Back
HIGH COURT OF CALCUTTA
LAW, J.
Sk Moula Buksh - Appellant
Versus
Dharamchand Raniwalla – Respondent
Decided On : March 16, 1961
Suit for declaration that auction sale held on 5 December 1957, and the agreement for sale of the same date are null and void and liable to be set aside and cancelled respectively, on the ground of fraud, misrepresentation and for suppression of material defect in the seller's title by the defendants nos. 1 to 4 and for want of saleable interest in the properties sold.
Fact of the Case:
On 5 December 1957, an auction sale was held for the sale of properties owned by Aminuddin Ahmed. The plaintiffs, Sk. Moula Buksh and S. M. Rashid, were declared the highest bidders and purchasers of the right, title and interest of Aminuddin Ahmed in his undivided 10/18ths share of premises Nos. 12a and 12b Fulbagan Road for Rs. 17,000/-. The plaintiffs duly paid Rs. 4,250/ - being 25 per cent, of the purchase price to Mackenzie Lyall and Co., and entered into an agreement with them in accordance with the form attached to the notification of sale and the conditions of sale. However, the plaintiffs later discovered that before the auction, Aminuddin Ahmed had entered into agreements with third parties which made the sale void, inoperative and not binding upon them. The plaintiffs, therefore, repudiated the agreement and demanded refund of the 25 percent, of the purchase money deposited by them from Mackenzie Lyall and Co., as money had received and/or upon total failure of consideration.
Finding of the Court:
The court found that there was a deed of assignment by Aminuddin Ahmed of his right, title and interest in premises Nos. 12a and 12b Fulbagan Road, Calcutta in favour of defendant No. 5 on 15 February 1949. The court also found that the defendants Nos. 1 and 2 had knowledge of the Deed of assignment dated 15 February 1949 prior to 24 April 1958 and that the defendant No. 4 had constructive notice of it. The court further found that the defendants Nos. 1, 2 and 4 fraudulently suppressed the prior Assignment from the Notification and Conditions of Sale dated 17 August 1957 and 5 December 1957. The court held that the sale held on 5 December 1957 was void and has been duly avoided and is liable to be set aside and further the agreement for sale must be declared to be invalid and be cancelled and the plaintiffs are entitled to claim refund of the deposit.
Issues: 1. Was there any deed of assignment by defendant No. 3 of his right, title and interest in premises Nos. 12a and 12b (formerly No. 12)Fulbagan Road, Calcutta in favour of defendant No. 5? 2. Did the defendant No. 3 have any saleable interest in the said premises sold to the plaintiffs on the date of sale and/or decree dated the 7th December, 1956 ? 3. Did the defendants Nos. 1, 2 and 4 fraudulently suppress the prior assignment dated the 15th February, 1949 in the Notification of Sale being Ex. B to the plaint? If so, is the sale liable to be set aside? 4. Did the defendants Nos. 1, 2 and 4 have knowledge of the Deed of assignment dated 15th February 1949 prior to 24th April, 1958 ? 5 (a) Are the plaintiffs entitled to repudiate the sale and claim refund of the amount paid by them as earnest money ? (b) Was there a total failure of consideration, as alleged in paragraph 6 of the plaint? 6. Did the defendant No. 4 forfeit Rs. 4250/-? If so, was such forfeiture wrongful, illegal, inoperative and not binding on the plaintiffs, as alleged in paragraph 7 of the plaint? 7. Has this Court jurisdiction to entertain this suit ? 8. Is the suit barred by res judicata or principles analogous thereto as stated in paragraph 3 of the written statement of defendants Nos. 1 and 2? What relief, if any, are the plaintiffs entitled to?
Ratio Decidendi: The court held that the defendants Nos. 1, 2 and 4 fraudulently suppressed the prior Assignment from the Notification and Conditions of Sale dated 17 August 1957 and 5 December 1957. The court also held that the defendants Nos. 1 and 2 had knowledge of the Deed of assignment dated 15 February 1949 prior to 24 April 1958 and that the defendant No. 4 had constructive notice of it. The court further held that the sale held on 5 December 1957 was void and has been duly avoided and is liable to be set aside and further the agreement for sale must be declared to be invalid and be cancelled and the plaintiffs are entitled to claim refund of the deposit.
Final Decision: The court declared that the auction sale held on 5 December 1957 is void, illegal and inoperative and is set aside. The court also declared that the alleged agreement for sale dated 5 December 1957 entered into and executed by and between the plaintiffs and the defendant No. 4 is invalid, inoperative and not binding and is cancelled. The court further declared that the Order dated 3 July 1958 is not binding on the plaintiffs. The court decreed Rs. 4250/-against defendants Nos. 1, 2 and 1 together with interest thereon at 6 percent, per annum from 3 January 1958 till the date of the decree. Interest on the decretal amount of Rs. 4250/- at 6 per cent. and costs. The defendant No. 4 was directed to deliver up the agreement for sale dated 5 December 1957 to the plaintiffs after cancellation thereof.
1. This is a suit by am auction-purchaser for a declaration that the auction sale held on 5 December 1957, and the agreement for sale of the same date are null and void and liable to be set aside and cancelled respectively, on the ground of fraud, misrepresentation and for suppression of material defect in the seller's title by the defendants nos. 1 to 4 and for want of saleable interest in the properties sold. The facts out of which this action arises are as follows:
2. On or about the 4 December 1956 Dharam Chand Raniwala and a Motilal Jhunjhunwala jointly filed a suit being suit No. 3032 of 1956 of this Court against Aminuddin Ahmed alias Aftabuddin Ahmed for recovery of Rs. 5,000/- for money lent and advanced on a promissory note. At the time of the filing of the above suit Dharam Chand and Motilal also held a registered mortgage from Aminuddin on his 10/l8ths share in premises Nos. 12a and 12b Fullbagan Road and 23/a and 23/b, Mofidu Islam Lane which had by then become due and payable. It appears that a mortgage suit was not brought as it had to be filed in the Alipore Court on payment of advalorem duty. On 7 December 1956 a consent decree was passed in suit No. 3032 of 1956 for Rs. 5,000/ -. From the Terms of Settlement filed it appears that Aminuddin Ahmed agreed to pay the decretal amount out of the sale proceeds of his undivided 10/18ths share in the properties mortgaged which was to be sold by Mackenzie Lyall and Co., by public auction to the highest bidder on proper advertisement. The decree provided that the auctioneers would pay the decretal amount as provided in the decree and retain all costs incurred for such sale and their commission out of the sale proceeds and thereafter pay the balance to the judgment debtor Aminuddin Ahmed. It was further provided that Messrs. Mackenzie Lyall and Co. would be competent to execute a conveyance for the sale on behalf of Aminuddin Ahmed if he refused or neglected to do so and in case Mackenzie Lyall and Co., refused to act as auctioneer, Dharam Chand Raniwala and Motilal Jhunjhunwala, the plaintiffs in that suit would be competent to) act as such auctioneers on the same terms and conditions and with like powers therein provided.
At the time of this consent decree the defendant Aminuddin Ahmed appeared in person unrepresented by any Solicitor and from the terms it appears also that he waived the service of the writ of summons. After passing of the consent decree it appears that on 17 August 1956 a notification of sale and conditions of sale of the aforesaid properties was published by Messrs Mackenzie Lyall and Co. under instructions of Messrs. S. N. Mukherjee and Co., Solicitors for Dharam Chand Raniwala and Motilal Jhunjhunwala in terms of the consent decree. I find that the sale so advertised and fixed for 17 August 1956 was in fact not held on that date and thereafter on 5 December 1957 the properties were again advertised for auction by Mackenzie Lyall and Co., on the same terms and conditions as before, under instructions from Messrs. S. N. Mukherjee and Co. the Solicitors for the decree-holders. This auction was duly held on 5 December 1957 when Sk. Moula Buksh and S. M. Rashid were jointly declared the highest bidders and purchasers of the right, title and interest of Aminuddin Ahmed in his undivided 10/18ths share of premises Nos. 12a and 12b Fulbagan Road for Rs. 17,000/ -. The auction-purchasers duly paid Rs. 4,250/ - being 25 per cent, of the purchase price to Mackenzie Lyall and Co., and entered into an agreement with them in accordance with the form attached to the notification of sale and the conditions of sale. Thereafter on 30 December 1957 before the date of completion had arrived the auction-purchasers repudiated the agreement inter alia on the ground that during investigation of title they had discovered that before the auction the judgment-debtor Aminuddin Ahmed had entered into agreements with third parties which made the sale void, inoperative an
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
