1. The present appeal arises out of a suit brought to setaside a sale for arrears of Government revenue of the residue share in MahalDawath, Touzi No. 3308.
2. It appears that the mahal is a large estate consisting ofseven mouzahs that it is owned by a large number of proprietors having distinctshare in one or more of those mauzas. In respect of the Government revenue dueon the whole estate, four separate accounts have been opened by four groups ofowners and the residue or ijmali kalam forms a 5th account. This ijmali kalambelonged to the plaintiff and defendants No. 1 and Nos. 3 to 21. The case forthe plaintiffs was that the defendant-No. 1 and defendants Nos. 3 to 21purposely did not pay the revenue of their share on account of the kist of June1903, that they fraudulently kept their default; concealed from the plaintiff,that they had the proclamations of sale served surreptitiously so that theplaintiffs had no knowledge of them and that it was not till a few days beforethe day advertised for sale that the plaintiff became aware that there was anyarrear, and then that two of them were induced by defendant No. 1 to go withhim, and make a joint application to the Collector praying that the arrearmight be received. That application was rejected, and the ijmali kalam was soldat auction and was purchased by the defendant No. 1 for Rs. 4,000, the real valueof the share being Rs. 50,000. The plaintiffs further state that they appealedto the Commissioner to set aside the sale on the ground of irregularities. Oneof them being that the shares in the villages Nilkanthpore and Guthani, whichamounted to only 2 annas 8 pies each, had been advertised for sale asconsisting of 2 annas 11 pies odd, that the shares so advertised had been soldand had been included in the sale certificate. The Commissioner, however,dismissed the appeal holding that the defaulting proprietors had not beenprejudiced by the sale of a larger share and directing that, as the purchaserraised no objection, the amount of the share sold should be entered in the salecertificate as 2 annas 8 pies only. The plaintiffs alleged that after the dismissalof the appeal, they asked the defendant No. 1 to re-convey to them a share inthe property which he had purchased proportionate to their original sharealleging that the sale had been brought about by his fraud. He, however,refused their request and the defendants Nos. 3 to 21 being in collusion withdefendant No. 1 they have been made joint defendants in the present suit. Thedefendant No. 2 was made a party because the allegation of the defendant No. 1was that he had purchased the estate benami for defendant No. 2. This theplaintiffs alleged to be untrue and stated that the defendant No. 1 hadpurchased the property on his own behalf. They further alleged as a ground forsetting aside the sale that at the time when the ijmali kalam was sold, therewas in fact no arrear due from that share, that three sums, which had been paidinto the Treasury on account of the ijmali share and had at first been enteredin the Collectorate Register as payments on account of that share, hadsubsequently been transferred without authority to the credit of other sharesand these three sums amounted to Rs. 109-2-9, and that, as the arrears forwhich the estate was sold were Rs. 94-8-10, there was in fact at the time ofsale an amount standing to the credit of the ijmali kalam of Rs. 8-5-4. Variousirregularities in the preparation of the notices under sections 6 and 7 of ActXI of 1859 and in entering the sadar jama of the ijmali kalam were alsomentioned, and it was alleged that on account of these irregularities andfraudulent proceedings on the part of the defendant No. 1, intending purchaserswere not fully aware of the sale, that they were deterred from bidding by theknowledge of these irregularities and in consequence the property which wasvalued at over Rs. 50,000 was sold for Rs. 4,000 only. They prayed for adeclaration that the sale of the ijmali kalam held on the 24th August 1903, wasentirely null and void, invalid, illegal and inoperative, that the decision ofthe Commissioner was illegal and that the whole sale should be set aside; inthe alternative, if the Court should hold that the sale could not be set aside,then a declaration was prayed for that the sale was brought about owing to thedefault and fraud on the part of defendant No. 1 and defendants Nos. 3 to 21and that in consequence, the plaintiffs were entitled in equity to claim fromdefendant No. 1 a re-conveyance to them of their original share in the share ofthe estate sold. They further prayed for interest and costs.
3. The suit was originally taken on the file of the DistrictJudge of Shahabad and six issues were framed by him on the 20th and 27th May1904. The 2nd and 3rd issues were to the following effect: Issue No.2:--"Was there any irregularity in drawing up or publishing the notices undersections 6 and 7 Have plaintiffs suffered any loss thereby Can the plaintiffsobtain any relief on that ground." Issue No. 3:--"Was any noticepublished under section 5 If not, was the plaintiff entitled to any relief onthat ground." Dealing with these two issues, the District Judge found thatthe irregularities complained of and which were the subject of the secondissue, were irregularities in the notices themselves and in their publicationand he held that under the provisions of, section 8 of Act VII (B.C.) of 1868,the fact that he had obtained a sale certificate was conclusive evidence infavour of the purchaser that the notices required by that Act or Act XI of1859, had been served and posted. He, therefore, found that issue against the plaintiffs.As regards the third issue, he found that no notice under section 5 wasnecessary and decided that part of: the issue against the plaintiff. Hereserved for further consideration the question whether the plaintiff isentitled to relief on the ground that the estate was sold for arrears otherthan those of the current year. On the 2nd of July, the suit was transferredfor trial to the Court of the Subordinate Judge and was finally heard anddisposed of by that officer. A 7th issue was framed by the Subordinate Judge onthe 17th August 1907. Defendants Nos. 1 and 2 alone filed written statementsand defended the suit. Defendants Nos. 22 to 25 and 30 joined as plaintiffs andthe other defendants did not enter appearance, Defendant No. 1 in his written statementalleged that he purchased the property for defendant No. 2 and not for himselfand denied that there was any fraud. Defendant No. 2 denied the allegations ofthe plaintiffs as to irregularity and illegality in the matter of drawing upand service of notices, as to the non-existence of arrears, and alleged thatthe plaintiffs had no ground to have the sale set aside on the basis of fraud.He alleged that he was the purchaser of the property. The first issue raised inthe case was, "were there any arrears due" In dealing with thisissue, the Subordinate Judge refers to the three items of payment on which theplaintiffs relied--(1) chalan No. 3775, dated 7th June 1895, Rs. 73; (2) chalanNo. 1840, dated 11th January 1897, Rs. 16-2-9; (3) chalan No. 1888, dated 28thMarch 1898, Rs. 20. The Touzi Registers were produced and copies of the samewere filed with the record. These copies have been produced before us and wehave to observe that, from the translation of the same given in the paper-book,it appears that they are very carelessly and imperfectly made. There is nodoubt from the documents that these three sums were originally paid into andcredited to the ijmali account. The Subordinate Judge refers to the generalrule which prevails in the Collectorate that when payments are made underchalan which gives only the touzi number of the estate and do not specify thekhata or separate accounts to which they are to be credited, the sum so paid iscredited to the ijmali share. These chalans are first presented to the AccountDepartment where the money is paid and after the entries have been made in thebooks of that department, the chalans are handed over to Touzi Department inorder that the payments may be posted under the proper heads in the Touzi-Ledger.The chalans under which these three payments were made unfortunately could notbe produced, as, under the rules, they appear to have been destroyed. From thecopies of the registers of the Accounts Department which were filed, theSubordinate Judge states that it appears that these three chalans were enteredin those registers as payments made to the credit of the ijmali lealam. Henotices that in each instance the item so paid, was entered in the Touzi-Ledgerof the ijmali kalam and that afterwards the items were penned through in thataccount and were credited to the account of other shares, and finding this tobe the case, he holds that the onus lay on the defendants to prove how thesecancellations and alterations were made, on what dates, and on whose authority.We think that the Subordinate Judge is wrong in throwing the onus in thisrespect on the defendants. The ordinary presumption is that acts done by aPublic Officer in his official capacity are rightly done and the onus wouldordinarily be on the person alleging the contrary to prove his allegation.Certainly the onus could not be in this case placed on the defendants to provethe dates and circumstances, under which the alterations in these publicregisters were made by officers of the Collectorate at Shahabad. TheSubordinate Judge notices that the defendants have not attempted to prove howand when the alterations were made in the items Nos. 2 and 3. He states thatwith regard to the first item of Rs. 73, a witness, Sheo Golam, was called who wasa proprietor of the share in respect of which khata No. 2 was opened, andstated that that sum was paid on his behalf on the 7th June 1895, for credit tohis separate account, that, it was erroneously credited to the ijmali accountand when he came to know twenty-five days afterwards, he came to Arrah, put ina petition and had the money transferred from the ijmali kalam to the credit ofhis account No. 2. The Subordinate Judge disbelieves the story mainly on theground that the witness was an old enemy of the plaintiff and that the muktearwho is alleged to have made the payment was not asked any question withreference to the transfer. He also states that Sheo Golam must have got thechalan and yet he did cot produce it. He refers to the practice of posting theTouzi-Ledger as stated in the evidence of the Touzi Mohurrir and comes to theconclusion that under that practice mistakes are rectified immediately when theTouzi-Ledger is tested by comparison with the chalan and that no correction canbe made afterwards. He also refers to an instance in which an entry of Rs. 20,which had been erroneously credited to the ijmali kalam, was, on the 11thJanuary 1898, transferred to its proper account and relies on the circumstancethat in that instance there is a distinct order of the Collector directing therectification of the account to support the conclusion that no correction couldbe made without an express order of the Collector. He, therefore, comes to theconclusion that all the arrears and transfers of these three items which weremade from the ijmali account, were made, without the authority of the Collectorand that, therefore, they were correctly entered in the ijmali account and wereimproperly penned through and transferred to the other accounts. He holds,therefore, that these three sums should have been added to the credit of theijmali account, and that when that had been done, there was on the date of theJune kist on the 7th June 1903, a credit of Rs. 11 to the ijmali khata and notan arrear. He, therefore, comes to the conclusion on the first issue that thesale was void on that ground alone, and that at the time of the sale, therewere no arrears in respect of which the ijmali share could be sold.
4. Dealing next with the grounds of irregularity andillegality, the Subordinate Judge expresses some doubt, as to the correctnessof the finding of the District Judge on the 2nd issue, he himself being ofopinion that as the sale certificate was obtained two months after theinstitution of the suit, it could not be produced to debar the plaintiffs inthe present suit from proving irregularities in the preparation and service ofnotices. He then deals with the objection" taken to the sale on the groundof irregularity for non compliance with section 13 of Act XI of 1859. Relyingon certain judgments of this Court to which he refers, he holds that thespecification of the ijmali share given in the notification was not asufficient compliance with the terms of that section. The specification, it maybe observed, states that the residue share is to be sold and gives thedifferent shares in the different villages of which that share consists. TheSubordinate Judge, however, held that it was necessary for the Collector alsoto state not only that the other shares were excluded from sale but also tospecify in detail, the amount of the other shares, and as such specification,had not been made, he holds there was an irregularity in this notice and heproceeds to indicate what in his opinion, was the result of the illegality,namely, that the shares in Mauzas Gothani and Nilkantpur which were sold wereerroneously described as larger than the actual shares included in the ijmalikalam. He criticises the action of the Commissioner in directing the correctionof the sale certificate and expresses the opinion that the order of theCommissioner was illegal, and that the Commissioner had no authority to annul asale in part and confirm it as to the other part. He holds on that ground thatthe whole sale ought to have been set aside.
5. Dealing nest with the question of substantial injury, hecomes to the conclusion on the evidence that the value of the property isRupees fifty thousand, and, as it has been sold for Rs. 4,000, the plaintiffshave suffered substantial injury by the sale. He comes to the conclusion thatas the price is grossly low and inadequate, the legitimate inference may bedrawn that the inadequate price was due to the irregularities.
6. Next he proceeds to deal with the sale certificate whichwas made out in the name of defendant No. 2, though the property was, accordingto the bid-sheet, sold to defendant No. 1. He comes to the conclusion that theDeputy Collector, who issued the sale certificate, had no authority under thelaw to issue it to defendant No. 2, that his action was illegal and thatdefendant No. 2, acquired no title under that certificate.
7. Lastly, he deals with the question of fraud. He finds onthe evidence that defendants Nos. 1 and 3 to 21 did not pay their revenue forJanuary, March and June kists with the exception of Rs. 18 only in January. Hefinds that the purchase at the auction-sale was in fact made by defendant No.1, Hardwar Singh, and that this is clear from conflicting statements made byHardwar and by Harihar, the agent of Ram Prosad., defendant No. 2, in theirevidence. He is of opinion, that the payment of the balance of the price wasmade in the name of defendant No. 2 merely as a blind to conceal the fact thatdefendant No. 1 was the real purchaser and that the sale certificate anddelivery of possession were obtained in favour of that defendant for the samepurpose. This he held to be clear from the fact that defendant No. 1 has sincethe purchase remained in possession of the share of the property sold. He findsthat Ram Prosad is a relative of the defendants, Sadho and others, and thatthere is a secret arrangement between Ram Prosad and defendant No. 1 and otherdefendants under which the purchase-money paid in his name was really paid ontheir behalf. He notices the fact that prior to the sale the defendant No. 1and another defendant accompanied the plaintiffs to put in a petition forpermission to pay in the arrears, but he holds that it was merely to deceivethe plaintiffs into the belief that the default on their part had not beenintentional. He held, therefore, that the plaintiffs had established their caseon all the points and gave them a decree declaring the revenue sale to be voidand inoperative as against them.
8. The defendant No. 2 has appealed. When the appeal firstcame on for hearing, before the Bench of which one of us was a member, it wasthought necessary, in order to deter* mine the first issue, to have theevidence of the Collector of Shahadad taken on commission, and to have the TouziMoharrir of the Collectorate summoned to give evidence before this Court. Theevidence of the Collector has been taken and the evidence of the moharrir hasbeen given and recorded. The main object for which these officers were examinedwas to ascertain the practice under which alterations are made in entries inthe Touzi-Ledger and to ascertain, if possible, the circumstances under whichthe alterations were made in respect to the three items on which the plaintiffsrely. The result of their evidence is, in our opinion, to contradict theconclusions at which the Subordinate Judge has arrived. It appears that afterthe chalans have been taken to the Accountant and the payments have beenreceived and the entries of those payments made in the Accountants Register,the chalans are sent to the Touzi Office and the entries of the payments areposted up in the different accounts. This is the first process. Afterwards, theentries made with reference to each estate are examined to ascertain whatpayments have been entered and what arrears are still outstanding, and when itis discovered, during the preparation of that statement, that the entries inthe Touzi-Ledger are either in excess or below the amount as ascertained fromthe Accountants register, the clerk in charge of the Touzi-Ledger examinee theentries in the ledger in order to ascertain whether there has been any omissionor whether there has been any double entry. In the present instance, the itemNo. 3 for Rs. 20, which was paid in by chalan dated 28th March 1898, appears tohave been entered twice over, namely, in the ijmali account as well as in theaccount No. 1. Moharrir Santok Narain who has been examined has distinctlystated in his evidence that there was this double entry and that he struck theamount out of the ijmali account in the ledger and left it in the account No.1. He explains, and his explanation is supported by the evidence of theCollector, that when the examination is being made and the account is beingprepared on comparison with the chalans, if he then notices that entries havebeen made as payments to one estate or one account which ought to have beenentered as made to another account or estate, the usual practice is for theclerk-in-charge to correct the mistakes in red ink and initial the corrections.After, however, the goshwara account has bean prepared and submitted to theCommissioner, no clerk can on his own authority, make any alteration in theentries in the ledger. If such an alteration is to be made, it is necessary thatthe orders of the Collector should be taken and the ledger is then corrected byadding incorrectly omitted amount to the account from which it has been omittedor by subtracting the amount from the account in which it has been incorrectlycredited. We have gone carefully through the original ledgers and we find thefollowing results with reference to the three items. Item No. 1, namely, Rs. 73paid on the 7th June 1895, was originally entered in the ijmali account and theerror in the account was not detected until the whole account had been drawnup. It was then discovered and alterations were made in red ink by Moharrir,Joy Gobind Sahay, on the 24th October 1895. The payment was originally enteredas made for the first kist of 1895, and the alteration does not appear to havebeen made until the 25th October 1895, that is to say, until after the date forthe second kist which fell due on the 28th September had arrived. On referring,however, to the Touzi-Ledger of the khata No. 2, we find that the sum of Rs. 73was entered as paid in respect of that account for the first kist, that thatcredit was taken into consideration in making up the account and that thebalance was arrived at by crediting that amount into that account. As regardsthis sum of Rs. 73, we have also a copy of the register of the AccountsDepartment for the month of June, 1895, showing that the sum was deposited by aPleader, and then we have the evidence of Sheo Golam Singh that the entry wasmade on behalf of Sheo Golam and that on the discovery of the mistake that thecredit has been made in the ijmali kalam, Sheo Golam applied to the Collectorto have the amount transferred to his separate account. We also find that inthe account of the second kist for the ijmali kalam, the arrears as entered inthe account of the first hist, after deducting the sum of Rs. 73, were enteredas Rs. 160-123 and that sum was, afterwards, paid by chalan No. 1011, on the14th September, leaving an arrear of Rs. 3-9-71/2 due by the proprietors of theijmali kalam. The correction, therefore, appears to have been correctly made bythe clerk when the error was discovered and we see no reason for taking theview which the Subordinate Judge has adopted that the correction was madewithout any authority.
9. The second item is the sum of Rs. 16-2-9 entered in theijmali account as a payment made on the 11th January 1897, under chalan No.1840. The payment was for the 3rd hist of 1897. The original ledger shows thatthis sum of Rs. 16-2-9, which was entered in the ijmali account, must have beenstruck out of the account before the balance was taken in order to determinewhat was due at the end of the kist. The same sum appears to have been enteredin the account No. 1 in the Touzi-Ledger. That account also shows that theentry must have been made before the account was made up and the balance at theend of the kist struck. The Moharrir Santok Narain who has been examined beforeus explains the probable circumstances under which he thinks the alteration wasmade. On referring to the chalan, it was found that the name of Bisseswar Singhwas entered in the chalan but that this fact had not been noticed in theAccountants Office. He, being aware that Bisseswar Singh was one of theproprietors of khata No. 1, came to the conclusion that there was a mistake inentering the sum against the ijmali account and, therefore, at once transferredit to the account No. 1. The explanation appears to us to be sufficient and weare unable to agree with the Subordinate Judge that the entry was made withoutauthority or that it in any way indicates that the sums were not properlycredited to the separate khatas.
10. Next the third item of Rs. 20, paid on the 28th March inchalan 1889. This was entered in the ijmali account and the mistake does notseem to have been discovered until the whole accounts had been drawn up and thebalance prepared. It was corrected, however, according to the entry in the twoaccounts in the Touzi-Ledger on the 24th March 1895, and it must have beencredited to the account No. 1 before the account was finally made up and thebalance struck. There seems no reason, therefore, to hold that the correctionswere not properly made or that they were made without authority. In the case ofthis item as well as of the previous item of Rs. 16-2-9, we find that thebalance was taken on to the next kist and that the arrears as shown were paidup.
11. The Moharrir who has been examined has proved that thepractice is that where the mistakes are detected before the account is submittedto the Commissioner, the corrections are made in red ink by the Touzi Moharrirbut that where the mistakes are not discovered till after the submission of theaccount to" the Commissioner, no mistakes in the register can be alteredbut the error in the credits and debits can only be corrected by subtraction orthe addition under the Collectors order of the sums improperly entered oromitted from the different accounts. In the case of the three items underconsideration, this practice appears to have been followed and, therefore, weare unable to accept the conclusion of the Subordinate Judge that thesecorrections are open to suspicion on the ground that they were made withoutauthority. They appear to have been made in accordance with the usual practiceand have been acquiesced in by the proprietors of the different shares. One ofthe entries was made no less than ten years before suit, and the others sevenor eight years before suit. We think that it would be a very dangerousprecedent to accept the view which the Subordinate Judge has taken and allowthe person, suing to set aside a sale for arrears of Revenue, to go back overthe Touzi Register for a long series of years and then by referring tocorrections made in that register--which corrections may have been properly andlawfully made--to set up the case that at the time when the property was soldthere were in fact no arrears due from the estate.
12. The copies of the ledger for 1894 relating to theaccount of khata No. 1 in the ijmali account, which have been filed by theplaintiffs in order to prove the practice adopted in correcting errors in theTouzi accounts, do not appear to us to support the conclusion for which theyhave been produced. No doubt, in those accounts, there is an entry under theorder of the Collector directing the transfer of Rs. 20 from the ijmali accountto account No. 1. This transfer from the date of the chalan would appear tohave been made some considerable time after the payment was made and,therefore, presumably after the account had been sent in from the Collectorsoffice to the Commissioner. The Collector and the clerk who have been examinedhave both explained that where the error is detected after the account has beensent to the Commissioner, corrections can only be made under orders of theCollector by adding or subtracting amounts in the Touzi Register. The evidencemerely supports the evidence of these two officers and does not in any waythrow any doubt on the propriety or bona fides of the alterations which weremade in respect of the three items on which reliance was placed in the presentsuit. . In our opinion, the evidence satisfactorily establishes that thosethree items were paid by mistake into the ijmali kalam, that the error in eachinstance was detected before the account was sent in to the Commissioner, thatthe corrections were made according to the usual practice by the Touzi Navis incharge of the ledger and that no special order of the Collector was necessary.We think, therefore, that the first ground on which the Subordinate Judge hasheld that the sale is liable to be set aside must fail.
13. As regards the ground taken that the notice of sale wasnot prepared in compliance with the provisions of section 13 of Act XI of 1859,we are also of opinion that the view taken by the Subordinate Judge cannot bemaintained. All that has been held in the cases to which the Subordinate Judgerefers is that the residue must be described in the notification of sale withsufficient accuracy and fullness to enable the intending purchasers to knowwhat is in fact the property that is offered for sale, and where the residueshare is entered in the notification as the residue only without giving itsamount or giving the shares of which it consists or stating the other shareswhich are excluded from the sale, such a description is not a sufficientcompliance with the section. In the present case, however, the notificationmentions the residue share and states distinctly the shares in the differentvillages of which that residue share consists. It also states that the othershares are excluded from sale. It is not alleged that there was any materialerror in the description except with regard to the shares in Mauzas Guthani andNilkantpur which were entered 2 annas 11 pies instead of 2 annas 8 pies. We arenot prepared to agree with the Subordinate Judge that there was in thenotification any failure to comply strictly with the terms of section 13 of ActXI of 1359 and, therefore, we hold that there was no 11 regularity in thedrawing up of that notification.
14. Nor do we think that the remarks made by the SubordinateJudge with reference to the action of the Commissioner are justified. No doubtin the notification of sale and in the sale certificate the shares in these twovillages which were put up for sale were entered as 3 pies in excess of theactual shares. The auction-purchaser, however, was willing to take acertificate for the actual shares and relinquish all claim to the additionalthree pies. Under the circumstances, we are not prepared to say that there wasanything illegal in the action of the Commissioner in allowing the salecertificate to be altered by the substitution of 8 pies for 11 pies in theshare of each of these estates.
15. There remains for consideration lastly the question offraud and whether the plaintiffs are entitled in this suit either to have thesale set aside on the ground of fraud or to obtain a decree directing thatdefendant No. 1 shall convey to them a share in the properties purchased by himproportionate to their share in the original share in the estate sold. Indealing with the cases of fraud, the learned Counsel for the appellant hascontended that there was no distinct allegation of fraud in the plaint or inthe evidence in the Court of first instance and, therefore, that the plaintiffscannot be allowed to succeed on the ground of fraud. In support of that view,he relies on the case of Doorga Singh v. Sheo Pershad Singh 16 C. 194, whichwas followed in the case of Gonesh Persad v. Panday Brij Behary 1 C.L.J. 565 atp. 571. The case of the plaintiffs-respondents was, however, that defendant No.1 and his co-sharers defendants Nos. 3 to 21 had willfully defaulted to pay inthe Government revenue with the intention that the property should be put upfor sale, that they had concealed their fraud from the plaintiffs and that byinducing the Collectorate Officers to serve the notice of sale surreptitiouslythey had concealed from the plaintiffs the fact of the properties being put upto sale until it was too late for the plaintiffs to prevent the sale. Evidenceto prove the concealment of the notice was, in our opinion, relevant tosupport the allegation of fraud based on this and other grounds. In the lowerCourt, no evidence was adduced to prove under what circumstances the noticeswere issued. We have, therefore, directed the lower Court to allow evidence tobe given on this point the plaintiff to prove that there was concealment of thenotices and the defendant to prove that the notices were duly served withoutany attempt at concealment. On this evidence, now coming before us, we haveagain heard the learned Advocate-General on behalf of the appellant and thelearned Pleader for the respondent both with regard to this evidence and withregard to the question of fraud. We have read the fresh evidence adduced and weagree with the learned Advocate-General that it fails to prove any suchcollusion between the defendants and the Officers of Government entrusted withthe service of the various notices and processes connected with the sale forthe purpose of concealing the service from the plaintiffs as would justify usin holding that the defendant has committed fraud by any such concealment andsuppression and so brought about the sale of the property. The learned Pleaderfor the respondents admits that he is unable to contend that the fresh evidencemakes out a case of fraud.
16. The learned Pleader for the respondents, however,contends that apart from this evidence, the facts proved and the conduct of thedefendant No. 1, Hurdwar Singh, are sufficient to support the conclusion thatthe plaintiffs have not lost their share in the property sold by reason offraud on the part of Hurdwar Singh and his co-sharer. It is argued that in facthe was the purchaser of the property at the sale for arrears of revenue, thathe was so entered by the Collector at the time of the sale, that the Collectorhad no power afterwards to substitute the name of Ram Prosad, the relation ofthe defendants Sadho and others, as the purchaser. When the balance of thepurchase money was paid, that defendant No. 1 had that substitutionfraudulently made with the object of concealing his own fraud by suggestingthat in purchasing the property, he was the agent of Ram Prosad and with thefurther object of preventing the plaintiff from recovering his share of theproperty which he might have tried to do if he, defendant No. 1, had stoodforward as the purchaser. It is contended that the successive default on thepart of defendant No. 1 to pay in his share of the three kists of theGovernment revenue due in January, March and June was willful and intentionaland with the fraudulent object of obtaining the whole of the property forhimself at the sale, that when he accompanied the plaintiff to the Collectorbefore the sale with the ostensible object of inducing the Collector to receivethe arrears, he knew that the application was futile, that in taking Rs. 1,000in with him he went prepared to bid if the property were sold, that at the salehe bid in conjunction with and not against the plaintiff thereby inducing theplaintiff to believe that both had the common object of preventing the propertyfrom passing out of their hands, and that when other bidders stopped biddings,seeing that the original proprietors were making bids with the intention ofsaving the property, he succeeded in having the property knocked down to him,that even then he allowed his own name to be entered as the purchaser and theplaintiff to believe that the property had been saved for the originalproprietors, and that it was only afterwards that he tried to carry his fraudinto full effect and prevent the plaintiff from recovering his share of theproperty by having the name of Ram Prosad substituted for his as the purchaserwhen the balance of the purchase-money was paid. The learned Pleader contendsthat this is a case in which, though he admits, that the plaintiffs have notbeen able to make out such a case of fraud as would entitle them to have the saleset aside as void, still they have, against defendant No. 1 and his benamdarRam Prosad, made out a sufficient case of fraud to entitle them to similarrelief to that granted in the case of Bhoobun Chunder Sen v. Bam Soonder SurmaMozoomdar : 3 C. 300, that is to say, to a decree directingthe defendants to re-convey to the plaintiffs the share in the estate whichthey originally held. The learned Pleader, in support of his contention, alsorelies on the case of Amirunnessa Khatoon v. The Secretary of State for Indiain Council 10 C. 63 : 13 C.L.R. 131, in which the view taken in the case ofBhoobun Chunder Sen v. Ram Soonder Surma Mozoomdar : 3 C.300, was approved and on the case of Amirunnessa Khatoon v. The Secretary ofState for India 10 C. 63 : 13 C.L.R. 131, in which the same view was taken.
17. The learned Advocate-General for the appellant, on theother hand, contends that the suit of the plaintiffs must fail entirely. Heargues that the plaintiffs have failed to prove any overt acts of fraud againstdefendant No. 1 or that the sale was brought about by fraud on his part. Hecontends that under the law, a co-sharer in an estate is not under any legalduty to his co-sharers to pay in his share of the Government revenue so as tosave the estate from sale for default, that the risk of default on the part ofa co-sharer is one of the necessary and unfortunate incidents of holdingrevenue-paying estates jointly with others and that it is the duty of theco-sharers for their own protection to satisfy themselves that their co-sharershave paid in their shares of the Government, that any co-sharer may default ifhe pleases with the object of buying in the whole property if it shouldsubsequently be sold for arrears and that at the sale a co-sharer is entitledto buy in the property for himself alone and that the other co-sharers have noclaim on him. He relies on the cases of Doorga Singh v. Sheo Pershad Singh 16C. 194; Deonandan Singh v. Manbodh Singh : 32 C. 111 : 8C.W.N. 757. Special reliance is placed on the remarks of Mr. Justice Banerjeein his judgment in the first of the three cases, in which he says:--
"Every co-sharer in a zamindari may, if he chooses,bring it to sale by not paying the revenue, but every other co-sharer can saveit from sale by paying the arrear, and can recover the amount from thedefaulter. The fact of the defendants being co-sharers in the property did notclothe them with any fiduciary character which disqualified them from buyingthis property unless it was for the benefit of all the co-sharers."
18. We agree with the learned Advocate-General that it isnot possible to hold that a co-sharer is under a legal obligation to hisco-sharers to pay in his share of the Government revenue, but we think that inthat case Mr. Justice Banerjee goes too far when later in his judgment he saysthat the fact that the defendants having been co-sharers which the plaintiffsdid not clothe them with any fiduciary character at all. We think that if theterm "fiduciary character" be used in its broadest sense, this goestoo far, for we consider that it is not possible to hold that betweenco-sharers in a joint estate, all being liable to pay their quota of theGovernment revenue according to their respective shares, no relation of mutualconfidence exists. Otherwise, the position of co-sharers in a revenue payingestate, if they were always open to be overreached and deceived by theirco-sharers, would be intolerable. And we think that this condition ofconfidence, which must under such conditions exist between co-sharers, isimportant in a case like the present as bearing on the view which otherco-sharers are justified in taking when interpreting the conduct of one oftheir co sharers. Ordinarily, a co-sharer in a property would be entitled toexpect, in the absence of any circumstance supporting the contrary view, thathis other co-sharers would act in concert with him for the common object ofprotecting the property in which all are jointly interested, and when aco-sharer willfully defaults in paying in the Government revenue, his conductis not such as his co-sharers might reasonably expect from him. Again, whendefault has occurred owing, it may be, to the willful default of one co-sharerbut of which willful default another co-sharer may not be aware, if the formershould accompany the latter to the Collector, with the ostensible object ofhaving the arrears accepted, the latter would reasonably be entitled to supposethat his co-sharer was acting in unison with him for their mutual benefit, andif the application to the Collector having failed and the property having beenput up for sale, the former bid for the property in concert with and not inopposition to the latter, the latter would reasonably be entitled to believethat such bid was for their mutual benefit and in consequence to refrain frombidding in opposition.
19. If after the sale had been completed and the propertyknocked down to the first-mentioned co-sharer, he at once set up some otherperson as the real purchaser, and if it were found that that person was not thereal purchaser but the co-sharer was the real purchaser and remained inpossession, and if the facts supported the conclusion that the whole previousconduct of the first-mentioned co-sharer, taken in conjunction with andexplained or interpreted by his later conduct, indicated that from the firstact in defaulting up to the final act when he attempted to secure possessionand title as against his co-sharer by setting up a third person as thepurchaser, he had intended to mislead and overreach his co-sharer, would notthese series of acts be sufficient to make out a case of fraud against theco-sharer purchaser We think that having regard to the special relationsexisting between the parties, they would be sufficient to support a case of fraud.
20. In the case before us, we have the fact that thedefendant No. 1 defaulted, not once which might have been the result ofaccident but on three successive occasions. Such conduct unexplained, and noexplanation seems to have been suggested, can only be interpreted asintentional. We start, therefore, with the fact that on three successiveoccasions the defendant No. 1 intentionally defaulted to pay his quota of theGovernment revenue.
21. He must have been fully aware that the probableconsequence of such conduct on his part, if not detected in time by hisco-sharers, would be that the estate would be put up for sale. It may be takenthen that his willful default had for us intention that the whole estate shouldbe brought to sale.
22. It seems true and to be proved by the evidence that theplaintiff knew nothing about the default until the notices for sale of theproperty were issued. Defendant No. 1 then went with the plaintiff to theCollector with the ostensible object of having the sale stopped and the arrearsaccepted. The case for the plaintiff is that this conduct on the part ofdefendant No. 1 was intended to deceive plaintiff into the belief that he wasacting in concert with him for their joint benefit. The previous and subsequentconduct of defendant No. 1 seems to support this contention.
23. The application to the Collector having been refused,the property was put up for sale. Then there is the significant fact that thedefendant, when he went in the Collectors office, ostensibly to stop the sale,took Rs. 1,000 with him. This seems rather to support the conclusion that hewent, expecting that the property would be sold and prepared to bid for theproperty, and goes to indicate what his, intention was throughout.
24. At the sale as evidenced by the bid-sheet, we find fivebidders, viz., defendant No. 1, the plaintiff, Hanka Rai, the alleged agent ofRam Prasad, and two others. Mahadeo, the plaintiff, offered three bids only,all in support of and none in opposition to Hardwar, the defendant No. 1, whileHanka Rai only offered one bid in opposition to Hardwar Singh who promptlyoverbid him. These facts certainly fail to support the case which defendant No.1 afterwards set up to the Collector that he had purchased for Ram Prosad.Further, they go to support the view that the conduct of Hardwar at the saleled the plaintiff to believe that he was bidding for their joint benefit. If,as was subsequently set up, he was bidding for some one else, he certainly inthis respect deceived the plaintiff. Equally, too, there was deceit if hisintention was to secure the whole property for himself while leading theplaintiff to believe he was acting in concert with him for their mutualprotection.
25. The learned Subordinate Judge has found that in factdefendant No. 1 purchased for himself and that Ram Prosad was afterwardsbrought forward as a benamdar either with the object of concealing, or makingmore secure, his fraud. Whether the Collector, after he had accepted HardwarSingh as the purchaser, was justified under the law in after wards issuing thesale certificate in the name of Ram Prosad is doubtful as it would seem thatunder the law the title remained with the accepted purchaser Hardwar Singh,defendant No. 1, but the conclusion at which the Sub-Judge has arrived is fullysupported by the evidence and there seems no reasonable doubt that HardwarSingh is the real purchaser and Ram Prosad is a mere name. What transpired atthe sale leaves no doubt that Hardwar was not acting for Ram Prosad, Hardwarssubsequent conduct in connection with the proceedings in the criminal Court andthe fact that he is still in possession of the property, leave no doubt that heis the actual purchaser.
26. Lastly, there is the fact that property valued at Rs.50,000 has been purchased for Rs. 4,000 and the plaintiffs have not only losttheir share in the property but have suffered a severe pecuniary loss. And thisloss appears to have been the result of the conduct of the defendant No. 1 atthe sale, as when he was found to be bidding with the apparent object of savingthe property from sale, other bidders desisted.
27. The question is whether these acts and this course ofconduct of defendant No. 1 make up a sufficient case of fraud in favour of theplaintiffs to entitle them to the re conveyance of their share of the propertyby defendant No. 1 and the benamdar defendant No. 2. In our opinion, they makeout a clear and strong case of fraud against defendant No. 1. First, there wason his part willful default in paying his share of the government revenue withthe intention of having the whole estate brought to sale. This was followed bythe deceit practiced on the plaintiff before the Collector and at the sale allof which induced the plaintiff to believe that he was acting in concert withhim for their joint benefit. Lastly, there was false substitution of Ram Prosadas the purchaser, after the property had been knocked down at a thirteenth ofits real value, the object of which clearly was to bar any relief which theplaintiff might try to claim against defendant No. 1 as his co-sharer. Thisfraud on the part of the defendant No. 1 is, in our opinion, such as to entitlethe plaintiff to a decree against him directing him and his benamdar defendantNo. 2 to re-convey to the plaintiffs their original share in the estate onreceipt from them of the share of the purchase-money due from them.
28. The result, therefore, is that, though we are unable tosupport the judgment or decree of the Subordinate Judge and hold that the saleis void by reason of fraud in the proceedings under which the property wassold, we find that on account of the fraud practiced by defendant No. 1, theco-sharer of the plaintiffs, in fraudulently contriving to have the estatebrought to sale and himself purchasing it, the plaintiffs are entitled to adecree against the defendants Nos. 1 and 2 directing them to execute within onemonth a deed of re-conveyance to the plaintiffs of their share in the estate ontheir paying to them a share of the purchase-money paid at the sale for arrearsof Government revenue and appropriated by the Government proportionate to theplaintiffs share in the estate.
29. As the appellant has failed in obtaining any real reliefin this appeal, he will pay their costs of this appeal to the respondents.
.
Choudhury Ram Prosad Singhvs. Pawan Singh and Ors.(28.08.1907 - CALHC)