Bajrang Prasad Singh vs Mt. Sonejhari Kuer and Others

Das, J.—This application is directed against the order of the learned Subordinate Judge of Muzaffarpur, dated the 25th March, 1924, by which he set aside a sale which took place on the 13th June 1918. The application under Order 21, Rule 90 was presented sometime in April 1923 and this has encouraged the contention on behalf of the decree-holder that the application is barred by time. The learned Judge in the Court below has come to the conclusion that the auction-sale was brought about by practising fraud and that the applicant is entitled to the benefit of Section 18 of the Limitation Act. In that view differing from the learned Munsif, he allowed the application and set aside the sale.

In my opinion the finding of the learned Judge in the Court below must be regarded as a finding to the effect that all the circumstances were present to entitle the judgment-debtor to have the sale set aside provided the application was made within time. I am not for the moment considering the question as to whether the decision of the learned Judge on the question of limitation can be supported; but his finding that there was gross irregularity in the conduct of the sale and that the judgment-debtor sustained substantial injury by reason of such irregularity is binding upon me in this Court. It is true that the learned Subordinate Judge has gone much further and said that there was fraud on the part of the decree-holder. I am not quite satisfied whether upon his decision it is possible to say that there was fraud on the part of the decree-holder. It is quite true that there was gross undervaluation of the property sought to be sold. It is quite true that the processes were not served on the judgment-debtor; but fraud is essentially different from irregularity in the conduct of sale. This was pointed out very forcibly by Sir Lawrence Jenkins in Narayan Sahu v. Mohant Damodar Das 16 C.W.N. 894. But in any case I am satisfied that there was gross irregularity on the part of the decree-holder and that the applicant sustained substantial injury by reason of such irregularity, and that if there was no question of limitation raised in the case, the judgment-debtor would undoubtedly be entitled to succeed.

This brings me to the consideration of the question whether the learned Judge in the Court below is right in the view that the judgment-debtor is entitled to the benefit of Section 18 of the Limitation Act. The view of the learned Subordinate Judge may be stated in his own words: "The applicant alleges in her petition that she came to know of the sale on the 5th April, 1923. In her evidence she says that she came to know about it on 4th Baisakh 1330 which corresponded to the above date. As it has been found that the sale was brought about by the decree-holder''s fraud, it is for the decree-holder or his tenant to show that the applicant had knowledge before the 5th April, 1923, in order to succeed on the plea of limitation. I find, therefore, that the application was not barred by limitation.

I am unable to agree with the view as presented in this part of the order of the learned Subordinate Judge. In the first place, I am not sure that the fact referred to by the learned Subordinate Judge established a case of fraud. It is, therefore, necessary for the learned Subordinate Judge to deal with all the evidence again and to come to a conclusion on the question whether there was really any fraud on the part of the decree-holder. If he comes to the conclusion that there was irregularity but not fraud within the meaning of that term as was in the decision of Sir Lawrence Jenkins, then clearly the application is barred by limitation. If he comes to the conclusion that there was fraud then the next question which he must consider is, whether upon the facts proved the judgment-debtor is entitled to the protection of Section 18 of the Limitation Act. Now Section 18 provides that "Where 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 or of 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." In order to succeed the judgment-debtor must establish that there was some contrivance on the part of the decree-holder by which the judgment-debtor was kept from the knowledge of her right to apply under Order 21, Rule 90 of the Code. It is, in my opinion, not sufficient to say that as there was fraud in the conduct of the sale, therefore, it must follow that there was a contrivance on the part of the decree-holder to keep the judgment-debtor from the knowledge of the fraudulent sale. Indeed in some of the cases it has been broadly laid down that fraud precedent to the accrual of the right of action can never be considered u/s 18: but whether this view can be maintained in view of the decision of the Judicial Committee in Rahimbhoy Habibhoy v. Charles Agnew Turner (1893) 17 B. 341 is very doubtful. This was pointed out by Sir Lawrence Jenkins in the case to which I have referred but as was suggested by Sir Lawrence Jenkins fraud is a continuing influence and until that influence ends it retains its power of mischief. It was directly held by the Judicial Committee in the case to which I have referred that where a man has committed fraud and has kept property thereby, it is for him to show that the person injured by the fraud and suing to recover the property has had clear and definite knowledge of those facts which constituted the fraud at a time which is too remote to allow him to bring a suit. In view of what was decided by the Privy Council, I am unable as at present advised to accept the view that fraud antecedent to the accrual of the right of action can never be considered u/s 18. In my opinion it can and must be considered, because as pointed out by Sir Lawrence Jenkins, fraud is a continuing influence and until that influence ends it retains its power of mischief.

But although I am unable to agree with the extreme contention which has been put forward before me, I think, that the petitioner is entitled to succeed on the ground that the judgment of the lower Appellate Court does not show that there was any fraudulent concealment of the execution proceedings on the part of the appellants. As this matter has not been very carefully considered by the learned Judge in the Court below, I am unable to decide the contention between the parties in this case. I think the best course will be to send the case back to the lower Appellate Court and ask it to come to a conclusion on the evidence in the case. The learned Judge must first consider whether there was fraud as distinct from material irregularity in the matter of the sale. If he comes to the conclusion that there was no fraud, then he must dismiss the application on the ground that it is barred by limitation. If he comes to the conclusion that there was fraud still, he must consider whether there was any fraudulent concealment of the execution proceedings on the part of the appellants. In considering this matter he must not ignore what had taken place before the sale. Ha must consider the general conduct of the decree-holder both before and after the sale and he must deal with the question whether, to quote the language of Section 18, the judgment-debtor has been kept from the knowledge of her right to apply by means of fraud perpetrated by the decree holder.

Costs of this application, hearing fee two gold mohurs, will be costs in the proceeding before the Court below and will be disposed of by that Court.