CALCUTTA HIGH COURT
M.C. Ghose, J.
Majaharali & Anr. - Appellant
Versus
Mafijaddi Sardar & Anr. - Respondent
Decided On : 28-07-1936
Fraudulent Sale - Mortgagees' Petition - The court considered the issue of fraudulent sale of a tenure purchased by a third party at auction, and the applicability of Section 18 of the Limitation Act in setting aside the sale.
Fact of the Case:
The petitioners, mortgagees of a tenure, sought to set aside the sale of the tenure at auction, alleging fraudulent suppression of sale processes by the decree-holder and substantial loss suffered. The trial Court set aside the sale, but the appellate Court reversed the findings and dismissed the petition.
Finding of the Court:
The Court analyzed the evidence on the service of the sale proclamation and the valuation of the property. It found that the processes were not suppressed and that the question of valuation was not important. The Court also held that the extended time under Section 18 of the Limitation Act could only be claimed against a person guilty of fraud or accessory thereto, not against an innocent third party.
Issues: The issues involved the alleged fraudulent suppression of sale processes, valuation of the property, and the applicability of Section 18 of the Limitation Act in setting aside the sale.
Ratio Decidendi: The Court's decision was influenced by its findings on the service of the sale proclamation, the valuation of the property, and the interpretation of Section 18 of the Limitation Act, which limited the extended time for claiming against a person guilty of fraud or accessory thereto.
Final Decision: The Rule was discharged with costs, and the hearing fee was assessed at one gold mohur.
ORDER
M.C. Ghose, J. - In this case the petitioners were mortgagees of certain tenure. Opposite party No. 1, the landlord, instituted a rent suit, got a decree and in execution of that decree put up the tenure to sale. It was sold at auction and purchased by another person, opposite party No. 2, wife of opposite No. 3, and not the decree-holder. After about six months the petitioners applied to set aside the sale on the grounds that sale processes had been fraudulently suppressed by the decree-holder and that by such sale the petitioners had suffered substantial loss. The trial Court set aside the sale. In appeal the findings were reversed and the petition was dismissed.
2. It is urged in this Court that the learned Munsif, carefully considered all the evidence on the issue of the service of the sale proclamation. He noticed that the witnesses named in the peon's report were not examined but other persons were brought in to prove the service of the sale proclamation and that a person was brought in who stated that he had beaten the drum whereas his name was not in the peon's report. The Court of appeal considered that the defect might have been due to the mistakes of the peon. The appellate Court did not believe that the processes had been suppressed. On the matter of the valuation the Munsif found that the value of the property would be Rs. 1,200 as it appeared that this particular property had been sold in 1928 for Rs. 1,300. The Court of appeal below considered that since 1928 there had been fall in prices of staple food-crops; there was correspondingly fall in prices of land and the prices in 1935 could not be as in the year 1928. But that as in his opinion there was no suppression of notices, the question of valuation was not important. On this point the Court of appeal below upon consideration of the evidence has come to its finding and in an application u/s 115, Civil P. C., his findings cannot be attacked on the ground of error in appreciating the evidence. The last point taken is that the Court of appeal below recorded a finding that even if there was a finding of fraud on the part of the decree-holder the petitioner would not succeed against the auction-purchaser who was a third party and against whom there was no allegation of fraud. On this point the case in Kedar Hura v. Asutosh Roy (1927) 44 C L J 565 is quoted. Upon perusal of the judgment and upon consideration of Section 18, Lim. Act, it cannot be said that the Court of appeal below was wrong. Section 18 of the Act runs as follows: Whore any person having a right to institute a suit or make an application, has, by means of fraud, been kept from the knowledge of such right of or the title on which it is founded, the time limited for instituting a suit or making an application (a) against the person guilty of the fraud or accessory thereto, or (b) against any person claiming through him otherwise than in good faith and for a valuable consideration shall be computed from the time when the fraud first became known to the person injuriously affected thereby....
3. On a plain reading of the section the extended time can only be claimed against a person guilty of the fraud and against a person accessory thereto and against a person who claims through the person who committed the fraud. From this it would appear that it cannot be claimed against an innocent third party against whom ordinary limitation would apply. In a case u/s 115, Civil P. C., even an error of law is not a sufficient ground for interference by the High Court. See the case in Amir Hassan Khan v. Sheo Baksh Singh (1885) 11 Cal 6 The Rule is discharged with costs, hearing fee being assessed at one gold mohur.
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