Khan 10 M I A 540 (557) and Satish Chandra Chatterjee v. Kumar Satish Nath Roy and
others 28 C W N 327 ref.
(b) Civil Procedure Code (V of 1908), S. 100‑Finding of fact by first Appellate Court without consideration of material facts‑Not binding in Second Appeal.
A finding of fact by the first Appellate Court without con sideration of the material facts and circumstances on which the trial Court bases its decision is not binding in Second Appeal.
A. H. Md. Ismail v. Sachchidananda Bhattacharjee 40 C W N 769 rel.
(c) Plaint‑Amendment of‑Relief prayed for, granted without.
Radhikaranjan Guha and S. A. Chowdhury for Appellant. S. R. Pal and Shamsul Huq Chowdhury for Respondents.
JUDGMENT
This appeal is by the plaintiff. It arises out of a suit for cancellation of the revenue sale of Jote No. 50 of Mouza Badalpur held on 25‑6‑53 on the ground that the sale was illegal, without jurisdiction, collusive and fraudulently brought about by defendant No. 1 by his wilful default in payment, of revenue due to the Khas Mahal and was purchased by him in the benami of his relative defendant No. 2, to defraud the plaintiff of his under raiyati right in the jote and to deprive him of the compensation money of Rs. 11,464‑1‑0 awarded to him on account of the acqui sition of a portion of the land of the under‑raiyati by the Govern ment for the project of Mercantile Marine Academy at Badalpur, Chittagong.
2. Plaintiff's case, shortly stated, is as follows : Jote No. 50 comprises 13685 acres of land in two plots, Nos. 464 and 539 of Khatian No. 164 of Mouza Badalpur in P.S. Anwara, Chittagong, was held by defendant No. 1 under the Patiya Khas Mahal Defendant No. 1 acquired the jote by, auction‑purchase in a revenue sale on the 17th March 1948, on a jama of Rs. 34‑3‑0, besides cess and Education cess, per annum. Thereafter defendant No. 1 settled the entire land of the jote along with 76'54 acres of land of Jote No. 51 of that mouza and 73 decimals of land of Jote No. 22 of Mouza Baruathan, in all 213'44 acres of land, with the plaintiff on receipt of a salami of Rs. 2,500 at an annual jama of Rs. 150 by a registered lease, dated 6‑2‑50, and the plaintiff paid rent to def6ndant No. 1 and‑ got rent receipts, Exhs. 3 and 3 (b), for the years 1358‑59 and part of 1360 B.S., corresponding to 1951, 1952 and 1953. Thereafter the defendants realised rent for the remaining portion of the year 1360 B. S. by a suit.
3. In the meantime, 18‑01 acres of land out of Plot No. 539 of disputed Jote No. 50 was acquired by the Government for Mercantile Marine Academy at Badalpur, being L. A. No. 80 of 1952‑53 and Rs. 11,466‑1‑0 as compensation was awarded to the plaintiff by the Collector on the 19th September 1953, on account of his under‑raiyati right in that land and Rs. 221‑5‑0 to defendant No. 1 as holder of superior interest (vide Exh. 2). But the payment of the compensation money awarded to the plaintiff was withheld by the Collector by his order, dated the 7th October 1953, on the objection of defendant No. 2 who put forward a claim on the 30th September 1953 to the effect that he had purchased the jote in the revenue sale on 25th June 1953, for arrears of March Kist of 1953, and annulled all the incumbrances by a notice in July 1953, and took delivery of possession through the Collector on the 8th October 1953, and got his name mutated in the jote under order, dated the 30th January 1954, after dismissal of the plaintiff's appeal No. 123 of 1953 by the Commissioner on the 26th October 1953.
4. Further case of the plaintiff is that there was no arrear according to law ; that notice of the sale was fraudulently suppressed by defendant No. 1 of Mouza Baruathan in collusion with his agent and sister's husband, defendant No. 2 of Mouza Chandgaon "several miles off from the disputed mahal" and made a wilful default in payment of revenue and brought about the sale under the Revenue Sale Law and fraudulently purchased the jote in the benami of his relation defendant No. 2, in order to defraud and deprive the plaintiff of his under‑raiyati right in the land of the jote under the stringent provisions of the Revenue Sale Law and of the compensation money awarded to him on account of acquisition of a portion of the land of his under‑raiyati by the Government and that the plaintiff constructed a building on the land of his under‑raiyati at a cost of Rs. 20,000 and made a dairy farm and poultry farm at great cost and accordingly the plaintiff suffered a serious loss on account of the revenue sale of the jote of which the plaintiff came to know only on the 6th October 1953, and then filed the suit for setting . aside the sale on the declaration that it was benami, collusive, fraudulent, illegal, void and without jurisdiction and that the purchase was fraudulent purchase by defendant No. 1 in the benami of his relation, defendant No. 2.
5. The suit was contested by defendant No. 2 alone and defendant No. 1 did not appear. The contesting defendant No. 2 denied that he was an agent and benamdar of defendant No. 1 and asserted that there was no fraud and fraudulent suppression of the sale processes ; that there was no collusion or fraud ; that he purchased the jote for his own benefit with his own money and got his name mutated in the Khas Mahal and also annulled the plaintiff's incumbrances by notice and otherwise.
6. It is also contended that the suit was not maintainable in its present form, that the plaintiff has no locus standi to file the suit ; that the plaintiff has not acquired any interest by the alleged deed of lease which contains fictitious property of Patiya Sub‑Registry, and, as such, there was a fraud on the Law of Registration.
7. The trial Court, though it held that the sale was within the jurisdiction of the Collector, as there were arrears of revenue, and that the plaintiff is estopped from raising any objection as to the service of sale processes under section 8 of Act VII of 1868, it set aside the sale holding that there was no fraud on the Law of Registration and the plaintiff, who has acquired the under raiyati in the land of the jote, and has not locus standi to file the suit and the sale was fraudulently and collusively brought about by defendant No. 1 by his wilful default of payment of revenue and he fraudulently purchased the jote in the benami of his agent and sister's husband, defendant No. 2, to defraud and deprive the plaintiff of his under‑raiyati right in the land of the joie as well as of the compensation money awarded to him on account of the acquisition of a portion of the land of the joie by the Government for the Mercantile Marine Academy.
8. On appeal by defendant No. 2, the learned Subordinate Judge set aside that the judgment and decree of the trial Court and dismissed the suit of the plaintiff holding that the evidence on record is not sufficient to brand the purchase as benami one simply because defendant No. 2 happens to be a relation of defendant No. 1.
9. The trial Court in arriving at the finding that the sale was fraudulently brought about by the wilful default of defendant No. '1 who fraudulently purchased it in the benami of his relation, defendant No. 2, relied, amongst others, on the following evidence and circumstances, namely,
(1) Exhibit 2 which shows that Rs. 11,464‑1‑0 was awarded to the plaintiff and Rs. 221‑5‑0 to defendant No. 1 as compensa tion for acquisition of a portion of the land of the jote and the entire land of the jote was settled with the plaintiff by defendant No. 1 on an annual jama of Rs. 150 (vide Exh. 6).
(2) The evidence of P. W. 1 Saleh Ahmed, a pleader of 28 years' standing, "a highly respectable man" and a common relation of both the defendants, who deposed that the defendant purchased the jote in the benami of defendant No. 2 and defendant No. I paid the earnest of the purchase‑money in his presence and he was present at the sale on 25‑6‑53 and purchased the jote bearing No. 248, sold on that date, and that defendant No. 1 also was present in the sale and purchased on that date another mahal bearing Touzi No. 33250.
(3) (a) Exhibit 9 (a), certified copy of the Sale‑Register, which shows that this witness, P. W. 1, purchased Jote No. 248 in the sale held on 25‑6‑53.
(b) Exhibit 9 (b), certified copy of the Sale Register, which shows that defendant No. 1 purchased the mahal bearing Touza No. 33250 in that sale on 25‑6‑53. So he knew about the sale of the disputed jote and he could save it from the sale, "he having been present on the date of the sale and, having purchased another mahal, he had the knowledge of the sale and capacity to purchase the same."
(3) That admittedly defendant No. 2 is the sister's husband of defendant No. 1. Defendant No. 2 admitted that he wrote a pronote for Rs. 2,000 for defendant No. 1 and deposed for defendant No. 1, that he never personally paid rent and cess of the jote nor can he say what is the exact amount of the cess of the jote.
(5) Exhibit 4 Sheet of process‑fees in Misc. Judicial Case said to have been started by defendant No. 2 to annul the incumbrances after the purchase of the jote which shows that process fees were paid by him and it was written by defendant No. 1 (vide P. W. 5).
(6) The signatures in the power and written statement filed by defendant No. 2 are quite different, even in the eye of a lay man, from that of defendant No. 2 in his deposition which shows that there must be some one behind who was, in fact, conducting the case:
10. The trial Court held:----
"Considering the facts and circumstances and the evidence discussed above, I have come to the irresistible conclusion that defendant No. 2 is merely a benamdar for defendant No. 1 and defendant No. 1 wilfully made default and auction purchased the jote fraudulently and, as such, I find that defendant No. 2 did not acquire any interest whatsoever in the jote in suit by the alleged revenue sale, dated 23‑6‑53, and the same should be set aside."
On appeal, though the learned Subordinate Judge held that the suit for bare declaration that the sale was a fraudulent sale and the purchase by defendant No. 2 is really a purchase by defendant No. 1 in the benami of defendant No. 2 is maintainable, as it would save the under‑raiyati of the plaintiff from annulment and the plaintiff's right, title and interest in the whole of the land of the jote would stand, yet he dismissed the suit holding that the evidence on record was‑not sufficient to hold that the purchase by defendant No. 2 was a benami purchase by defendant No. 1.
11. In coming to the above finding, the learned Subordinate Judge did not consider the materials on which the trial Court relied, particularly Exhs. 9 (a) and 9 (b), certified copies of the Sale Register showing that P. W. 1 Saleh Ahmed and defendant No. 1 were present at the sale on 25 6‑53 which conclusively corroborated the evidence of P. W. 1 that he saw defendant No. l purchase the jote in the benami of defendant No. 2 and that defendant No. 1 paid the earnest purchase money, nor has be learned Subordinate Judge considered the evidence of P. W. 1, though he referred to the Sale Register by name and the evidence of P. W. 1 while referring to tee basis of the finding of the trial Court. What he has said instead is that it was doubtful whether by the subsequent Revenue sale the tenant's compensation would be affected when such a compensation was to be assessed on the basis of actual possession existing at the time of acquisition in 1952‑53 overlooking the facts that defendant No. 2 has already put forward his claim to the compensation money and objected to the payment of the same to the plaintiff duty to the auction sale of the jote and that the title of a purchaser in Revenue Sale takes effect net from the date of the sale but from the latest date of payment); that the memory of the pleader (P. W. 1) was seriously tested in cross‑examination which the pleader did not appear to have stood well and that stray writing by defendant No. 2 should not have been taken by the trial Court as proof of the agency of defendant No. 2 for defendant No. 1. This' much and no further. Then he referred to the taking of the sale certificate, annulment of the incum brances, taking of delivery of possession by defendant No. 2 and his solvency. These are besides the point. As the purchase stands in the name of defendant No. 2, all these things are bounds to be in his name and his solvency was not disputed by anybody. Then he abruptly came to the finding that the evidence on record is not sufficient to brand the purchase as benami one simply because defendant No. 2 happens to be a relation of defendant No. 1.
12. So, Mr. Guha, the learned Advocate for the appellant contends that the trial Court on evidence has come to the irresistible conclusion that defendant No. 2 is the benamdar of defendant No. 1 who fraudulently brought about the sale by his wilful default and fraudulently purchased the property in the benami of defendant No. 2, but the lower Appellate Court in reversing those findings has not adverted to the reasons given by the trial Court nor has he considered the material facts and circumstances relied on by the trial Court in arriving at those findings and, as such, the judgment anti decree of the lower Appellate Court cannot be maintained.
13. I think this contention of Mr. Guha for the appellant is of substance.
14. On the other hand, Mr. Pal, the learned Advocate for the respondents, who could not support the judgment of the lower Appellate Court in view of the evidence on record and the circumstances disclosed, contends that the suit, as framed, namely, for setting aside the sale is not maintainable as the Revenue Sale Law does not prohibit purchase by the defaulting proprietor either in his own name or in the benami of some one and, as such, the sale is not liable ‑to be set aside, as it does not come under section 33 of the Revenue Sale Law and so it is immaterial to consider whether the sale was fraudulently brought about by defendant No. 1 and whether he purchased it in the benami of defendant No. 2.
15. That is exactly what has been held an the case of Doorga Singh v. Sheo Prashad Singh (I L R 16 Cal. 194), where a defaulting co -sharer fraudulently purchased the mahal in a Revenue sale in the benami of some other person. But their Lordships of the Privy Council in the case of Deonandan Prashad v. Janki Singh and others (LR441A30) pointed out that the decision in Doorga Singh's Case had not stood unquestioned and held at page 34 of the report :‑---
"The decision in Doorga Singh s case applied too lax a standard of reciprocal conduct in holding that fraud in its strictest sense, such as would support a common law action for deceit, was the test by which to judge these transactions.
It failed to pay due regard to the relative position of co‑owners in respect of the payment of revenue and to the need of demanding from each such a measure of candid dealing and good faith as would ensure that a sharer would not be tempted to make a deliberate default with a view to ousting his co -sharers and appropriating to himself their common property. Hence Deonandan, through his representatives, had a duty to perform which was inconsistent with his becoming a purchaser of the property in the way he did ; therefore, his title cannot operate to the exclusion of the co‑owners.
It is no answer to say that the Act contemplates a purchase by a sharer ; the sale stands but, in the circumstances, the transaction is in effect nothing more than payment of an arrear of revenue ensuring for the benefit of all".
16. In the case of Kumar Satishkhantha Roy and others v. Satish Chandra Chatterjee and others (30 C L J 475 (487)), referred to by Mr. Guha, the learned Advocate for the appellants, the High Court of Calcutta, relying on the observation of the Privy Council in Doorga Singh's case as well as in the case of Nawab Sidhee Nuzur Ally Khan v. Rajah Ojoadhyaram Khan (10 M I A 540 (557)), held :‑
"The Court will strip of all disguises from a case of fraud and look at the transaction as it really is; because `fraud is, an extrinsic collateral act which vitiates the most solemn pro ceedings of Courts of justice', and, in the words of Lord Coke, `avoids all judicial acts, ecclesiastical or temporal.' In cases of this character, the Court holds that the sale has no higher effect than a private alienation . . . . . This is plainly a rule of honesty and fair dealing ; no party to a fraudulent transaction can be allowed to derive any benefit from it, and the Court is always reluctant to condone the fraud and permit the participants therein to retain the advantage."
This decision of the Calcutta High Court was affirmed by the Privy Council in the case of Satish Chandra Chatterji v. Kumar Satish Nath Roy and others (28 C W N 327), where the Privy Council held at page 332 :‑---
"Charges of fraud and collusion must be proved by those who make them‑proved by established facts or inferences legitimately drawn from those facts taken together as a whole. Suspicions and surmises and conjecture are not permissible substitutes for those facts or those inferences, but that by no means requires that every puzzling artifice or contrivance resorted to by one accused of fraud must necessarily be completely unravelled and cleared up and made plain before a verdict can be properly found against him. If this , were not so, many a clever and dexterous knave would escape."
17. In this view of the matter, their Lordships of the Calcutta High Court as well as those of the Privy Council gave the plaintiff co‑sharer relief in the shape of a declaration that the sale was fraudulent and, as such, it will have no higher effect than payment of arrears of revenue or a private alienation in a suit for setting aside the sale on account of fraud.
18. The principle enunciated in these cases in respect of fraudulent purchase by a defaulting co‑sharer to deprive the other co‑sharer, I think, is applicable with greater force in the case of fraudulent purchase by the proprietor to defraud and deprive the subordinate interest‑holder by avoiding such interest under the stringent provisions of the Revenue Sale Law framed for speedy realisation of Government dues but utilised for the accomplish ment of private and fraudulent object:
19. Therefore, the question to be determined in this suit is whether the sale was brought about fraudulently by defendant No. 1 and then he purchased the property in that sale in the benami of his relation, defendant No. 2. The evidence discussed and the circumstances disclosed from the evidence and relied upon by the trial Court leave no room for doubt that the sale was pre‑arranged and brought about fraudulently by defendant No. 1 by making intentional default in payment of revenue to deprive the plaintiff of his property and of the compensation money awarded or to be awarded to him and purchased the property in the benami of his sister's husband defendant No. 2, who will hold the property for the benefit of defendant, No. 1. I cannot agree with the learned Subordinate Judge that the evidence is not sufficient to brand the purchase by defendant No. 2 as a benami one, but I entirely agree with the trial Court and hold that the sale is fraudulent and defendant No. 1 purchased the property in that sale fraudulently in the benami of defendant No. 2. The proprietor making the default intentionally‑there is no reason for his default‑put the machinery of law into operation to cause injury to the plaintiff and purchased the property in the benami of defendant No. 2 who was to hold the property for the benefit of defendant No. 1, a participator in the fraud.
20. Mr. Pal contended that the principle enunciated in the cases which are in respect of fraudulent purchase by a co‑sharer cannot be extended to the purchase by the proprietor even if the sale and the purchase are fraudulent and to the detriment of the subordinate interest‑holder, as the relative position of the co -owner is not the same as the relative position between the proprietor and his subordinate interest‑holder. I do not find any reason why the same principle should not be applied in a sale fraudulently brought about by the proprietor who purchased in the benami of his relation to deprive the subordinate tenure holder of his subordinate interest in the land of the Mahal. The difference, Mr. Pal tried to make out, is a difference without any distinction in principle. Mr. Pal could not support this contention .by any provision of law or any authority cited before me. His contention is that the absence of authority is itself a proof that the principle is not applicable in case of fraudulent sale and purchase by a proprietor to the detriment of the under tenure‑holder.
21. The trial Court on a consideration of the material evidence and the circumstances held that it was a fraudulent sale but the lower Appellate Court held otherwise, namely, that the evidence on record was not sufficient to brand the sale as a benami one. But, in arriving at this finding, the learned Subordinate Judge has neither considered the material evidence, on which the trial Court relied in arriving at those findings, nor has he adverted to the reasons given by the trial Court. A finding of facts by the first Appellate Court without consideration of the material and circumstances on which the trial Court bases its decision is not binding in Second Appeal [vide A. H. Md. Ismail v. Sachchidananda Bhattacherjee (40 C W N 769)].
22. Further if the decision depends upon the appreciation of oral evidence in the case, the Appellate Court has got to bear in mind that it has not the advantage to observe the manner in which the witnesses deposed in the trial Court; but that certainly does not mean that, when an appeal lies on fact, the Appellate Court is not competent to reverse the finding arrived at by the trial Court, but there must be cogent reasons for the same. Vide Saraveeraswami alias Saraveeraju v. Talluri Narayya (A I R 1949 P C 32), and Watts or Thomas v. Thomas (1947 A C 484). But the judgment of the learned Subordinate Judge does not show any such reason. Therefore, the judgment and, decree of the learned Subordinate Judge cannot be maintained and it is liable to be set aside.
23. This` position has not been disputed by, Mr. Pal for the respondents. His contention on the other hand is that when the sale is not liable to be set aside under the law on the ground of benami purchase, even if it is fraudulent, it is immaterial whether the finding of benami was properly arrived at or not. I cannot accept this position as correct, in view of the reported decisions quoted above. Though the sale is not liable to be set aside and it will stand, the Court can safely declare, on account of the fraud and fraudulent purchase by defendant No. 1 in the benami of defendant No. 2, that it will not have any higher effect than payment of arrears of revenue or than a private alienation, as has been held in the reported cases cited above.
24. Mr. Pal contends that even those cases, particularly in the case of Deonandan Prashad v. Janki Singh and others, there are appropriate prayers for the relief granted by their Lordships of the Privy Council, namely, a prayer for a decree for possession and mesne profits and alternatively…
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