P.J.S. Jayarama Chettiar vs D. Annamalai Chettiar

Kailasam, J.—The first Defendant in Original Suit No. 136 of 1958 District Munsif''s Court, Vellore, is the Petitioner in Civil Revision

Petition No. 1240 of 1965 and the Appellant in Appeal Against Appellate Order No. 123 of 1963. The first Defendant and the Plaintiff are sons

of sisters and were each entitled to a half-share in the property which is a house. A preliminary decree granting a half-share to the Plaintiff was

followed by a final decree, which was confirmed by this Court in Second Appeal No. 1234 of 1961. The Plaintiff-Respondent filed Interlocutory

Application No. 1395 of 1962, for passing of the final decree. He also filed Interlocutory Application No. 1500 of 1962 u/s 2 of the Partition Act

and Section 151, Code of Civil Procedure, praying for the sale of the property on the ground that it could not be conveniently divided as between

the sharers. The trial Court held that the property cannot be conveniently divided and directed the sale. On appeal this order was confirmed.

Against the order directing sale of property u/s 2 of the Partition Act, the first Defendant has filed Appeal Against Appellate Order No. 123 of

1963.

After the disposal of Interlocutory Application No. 1500 of 1962, the first Defendant filed Interlocutory Application No. 1338 of 1963 u/s 3 of

the Partition Act offering to purchase the half-share of the house belonging to the Plaintiff. The trial Court held that it had no jurisdiction to pass an

order on the application u/s 3 as it had already passed an order u/s 2 directing the sale of the property. The Defendant has preferred Civil Revision

Petition No. 1240 0f 1965 contending that the trial Court had failed to exercise the jurisdiction vested in it by law.

The question that arises for consideration in the civil revision petition is whether Interlocutory Application No. 1338 of 1963 which was filed u/s

3 of the Partition Act is maintainable after an order for sale has been made in an application u/s 2 of the Partition Act. The answer to this question

depends upon the construction of Sections 2 and 3 of the Partition Act TV of 1893. The two sections may be usefully extracted. They read:

Whenever in any suit for partition in which, if instituted prior to the commencement of this Act, a decree for partition might have been made, it

appears to the Court that, by reason of the nature of the property to which the suit relates, or of the number of the share holders therein or of any

other special circumstances, a division of the property cannot reasonably or conveniently be made and that a sale of the property, and distribution

of the proceeds would be more beneficial for all the shareholders, the Court may, if it thinks fit, on the request of any of such shareholders

interested individually or collectively to the extent of one moiety or upwards direct a sale of the property and a distribution of the proceeds.

(1) If, in any case in which the Court is requested under the last foregoing section to direct a sale, any other shareholder applies for leave to buy

at a valuation the share or shares, of the party or parties asking for a sale, the Court shall order a valuation of the share or shares, in such manner

as it may think fit and offer to sell the same to such shareholder at the price so ascertained, and may give all necessary and proper directions in that

behalf.

(2) If two or more shareholders severally apply for leave to buy as provided in Sub-section (1), the Court shall order a sale of the share or shares

to the shareholder who offers to pay the highest price above the valuation made by the Court.

(3) If no such shareholder is willing to buy such share or shares at the price so ascertained, the Applicant or Applicants shall be liable to pay all

costs of or incident to the application or applications.

Section 2 contemplates a request by shareholders interested to the extent of one moiety or upwards for directing the sale of the property and

distribution of the proceeds. If, on such request, the Court is satisfied, by reason of the nature of the property to which the suit relates, or of the

number of the shareholders therein, or of any other special circumstances, a division of the property cannot reasonably or conveniently be made,

and that a sale of the property and distribution of the proceeds would be more beneficial, it may direct the sale of the property.

Section 3 provides that when a request u/s 2 is made for a sale any other shareholder may apply for leave to buy the share of the Applicant u/s

2 for the value that may be fixed by the Court as provided for. Section 3 further provides that when two or more shareholders apply for leave to

buy, the Court shall order the sale of the share to the shareholder who offers to pay the highest price above the valuation made by the Court.

A reading of Section 3 discloses, that, when a request is made for sale of the property by share holders owning one moiety or upwards, any of

the other shareholders may apply for leave to buy the share of the persons applying for sale. It is also clear that Section 3 contemplates the

existence of a request u/s 2 before an application can be made under this section. But the section is not specific as to when exactly an application

for leave to buy should be made. It can only be made after a request is made u/s 2. But the section does not specify that it should be made before

the order of sale is made. It was contended by Mr. T.R. Ramachandran, the learned Counsel for the Petitioner, that there is no prohibition against

filing an application for leave to buy after an order of sale is made. He submitted that it is only when the Court decides that the property should be

sold, an application for leave to buy can be made, for the sharers opposing the sale are entitled to hope that the Court may not direct the sale and

the necessity for leave to buy will arise only after an order of sale is made. From the wording of the section, it is clear that a shareholder seeking

leave to buy can do so immediately on a request made u/s 2 for the sale. I do not find any specific words restricting the application u/s 3 to be

made only before an order is made u/s 2. I am also inclined to accept the plea of the learned Counsel for the Petitioner that the right of a share

holder for leave to buy would properly arise only when an order of sale is made and when he is constrained to purchase the property or allow the

property to be sold to others.

The learned Counsel for the Respondent submitted that the question has been concluded by a Bench of this Court in his favour in Angamuthu

Mudaliar v. Ratna Mudaliar ILR (1925) Mad. 920. Relaying on this decision, the learned Counsel submitted that any application u/s 3 can only be

made before the Court directs the sale u/s 2 of the Partition Act.

In the case cited, in a partition action when a decree was passed, there was an order by the trial Court directing the sale of a house by consent

of parties, The Official Referee found that it was not convenient to divide the house into two halves. Therefore, it was decided to sell the property

under the Partition Act. Subsequently, the Plaintiff filed an application u/s 3 of the Partition Act claiming to buy the property at a valuation fixed by

the Court. The Bench, on the facts, held that Section 3 is not applicable to the facts of the case, as the parties had agreed that the property be sold

u/s 2 and that the consent order had not been set aside and was still in force. It also found that there was no application by the Defendant for sale

and in the absence of such application for sale, Section 3 of the Partition Act, cannot be invoked. It was pointed out that the parties agreed to the

sale being ordered and there was no application made by any of the parties for sale.

On the two grounds mentioned above, the Court below held that Section 3 was not applicable to the facts of the case. In deciding the case, the

following observations were made at page 923:

It is clear to our minds that Section 3 of the Partition Act cannot be applied after the Court had already directed a sale and in this case the sale was

with the consent of all parties.

It is further observed:

It seems to us therefore that the proper time to apply u/s 3 is before a Court makes an order u/s 2, and after the request had been made by one of

the parties that the property should be sold...Section 3 contemplates that, when the application is made by one of the parties to direct a sale of the

property and before the Court makes the order any other party who is entitled to a share in the property may at once apply for leave to buy at a

valuation and when such an application is made....

These observations are strongly relied on by the learned Counsel for the Respondent while the learned Counsel for the Petitioner submits that

they are in the nature of obiter dicta and in any event, should be confined to the facts of the case where the order of sale was made with the

consent of the parties and not on an application filed u/s 2 of the Partition Act. The learned Counsel for the Petitioner also submitted that the Court

was not quite correct in reading Section 3 to contemplate that when an application is made for sale the other party who is entitled to a share in the

property should at once apply for leave to buy before the Court makes an order for sale. Section 3 does not in terms require that an application u/s

3 should be made before the Court makes the order of sale. If the observation of the Bench is not obiter dicta, it would have been incumbent on

me to refer this question to a Bench of this Court. But as the observation of the Bench is in the nature of obiter dicta it is not binding on me. With

respect, I find myself unable to agree with the view expressed by the Bench.

A Bench of the Calcutta High Court in Nitish Chandra Ghosh v. Promode Kumar Ghosh ILR (1953) Cal. 243 expressed its inability to accept

the view of the Madras High Court in Angamuthu Mudaliar v. Ratna Mudaliar ILR (1925) Mad. 920. The Calcutta High Court held: (at page 245)

...on a plain reading of the section, we would hold that an application u/s 3 could be made at any time after the request is made u/s 2 and before a

sale has actually been held u/s 2.

I am in respectful agreement with the view expressed. There is nothing in Section 3 requiring a sharer entitled to make an application u/s 3 to

apply before the sale is actually held. There is no justification for holding that the application should be made before the sale is ordered. When once

the sale has been actually held, rights of third parties would interfere and an application u/s 3 may not be available.

For the reasons stated above, I am of the view that the lower Court was in error in dismissing Interlocutory Application No. 1338 of 1963 on

the ground that it had no jurisdiction as sale has been ordered in Interlocutory Application No. 1500 of 1962.

It was further contended that so tar as the appellate Court is concerned, as an appeal against the order directing the sale is pending in this

Court, it cannot be stated that the order of sale has become final and as the order has not become final, the petition u/s 3 will, in any event, lie

before the civil miscellaneous second appeal is disposed of. In the view I have taken that the petition u/s 3 can be filed after an order of sale, but

before the sale is actually held, it is unnecessary to consider this question.

In the result, Interlocutory Application No. 1838 of 1963 is remanded to the trial Court for disposal according to law. The order directing sale

in Interlocutory Application No. 1500 of 1962, out of which Appeal Against Appellate Order No. 123 of 1963 arises, will be subject to the

decision in Interlocutory Application No. 1338 of 1963. Civil Revision Petition No. 1240 of 1965 is allowed and no further orders are necessary

in Appeal Against Appellate Order No. 123 of 1963. There will be no order as to costs in the civil revision petition and civil miscellaneous second

appeal.