2007 Supreme(SC) 952

2007(5) Supreme 828
Supreme Court of India
C.K. Thakker & P.K. Balasubramanyan, JJ.
Punjab National Bank — Petitioner
versus
Sahujain Charitable Society and Ors. — Respondents
Appeal (Civil) 2950 of 2007
(Arising out of SLP(C) No.18483 of 2005)
Decided on : 11-07-2007

important points
The tardiness of the process of court is one of the aspects that is held out as a discrediting one for the judiciary. Matters before the courts are required to be dealt with in an appropriate manner, but with a little more expedition.
Assignees subsequent to preliminary decree cannot have equity over and against the original shareholders who were parties to the preliminary decree.

Headnote:Partition Act, 1893 – Section 3 – The Court ordering sale of the property in auction as early as on 21.7.1987 giving permission to the sharers to bid and set off – Subsequently also the Court on 1.3.2000 directing a sale based on a fresh valuation – The plaintiff-Bank, instead of ensuring that the sale took place, allowing the matter to linger and thereafter seeking assignment of the rights of the others by belatedly invoking Section 3 of the Act – Request rightly declined. (Para 12)

       Partition Act, 1893 – Sections 2 and 6 – When fresh valuation was directed, the plaintiff appealed before the High Court, obviously belated, challenging the order for sale on fresh valuation – However the Court ordered yet another valuation on agreement of parties and then confirmed the sale in favour of the plaintiff at the value suggested by the new valuer – The matter should have stopped there – The two assignees being subsequent to the preliminary decree, did not have equity in their favour and their applications, that too belated, should not have been entertained – Considering the larger share held by the plaintiff and considering the area held in its possession, it would be just and proper to accept the offer of the plaintiff and restore the order of the High Court dt.24.6.2005 to sell the suit property to the plaintiff, but at the enhanced price of 2,01,00,000 offered by it. (Para 12, 13 and 15)

       Facts of the case :

       The suit property, subject matter of the partition, consisted of two buildings and the land on which it stood. Out of the total 124 shares in the property, the plaintiff held 83 shares, defendant No. 1 held 8; defendants 2 to 7 each held 4; defendant No. 8 held 8; and defendant No. 9 held 1. The total extent was said to be 64333 sq. feet. Out of this, the plaintiff - bank was in possession of an extent of 14930 sq. feet. On 22.6.1977, a preliminary decree for partition was passed. It was declared that the plaintiff was entitled to 83 out of 124 shares and that the same be allotted to the plaintiff. It also directed that other sharers be allotted their respective shares. The preliminary decree became final. It is necessary only to notice that respondent No. 1 herein was not a party to the preliminary decree and no share was allotted to it. But, it appears that subsequently, respondent No. 1 purchased the shares of defendants 1 to 4 and 9 and respondent No. 5 acquired 8 out of 124 shares taking an assignment from defendant No. 8. Thus, both respondents 1 and 5 herein who were impleaded in the final decree proceedings, were assignees from sharers, subsequent to the preliminary decree.

       A commission was issued for actual effecting of division pursuant to the preliminary decree. The Commissioner assisted by a surveyor for valuation of the property, found that a partition by metes and bounds could not conveniently be made. The buildings were valued at Rs. 25,00,000/- At this stage, defendant No. 8 owning 8 out of 124 shares, moved an application for sale of the property. It is somewhat surprising that the plaintiff - bank which held upward of a moiety of shares, did not seek to enforce its rights to buy the rights of the other sharers in terms of Section 3 of the Partition Act. The court, on that application by defendant No. 8, took note of the report of the Commissioner that it was not convenient to divide the properties by metes and bounds and directed by order dated 21.7.1987, that the property be sold in public auction. The sharers were given liberty to participate in the sale and to set off the purchase price to the extent of their shares. It appears that this order was not implemented for about 12 years. Thereafter Respondent No. 5, the assignee from one of the sharers, moved a fresh application for sale of the property. During the course of proceedings, the court noticed the earlier order and directed its implementation but ordered a fresh valuation, in view of the lapse of time.

       The valuer submitted a fresh valuation and suggested that the value would be Rs. 1,06,62,000/-. At this stage, the plaintiff purported to make an application under section 3 of the Partition Act seeking to buy the shares of the other sharers. This petition was rightly dismissed as the prayer was barred by the order for sale already made. An application for review of that order was also dismissed.

       Now, the plaintiff purported to file an appeal against the order by which the court directed the sale of the property pursuant to the earlier direction but on the basis of a fresh valuation. In that appeal, a Division Bench noticing that the parties had agreed to settle the matter if a proper valuation was made, directed yet another valuation to be made. This time, the valuer valued the property at Rs. 1,04,96,000/-, less by about Rs. 2 lakhs from the previous valuation. The Division Bench thereafter directed that the valuation submitted be accepted and the other sharers execute conveyances in favour of the plaintiff-Bank on the plaintiff depositing the amount less its share and making it liable for meeting all Municipal dues. The price payable was later corrected to show the purchase price as Rs. 1,06,42,000/-, higher of the two subsequent valuations. Thus, the property was directed to be taken by the plaintiff for the price of Rs.1,06,42,000/-. The amount was deposited. The sale was affirmed and the Commission for partition directed to handover possession of the vacant portion on the third floor to the plaintiff, within a week.

       At this stage, an application was made to recall the earlier orders and to stay the implementation of the subsequent orders. Respondent No.1 herein, the assignee subsequent to the preliminary decree, offered to purchase the property for Rs.1,25,00,000/- as against Rs.1,06,42,000/- for which it was sold to the plaintiff. The court directed the respondent to deposit Rs.1,25,00,000/- without prejudice. The amount was deposited. Later, respondent No.1 herein offered to purchase the property for Rs. 2,00,00,000/-. The plaintiff was not willing to make any higher offer but raised the objection that the sale in its favour had been confirmed, it has deposited the price and nothing more remained to be done. The Division Bench of the High Court proceeded to set at naught everything that had happened earlier including its own confirmation of the sale in favour of the plaintiff and asserting that it could not keep its eyes shut to the enhanced price that may be fetched for the property, proceeded to go back upon its earlier orders and directed the property to be sold to respondent No.1 at Rs. 2 crores and granted time to respondent No. 1 to make the deposit. It is this order of the Division Bench that is challenged by the plaintiff.

       Findings of the Court :

       The assignees subsequent to the preliminary decree did not have equity in their favour and their applications should not have been entertained.

       Result : Appeal allowed.