Ramrup Rai vs Firm Mahadeo Lal Nathmal

Harries, C.J.—This is an appeal by defendant 1 from a decree of the learned Subordinate Judge of Bhagalpur decreeing the plaintiffs'' claim that certain property was liable to attachment and sale in execution of a decree held by the plaintiffs against defendants second party. The plaintiffs obtained a decree against the defendants second party on the original side of the Calcutta High Court, and the decree was transferred to the Court at Bhagalpur for execution. The plaintiffs then filed Execution Case No. 173 of 1933 in the Court at Bhagalpur against the defendants second party for realisation of Rs. 24,004 odd and attached the properties now in suit. After the attachment defendant first party filed a claim case No. 63 of 1934 alleging that the said property had been purchased by him, and on 14th July 1934, this claim of defendant first party was allowed.

There appears to have been no contest and the present plaintiff agreed that the claim should be allowed apparently without any investigation. The plaintiffs then instituted the present suit under the provisions of Order 21 Rule 63, Civil P.C., claiming a declaration that the purchase by defendant first party was a f arzi, fraudulent and colourable transaction and that the property really belonged throughout to defendants second party and as such was liable to attachment and sale in execution of the decree held by the plaintiffs against defendants second party.

The learned Subordinate Judge came to the conclusion that the properties in suit really belonged to defendants second party and decreed the plaintiffs'' claim with costs. The facts of the case can be shortly stated as follows: The defendants second party were persons of substance owning considerable properties. They defaulted in payment of road cess, and on 7th March 1932, an eight annas share in touzi No. 3074 in mauza Gobindpur Kosli was put up for sale and purchased by defendant first party. On 7th May 1932, this sale was confirmed, and on 13th February 1933, defendant 1 obtained delivery of possession. On 24th February 1932, a twelve-annas share of tauzi No. 3495 of mauza Gobindpur Kosli was also put up for sale for default by the defendants second party in payment of the road cess, and this share was also purchased by defendant 1. On 25th April 1932, the sale was confirmed, and on 13th February 1933, defendant 1 obtained delivery of possession of the same.

In 1933 the plaintiff obtained his money decree against the defendants second party and attached the two shares which had been the subject-matter of the rent cess sales. As I have stated, defendant first party preferred a claim under Order 21, Rule 58, Civil P.C, alleging that he was the owner in possession of the shares in question, and his claim was allowed on 14th July 1934. It has been contended by the appellants that this suit is not maintainable. It is urged that as the claim of the defendant under Order 21, Rule 58, Civil P.C., was allowed by consent, the plaintiff cannot maintain a suit under Order 21, Rule 63.

The actual order allowing the claim of the defendant first party is in these terms:

The opposite party in Case No. 63/34 asks the Court to allow the claim petition and the claimant also does not press for costs. Claim Case No. 63 is allowed without costs.

There can be no doubt that the present plaintiff who was the opposite party in the claim case did not contest the claimant''s claim and in fact invited the Court to allow it, and for that reason the claimant gave up his right to costs. It has been argued that a suit under Order 21, Rule 63, Civil P.C., is in the nature of an appeal to set aside the summary order passed in the proceedings under Order 21, Rule 58, Civil P.C. As the summary order was passed by consent, it has been strenuously contended that no proceedings in the nature of an appeal to reverse such an order can be entertained. It is important to consider the position of the parties in the summary proceedings under Order 21, Rule 58, Civil P.O. The present plaintiffs had attached certain properties which undoubtedly stood in the name of defendant 1.

They could only maintain their right to attach and sell those properties if they could show that defendant 1 was merely a benamidar for defendants second party. It has however been laid down rightly or wrongly by this Court that an executing Court cannot go into the question as to whether a transaction is benami or not in summary proceedings under Order 21, Rule 58. In Ram Kishun Singh and Others Vs. Damodar Proshad and Others, J. held that a Court was not entitled to go into a question of benami in a case arising under Order 21 Rule 58 or Rule 100. At page 108 the learned Judge observes:

The question raised in Civil Revision No. 219 of 1923 is, whether the learned Subordinate Judge was entitled to consider the question of benami in an application under Order 21, Rule 100. It has been held in a series of cases that in a claim case arising under Order 21, Rule 58, the Court is not entitled to go into a question of benami. The finding of the learned Subordinate Judge in this case that the applicant was the benamidar of Kall Prashad is based on reasons which are entirely speculative. In my opinion, the learned Subordinate Judge was not entitled to go into a question of benami in order to determine whether the applicant was in possession of the disputed property in his own right.

A similar view was expressed by Fazl Ali J. in Ganesh Lal Sarawagi Vs. Mahabir Sahu and Another, the learned Judge observes:

Now it is contended by the learned advocate for the petitioner that it was necessary for the learned Subordinate Judge to have gone into the question as to whether the sale deed was genuine or collusive, because without going into the question he could not have properly decided as to whether the claimant was in possession of the property on his own account or in trust for the judgment debtor. The contention of the learned advocate is not without some force, but at the same time it must be remembered that it has been repeatedly held that in a claim case arising under Order 21, Rule 58, the Court is not entitled to go into the question of benami.

It has been argued by counsel for the respondents that these cases and others preceding them are wrongly decided, but it is unnecessary for me to express any opinion in this case. One thing, however, is clear and that is that this Court has laid down that in proceedings under Order 21, Rule 58 of the Code the executing Court is not entitled to go into the question as to whether a transaction is or is not benami. These cases are binding on the lower Courts, and are well known to all the practitioners and Judges of those Courts.

That being so, it is clear that the plaintiffs in the present, case could not hope successfully to resist the claim of defendant 1 in the claim case. He could only resist that claim by inviting the Court to go into the question as to whether the purchases were benami, and this the Court could not do by reason of the law as laid down by this Court. In such circumstances, the plaintiffs might well have asked the Court to allow the claim in order to enable him to contest the correctness of the decision in a suit instituted under Order 21 Rule 63, Civil P.C. No evidence was adduced in this case as to what transpired in the execution Court; but the form of the order strongly suggests that all that happened was that the plaintiffs, realizing the impossibility of contesting the claim in those proceedings, asked the Court to pass the order which it would be bound to pass to enable them to bring proceedings under Order 21, Rule 63, Civil P.C., without delay.

There is nothing in the form of the order passed to suggest that the plaintiffs ever gave up their right to contest the matter by means of a suit.

The admission of the plaintiffs appears to me to be merely an admission for the purposes of the summary proceedings under Order 21, Rule 58, Civil P.C. He was anxious that the claim should be allowed in that Court so that he could bring appropriate proceedings to challenge the nature of the transactions. Such a course is frequently followed in Appellate Courts where an appellant knows that he cannot succeed in a particular Court by reason of a decision binding on that Court.

He frequently mentions his point and informs the Court that it is useless arguing and invites the Court to dismiss his appeal in order that he can appeal to a higher Court to challenge the correctness of the decision binding on the lower Court. In my view a party, who makes an admission for certain purposes in summary proceedings, does not necessarily admit the correctness of the claim of the other party. He may be compelled in summary proceedings to admit the claim, but that does not mean that he admits it for all purposes.

In my view the admission in this case must be confined to the proceedings in which such admission was made, and as there is nothing to show that the plaintiffs ever gave up their rights to question the decision of the claim case, they can maintain the present suit under Order 21. Rule 63.

Counsel for the respondents strongly relied upon the case in AIR 1926 Lah 348 Mulkh Raj v. Ralla Ram Rao Mal. In that case the property in dispute was attached in execution of a decree, and the attachment was objected to by the, judgment-debtor''s brothers. Before the executing Court could give its decision on the objection decree-holder applied for release of the property, stating that he would bring a regular suit to have it declared liable to attachment and sale and then brought the suit. It was held that when an objection was made under Order 21, Rule 58, it was not open to the decree-holder to refrain from contesting the objection, to withdraw the attachment and then to bring a suit under Order 21, Rule 63, Civil P.C.

The rule contemplates that the objector''s claim is accepted or disallowed by the executing Court and it is only the party against whom the order was made who may institute a suit to establish the right he claims to the property. It was further held that the rule precluded all suits except the one allowed by the rule and therefore the suit was not competent under any other provision of the law. At p. 237 Zafar Ali J. observes:

The question therefore is whether it is open to a decree-holder to withdraw the attachment and then to bring a suit under Rule 68. We are of opinion that it is not. Rule 63 contemplates that the attachment was objected to and that the objector''s claim was accepted or disallowed by the executing Court. If the claim is once accepted by the decree-holder himself he is evidently precluded from bringing a suit to contest it because the suit should be brought by the party against whom the order is made and not by the patty who himself sought that order and obtained it.

In my view a party who realizes the hopelessness of resisting a claim in summary proceedings and consents to the claim being allowed is nevertheless a party against whom an order is made and consequently he can bring a suit under Order 21, Rule 63. The fact that a party actually invites an order to be made against him does not render him any less a party against whom an order is made. A contrary view was taken by a Bench of the Madras High Court in AIR 1915 Mad 1128 Venkatarama Aiyar v. Narayana Aiyar. In that case the decree-holder agreed that the claim petition of the claimant should be allowed but without costs, and an order was made accordingly.

Nevertheless, the Court held that the decree-holder was entitled to maintain a suit under Order 21, Rule 63, Civil P.C., to contest the order of the executing Court. Some of the reasons given by the learned Judges for coming to this conclusion have been criticized by counsel for the respondents: but in my view the Madras decision is to be preferred to that of the Lahore High Court. Unless the facts show that the decree-holder gave up his right to contest the matter under Order 21, Rule 63 a consent order or an order passed without objection by the executing Court in summary proceedings can be challenged and a suit is maintainable.

Upon the merits I am satisfied that the learned Subordinate Judge was right in holding that defendants second party were the real owners of the properties attached. The plaintiffs called a number of witnesses to prove that through, out the defendants second party had been in possession of this property and the evidence called by the plaintiffs is strongly corroborated by the circumstances of the case and documents adduced in evidence. The defendant''s description of how he came to purchase these two properties is extraordinary. In his evidence at page 32 he stated:

I had no information prior to the sales that the shares are going to be sold but I had gone to D.B. office to take Rs. 35 which had been sanctioned for the repair of the Hariho School of which I am Secretary and while going there heard the Collectorate peon calling out bid T. No. 3495 in the Certificate Office. I deposited the earnest money on the date of the sale and the balance within 29 days. On the day I came to deposit the balance of the purchase money I learnt in the office that T. Ho. 374 was also going to be sold and so I purchased it also. I did not engage any pleader or mokhtear for purchasing these shares. I did not make any inquiry regarding this village before bidding at these sales.

If defendant 1 is to be believed, he accidentally heard of these two sales and immediately decided to purchase. It was indeed a most fortunate purchase for him, because he bought properties valued at Rs. 10,000 for under Rs. 200. The defendant''s version as to how he came to purchase these properties cannot, in my view, be possibly accepted. It is clear that these valuable properties were sold to realise very small amounts of road-cess. The twelve-annas share in tauzi No. 3495 was sold to recover about Rs. 110 of road-cess, whereas eight annas share of tauzi No. 474 was sold to recover a sum of Rs 58-3-0 for road-cess. No effort apparently was made by defendants second party to pay these small amounts, and even when the properties had been sold and purchased by defendant 1 the defendants second party could have recovered the properties by paying just a little more than the amounts for which they were sold.

According to defendant 1, Atul Prasad alias Tulo, who represented the defendants second party, did not approach him for some two or three months after these sales to buy back the property, and this is difficult to believe. The learned Sub-ordinate Judge has pointed out that the defendants second party, though heavily indebted were men of considerable substance and he found it impossible to believe, and I agree with him, that defendants second party would have allowed these valuable properties to go out of the family for such small arrears of road cess.

The evidence also shows that defendant 1 was a servant of defendants second party though this was strenuously denied by the defendant 1 himself. Bhothri Mahto (P.W. 1) stated that he had been told by Ramrup that he was in the service Of Tulo and he had also learnt from Ramrup''s father that the latter had also been in Tulo''s service. Santokhi Mahto (P.W. 3) stated that Ramrup sometimes lived in Kharia village near the witness and sometimes at Pakra and that Ramrup was in the service of Tulo and had been in such service for the last ten years.

He also said that Ramrup''s father who had died about ten years previously had also been in the service of Tulo. Chanchal Rai (P.W. 4) gave similar evidence and so did Awadh Narain Missir (P.W.)

Ramrup himself admitted that he had attended the Pakra school which was in the village of defendant 2 and a long way from his ancestral home. He stated that he went to Pakra as his father had lands in village Sapardah; but he had to admit that that village was about seven koses from Pakra and that one had to cross a river at Kadwa in order to get to Pakra from Sapardah. It appears to me that the circumstances show that Ramrup had connexion with Pakra which strongly suggests that the evidence of the plaintiffs'' witnesses that he was a servant of Tulo is true.

I see no reason whatsoever for rejecting the plaintiffs'' evidence that Ramrup was a servant of Tulo; and that being so, he must have been acting for Tulo when he made the purchases at these certificate sales.

Another striking fact is that within eight days of Ramrup obtaining possession of the properties which he had purchased in the certificate sales defendants second party executed a mukarrari patta in his favour giving a mukarrari settlement of four other tauzis in village Gobindpur Kosli and of their 8 annas share in another village at a total jama of Rs. 3. The mukarrari patta is Ex. 1, and from this document it would appear that defendant 1 paid a salami of Rs. 900, Defendant 1 said that he had paid this sum; but there is no other evidence to support him.

The annual jama of Rs. 3 is an absurdly small amount for such a mukarrari and it is impossible to believe that this was a genuine transaction. Why should defendants second party have given this mukarrari to defendant 1 within a few days of the latter obtaining possession of the properties purchased in the certificate sales ? Ramrup says that he would not give up the properties purchased unless he was paid Rs. 4000 and yet defendant 2 made practically a gift of valuable property for a nominal annual jama. The learned Subordinate Judge has pointed out that the properties comprised in this mukarrari were valuable and the transaction is inexplicable unless defendant 1 was being used to shield defendants second party.

It is an admitted fact that at this time defendants second party were heavily indebted. Ex. 15 is an insolvency petition filed by Atul Prasad alias Tulo, dated 2nd January 1933, and this shows that at that time Tulo was indebted to the extent of about Rs. 93,000. The learned Subordinate Judge was of opinion that Ramrup was allowed to buy the two properties in suit in the certificate sales and was later granted a mukarrari of five other properties in order to place these properties out of the reach of the creditors. In my view the facts clearly show that such was the case.

A number of witnesses were called on behalf of defendant 1 to show that rent was paid to him and that he made settlements of property in this village as the owner thereof. If defendant 1 was a benamidar, it is only natural that his name should be mutated in place of defendants second party and that receipts for rent and such like should be given in his name. The fact that outwardly defendant 1 appeared to be the owner is in no way conclusive. There are certain other transactions which are very difficult to understand unless defendant 1 was a benamidar of defendants second party. It appears that Tulo and others purchased the holding of one Tejnarain Singh in June 1933, that is four months after defendant 1 had obtained possession of the properties in suit.

These purchases are proved by Exs. 22 and 22(a) which are printed at pp. 28 and 29 of part 3 of the paper-book. Though the interest of Tejnarain Singh was purchased by Tulo and others, it is clear that the property was settled by defendant 1 as will be seen from kabuliats B (1), B (2), B (3) printed at pp. 45, 39 and 42 respectively of part 3 of the paper-book. It is impossible to explain how Ramrup came to settle these lands which had been purchased by Tulo and others if he was entirely independent of them and not a mere tool in their hands. There is another significant fact in this case, namely that sufficient cattle were attached in each certificate case to satisfy the amount of cess due from defendants second party.

Why these cattle were not sold is not explained, and it is inconceivable that zamindars of substance would allow a village near their ancestral home to be sold if the road-cess could have been satisfied by the sale of some of their cattle. The facts show that the defendants second party were anxious that the properties now in suit could be sold and purchased by some one on their behalf. No other explanation is possible having regard to the facts of this case.

The learned Subordinate Judge who saw and heard the witnesses in this case came to the conclusion that Ramrup had never been in possession of the properties alleged to have been purchased by him and that he had acted throughout as benamidar of defendants second party. In my judgment, it is impossible to say that the learned Judge was wrong in so holding and accordingly I would dismiss this appeal with costs.

Manohar Lall, J.

I entirely agree and wish to make only a few observations with regard to the argument advanced by the appellant that the present suit is not maintainable because of the effect of the order passed in the claim case at the suggestion of the respondent. That order is Ex. J at p. 35 of Part III of the paper-book. The order has been quoted in extenso in the judgment delivered by my Lord the Chief Justice. The order, as I pointed out in the course of argument, is equivocal. It may mean that the plaintiff agreed that the claimant was a benamidar or that the plaintiff asked the Court to allow the claim petition because he thought that the question of benami could not be properly gone into by the executing Court in summary proceedings. In these circumstances it was the duty of the defendant who relied upon the order as a bar to the maintainability of the suit to show the circumstances under which that order was passed and in particular he ought to have alleged and proved the agreement, if any, into which the plaintiff entered with him.

Strange as it may seem the pleadings and the evidence are entirely silent upon this point. The plaintiff merely stated in para. 6 of the plaint that

the court was pleased to allow the said claim case by its order dated 14th July 1984 without recording any evidence in the case.

The whole of this allegation is true. It was next asserted in para. 11 of the plaint that the order passed was wrong. The defendant merely stated in para. 7 of the written statement that because the defendants were in possession and occupation of the land which had been illegally attached the plaintiffs got the costs remitted thinking it unnecessary to contest the case.

The parties did not adduce any evidence at all as to the circumstances under which the Court came to allow the claim petition. The result is that this Court is exactly in the same position as in Sardbarl Lal v. Ambika Per shad (1888) 15 Cal 521 where it was pointed out, in answer to the argument that Section 280 of the Act of 1877 (which corresponds to the provision which we are now considering) did not contemplate that any order should be made until after an investigation which is directed by Section 278, that

in the first place we do not know what took place before the Subordinate Judge who made this order. It may have been that the parties who were before him agreed so far upon facts that he was enabled to deliver his opinion off-hand. But besides that, the Code does not prescribe the extent to which the investigation should, go; and though in some cases It may be very proper that there should be as full an investigation as if a suit were instituted for the very purpose of trying the question, in other cases it may also be the most prudent and proper course to deliver an opinion on such facts as are before the Subordinate Judge at the time, leaving the aggrieved party to bring the suit which the law allows to him.

therefore, agree that when it has not been proved in this case that the plaintiff has contracted himself out; of his statutory rights which are given to him in clear terms under Order 21, Rule 63, he cannot be debarred from instituting a suit like the present to obtain the appropriate relief. But reliance was placed upon the case in AIR 1926 Lah 348 Mulkh Raj v. Ralla Ram Rao Mal. In that case the decree-holder himself applied for release of the property from attachment before the executing Court, after the objectors had put forward their claim to be the owners in their own right, stating that he would bring a regular suit to have it declared liable to attachment and sale.

The learned Judges of the Lahore High Court held that in these circumstances the decree-holder was precluded from instituting a declaratory suit under Order 21, Rule 63, because

If the claim is once accepted by the decree-holder himself he is evidently precluded from bringing a suit to contest it because the suit should be brought by the party against whom the order is made and not by the party who himself sought that order and obtained it.

With great respect I am unable to agree with the proposition which is thus broadly stated. If an investigation of the circumstances under which the decree-holder applied for the release of the property from attachment discloses that the decree-holder has accepted the claim of the claimant, he is obviously debarred from instituting another suit; but, if the claim is accepted only for the purposes of the summary enquiry as appears to have been the position in the Lahore case, I am of opinion that the decree-holder was not precluded from bringing a suit.

There can be no estoppel against a statute. Again the order passed by the executing Court is none the less an order passed against the decree-holder even though he asked that such an order should be passed. I find that the view which I have expressed is supported by the decision of the Madras High Court in .AIR 1915 Mad 1128 Venkatarama Aiyar v. Narayana Aiyar where the facts were almost similar. In that case, it was argued that there was an agreement between the parties that the claim petition should be allowed with costs and that the plaintiff should, in consideration of the defendant giving up his costs, refrain from instituting such a suit as the present.

The agreement which was relied upon as a bar was held to be not proved upon the facts and the learned Judges took the view that the indications of the agreement were that the claim petition was allowed to succeed on the understanding that the plaintiff was to institute a suit under Order 21, Rule 63. I respectfully adopt the following observations of the learned Judges to be found at p. 537:

In the present Case, it is because the order on. the claim petition is binding on the plaintiff that he can institute a suit to get rid of the effects of the order (Order 21, Rule 63, Civil P.C.). This is also an answer to the objection that there was no order against the plaintiff, an objection which we have some difficulty in understanding. It is quite clear that when it was decided that the plaintiff was not entitled to attach the property which he had purported to attach, there was an order against him. The fallacy of the argument is caused by assuming that because a party does not object to an order being passed against him therefore the order that is passed is not against him.

In the case before us the agreement is not only proved but is not even alleged in the pleadings. For these reasons I agree that the appeal fails and should be dismissed with costs.