Sathi Lakshmanan K.c. And Another v. P.c. Mohandas And Others

Sathi Lakshmanan K.c. And Another v. P.c. Mohandas And Others

(High Court Of Kerala)

Writ Petition (C) No. 4546 of 2007 | 03-07-2008

M. Sasidharan Nambiar, J.When there is no request as provided u/s 2 of Partition Act, whether Court is competent to direct sale of the property by auction among the shares or by public auction Whether for an equitable and fair division of the property dehors of Partition Act court can direct sale of the property or is it mandatory to allot the property to one of the sharers with a direction to pay compensation to the other shares if it is found that the property cannot be reasonably and conveniently be divided. These are the questions to be answered in this Writ Petition filed under Article 227 of the Constitution of India.

2. The facts are not complicated O.S. 224/1999 was instituted before Sub Court, Kozhikode for partition and separation of share of plaintiffs. As per the preliminary decree, it was found that plaint schedule property is available for partition and it is to be divided into 26 equal shares and plaintiffs are entitled to one share. So also defendants 5 to 8 together are entitled to one share. Plaintiffs filed I.A. 761/2003 for passing a final decree in accordance with the preliminary decree. A Commission was appointed to divide the property. Commissioner submitted report stating that property cannot be divided into 26 equal shares as it is a residential plot having an extent of 15 cents comprised in survey No. 253 of Kalathinkunnu Village of Kozhikode and the residential building and its appurtenant land and it is not feasible or possible to divide the property into 26 shares. Defendants 5 to 8 then raised a claim that they have been residing in the building for the last 60 years and therefore the property is to be allotted to them. It was resisted by the other sharers including plaintiffs contending that defendant No. 5 is owing a double storied residential building and allotment of the property to defendants 5 to 8 is not equitable. Learned Sub Judge found that the property cannot reasonably or conveniently divided and conducted an enquiry. As per order dated 4.12.2006 court directed defendants 5 to 8 to produce the title deed relating to their property having a double storied residential building owned by 5th defendant making it clear that on their failure to produce the document, property will be put to, auction among the sharers and if so all the sharers would get their share in the sale proceeds. Finding that it is not feasible or possible to divide the property into 26 equal shares and defendants 5 to 8 did not produce the document as directed, as per order dated 16.12.2006, learned Sub Judge held that defendants 5 to 8 are not entitled to allotment of the property to themselves and the property is to be auctioned among all the sharers and posted the case for auction on 10.1.2007. On that day defendants 5 to 8 as one group and all others as another group participated in the auction. Defendants 5 to 8 offered to bid for a value of Rs. 49,50,000/-. But the other group consisting of plaintiffs and other defendants offered to bid for Rs. 50,00,000/- (fifty lakhs only). Learned Sub Judge accepted that offer being the highest and directed to deposit the amount by 12.2.2007. The amount as directed was deposited. By that time defendants 5 to 8 filed this petition to quash Ext.P1 to P3 orders and to direct the trial court to value the property and to allow petitioners to retain the property on payment of the value of the shares to the other sharers declaring that petitioners are entitled to retain the schedule property in which they have been residing uninterruptedly so as to preserve the residential house falling into the hands of strangers.

3. Learned senior counsel Sri. Govindh K. Bharathan appearing for petitioners relying on the commentaries of Partition Act by Basu (fourth Edition) argued that Partition Act (hereinafter referred to as the) was enacted to preserve the family property falling into the hands of strangers and when it is shown that petitioners have been residing in the residential building for the last more than 60 years, in equity court should have allotted the property to the petitioners with a direction to deposit the value to be fixed by the Court on a valuation and directing division of that amount in proportion to the respective shares. It was argued that direction to sell the property in auction among the sharers is unjust and unfair. Relying on decision (K. Subha Rao, C.J.) of High Court of Andhra Pradesh in R. Ramaprasada Rao v. R. Subbaramaiah AIR 1958 A.P. 647 which was relied on by the Apex Court in Badri Narain Prasad Choudhary and Others Vs. Nil Ratan Sarkar, it was argued that even when provisions of Section 2 and 3 ofare not applicable, court has the inherent power to evolve an equitable method of division and auction among the sharers is not the right method. The learned senior counsel relying on the observations in Badri Narain Prasad Choudharys case (supra) argued that when petitioners who are entitled to one share and the remaining 25 sharers are pitted against each other, and property is auctioned, petitioners could be easily outbid by the other sharers and in such circumstance, it is not an equitable or fair mode of division and instead court should have valued the property and directed petitioners to deposit the amount on such valuation and the orders of the learned Sub Judge are to be set aside. Relying on the decision of a learned single Judge of this Court in Krishnan v. Narayanan 2002 (3) KLT 165 it was argued that this Court accepted the principle that sharers who are residing in the building are entitled to get the building allotted to them and the other sharers are only entitled to the value of the property to be assessed by the court and Exts.P1 to P8 orders are to quashed.

4. Advocate Sri. Sudhi Vasudevan learned Counsel appearing for plaintiffs supported by the learned Counsel appearing for other defendants argued that Section 2 and 3 of thehas no application to the facts of the case at all. It was argued that when petitioners are only entitled to 1/26 shares, they are not entitled to get the property allotted to them, especially when it is admitted that 5th defendant is owning a double storied residential building which is claimed to be occupied by her argued that as per the allegations in the Writ Petition itself her sons defendants 7 and 8 are in Gulf and in such circumstance, petitioners cannot be heard to contend that they will be outbid by other sharers and in fact petitioners have better financial wherewithal. It was also argued that as per order dated 4.12.2006, court made it clear that if petitioners are having a residential building, they cannot claim allotment of the property and in that event the property will be sold among the sharers and the value divided and inspite of the direction to produce title deed in respect of their other residential building, petitioners did not produce the title deed as directed and therefore Ext.P2 order was passed on 16.12.2006 providing for auction among the sharers and auction was conducted on 10.1.2007 and petitioners participated in the auction and bid the property for Rs. 49,50,000/- and in such circumstance, they are estopped from contending that they have no financial capacity to bid in the auction sale or that it is not a proper or just method of division and in such circumstance, petitioners are not entitled to challenge Exts.P1 and P3 orders. Relying on the decision of Chief Justice Subba Rao in Ramaprasad Rao v. Subbaramaiah AIR 1958 A.P. 647 it was held that Court is competent to direct sale of the property among the sharers by auction and it is the most beneficial mode of division in the circumstance of the case and therefore writ petition is only to be dismissed. Learned Counsel relying on the decision of a learned single Judge of this Court in Anthony Ammal v. Antony 1983 KLT 645 which was approved by the Division Bench in Parangodan v. Lakshmikutty 1993 (2) KLT 33 argued that when it is not feasible to divide the property by metes and bounds, the just and equitable method is to divide the property by auction between the sharers. Relying on the decision of a learned single Judge of this Court in Sreedharan v. Bhaskaran 1963 KLT 692 it was argued that court has the inherent power to sell any item of property for its equitable distribution and that right is apart from the provisions of the and in such circumstance, the Writ Petition is only to be dismissed.

5. The Partition Act (Act IV of 1893) was enacted to amend the law of relating to partition. The statement of objects and reasons reveals that as per the law then stood, court must give a share to each of the parties and cannot direct sale and division of the proceeds in any case whatsoever and instances occasionally occur where there were any insuperable practical difficulties in the way of making an equal division and in such cases court is either powerless to give effect to its decision or is driven to all kinds of shifts and expedients in order to do so. The objects show that the law was enacted to supply the detect in the law by giving the court, under proper safeguards, a discretionary authority to direct sale where partition cannot reasonably be made and sale, would in the opinion of the court be more beneficial for the parties. The power which it was proposed to give to the Court was a discretionary one to be exercised on a consideration of all the circumstances of the case providing that where court is obliged to direct sale, a right of preemption is given to the parties similar to the one conferred on shareholders u/s 310 of the Code of Civil Procedure, 1882.

6. Section 2 and 3 of thewhich are the relevant provisions read as follows:

2. Whenever 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 shareholders therein, or of any other special circumstance, 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.

3. Procedure when cosharer undertakes to buy-(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 shareholders 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.

The scheme of Section 2 and 3 is that if the nature of the property is such or the number of shareholders is so may or if there is any other special circumstances and division of the property cannot reasonably or conveniently be made, court can in its discretion on the request of any of the shareholders interested individually or collectively to the extent of one moiety or upwards, direct sale of the property and distribute the proceeds among the shareholders. Where court has been requested u/s 2 by any of the shareholders interested individually or collectively to the extent of one moiety or upwards co direct sale, any other shareholder or shareholders can apply for leave to buy at a valuation, the share or shares of the party or parties asking for sale. In such a situation, court is obliged to order valuation of the share or shares and offer to sell the same to the shareholder who has applied for leave to buy the share at a price ascertained by the Court. In other words, if a plaintiff in a suit for partition has invoked the power to order sale instead of division in a partition as provided u/s 2, and the other shareholder undertakes to buy at a valuation, the share of the party asking for sale, court has no option or choice or discretion left with it. It is bound to order a valuation of the share and offer to sell the same to the shareholder undertaking or applying to buy it at a valuation. The purpose underlying the section undoubtedly is co prevent the property falling into the hands of third parties, if that could be done in a reasonable manner. In case only one sharer apply co purchase the share or shares of the party asking for sale, court has to order sale to that party after ordering a valuation of the share as it may thinks fit. To invoke the power u/s 2, it need only appear to the court that by reason of the nature of the property to which the suit relates or all the number of shareholders therein or any other circumstances a division of the property cannot reasonably or conveniently be made and that sale of the property and distribution of the proceeds would be more beneficial for all the shareholders.

7. The sale provided u/s 2 is a public sale. The purpose of enactment of Section 3 is to prevent the family property coming into the hands of third parties in the event of a sale as provided u/s 2. Considering the scope of Section 2 and 3 Apex Court in R. Ramamurthi Iyer Vs. Raja V. Rajeswara Rao, held:

The various stages in the proceedings would be as follows under Sections 2 and 3 of the Partition Act.

1. In a suit for partition if, it appears to the Court that for the reasons stated in Section 2 a division of the property cannot reasonably and conveniently be made and that a sale of property would be more beneficial it can direct sale. This can be done, however, only on the request of the shareholders interested individually, or collectively to the extent of one moiety or upwards.

2. When a request is made u/s 2 to the court to direct a sale any other shareholder can apply u/s 3 for leave to buy at a valuation the share of the other party asking a sale.

3. The court has to order evaluation of the share of the party asking for sale.

4. After the valuation has been made the court has to offer to sell the share of the party asking for sale to the shareholder applying for leave to buy u/s 3

5. If two or more shareholders severally apply for leave to buy the court is bound to 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.

6. If no shareholder is willing to buy such share or shares at the price so ascertained the application u/s 3 shall be dismissed, the applicant being liable to pay all the costs.

11. A question which presents a certain amount of difficulty is at what stage the other shareholder acquires a privilege or a right u/s 3 when proceedings are pending a partition suit and a request has been made by a co-owner owning a moiety of share that a sale be held. One of the essential conditions for the applicability of Section 2 of the Partition Act is that it should appear to the court that a division of the property cannot reasonably or conveniently be made. To attract the applicability of Section 3 all that the law requires is that the other shareholder should apply for leave to buy at a valuation. Once that is done the other matters mentioned in Section 3(1) must follow and the court is left with no choice or option. In other words, when the other shareholder applies for leave to buy at a valuation the share of the party asking for a sale the court is bound to order valuation of his share and offer to sell the same to such shareholder at a price to be ascertained.

8. But Section 2 and 3 of thecan be invoked by the court only on the request or application by a qualified shareholder. Section 2 contemplates request of any of the shareholders interested individually or collectively to the extent of one moiety or upwards, for sale of the property and distribution of the proceeds. To invoke that power on the request of the shareholder interested to the extent of one moiety or upwards, it should appear to the court that by reason of the nature of the property to which the suit relates or to the number of shareholders therein or of any other special circumstance division of the property cannot reasonably or conveniently be made and that sale of the property and distribution of the sale proceeds would be more beneficial for all the shareholders. Sub-section (1) of Section 3 can only be applied in a case where a request is made u/s 2 for a sale. Under Sub-section (1) in such a case if any other shareholder applies for leave to buy at a valuation of the share or shares of the party or parties asking for sale the court shall order a valuation and shall offer to sell the same to such shareholder at the price so ascertained. Under Sub-section (2) if one or more shareholders also apply for leave to buy as provided u/s (1), court shall offer sale to the share or shares who offers to pay the highest price above the valuation made by the court. Therefore when there is no request for a sale by any shareholder interested individually or collectively to the extent of one moiety or upwards as provided u/s 2 court cannot direct a sale. In that case no other sharer can apply for leave to buy as provided u/s 3. Hence Section 3 cannot be invoked in a case where there is no request for a sale as provided u/s 2. In such a case court cannot invoke the provisions of Act and direct a sale either public or among the sharers.

9. Admittedly in this case no request was made by any shareholder interested individually or collectively to the extent of one moiety or upwards is provided u/s 2. Naturally Section 3 has no application and no other to purchase the other shares. It is based on the report submitted by the Commissioner disclosing that it is not feasible or possible to divide the decree schedule property having an extent of 15 cents, into 26 equal shares court found that property cannot be divided. It is admitted that major portion of the property is occupied by the residential house and the remaining portion is its appurtenant land. Learned Sub Judge rightly found that the property cannot be divided equally. This factual finding was not disputed by any of the parties. It is in such circumstances the learned Sub Judge directed sale of the property among the sharers. That order was made in a case where the provisions of Section 2 or 3 cannot be applied.

10. Then the question is whether dehors of the provisions of the court is competent to direct sale of the property found to be available for partition and independent of the provisions of the court has the inherent power to direct division of the property in an equitable just and fair mode by ordering sale. This aspect came up for consideration in Raj Goomari Dasi v. Gopal Chander Bose ILR 3 Calcutta 514. In that case, decree directed partition of family dwelling house with appurtenant land including a poojah dalan and courtyard adjoining it. The amin to whom the duty of partition of the property was entrusted, at the request of two out of three co-parceners, did not divide the poojah dalan and the court yard. The court inspite of the objection by the third co-parcener directed that property should remain undivided. When that was challenged, White J. held that having regard to the form of the decree, it was not open to the court executing it to order that any party of the property should remain joint, except with the sanction of all the coparceners. On that basis it was directed that two items left undivided be valued and if any one or two or the co-parceners wish to retain the same separately or jointly as part of his or their share, proportionate share of its value be paid to the remaining co-parcener or coparceners and if none of them agree to take the same as part of their share, the items should be divided between the co-parceners. Thus the court recognized the principle that in a case where there are many items to be divided and one of the items cannot conveniently be divided, it can be allotted to one of the sharers and the sharer to whom it is allotted can be made to compensate the other sharer in money value.

11. In Assanullah v. Kali Kinkar ILR Cal. 675 the disputed properties consisted of none houses. Plaintiff had two shares and defendant one share. The lower appellate court held that as plaintiff wanted partition, compensation might be paid to him in lieu of his share. The High Court set aside the finding and directed division of the property. Field J. held that where the effect of partition would result in destruction of intrinsic value of the whole property or of the shares, court would pay to the plaintiff compensation to his share instead of division of the property.

12. Calcutta High Court in Dabendra Nath Bhattacharjee v. Hari Das Bhattacharjee 15 C.W.N. 52 rejected the plea that the property is to be allotted to the plaintiff who was in possession of the property at the time of institution of the suit, holding that property course is to direct sale of the property among co-sharers and property should be given to that shareholder who offers to pay the highest price above the valuation made by the court. It was held that it is the elementary principle that in cases of partition where several persons are co-owners or co-sharers of immovable property, partition should be affected between them by giving to each his share in specie as far as practicable and the right of each sharer is to his slice of the property, not merely its money value. Finding that parties have not chosen to follow the procedure provided under the it was held:

In the case before us, both the parties are agreed that nature of the property is such that a division thereof amongst all the shareholders cannot reasonable or conveniently be made. The proper course, therefore, to follow, is to direct a sale of the property among the co-sharers and it should be given to that shareholder who offers to pay the highest price above the valuation made by the court. The defendant cannot, in our opinion, be compelled to transfer his share at a valuation to the plaintiff, merely because the latter happened to have possession of the property at the time when they commenced the present application.

A Division Bench of the High Court of Allahabad in L. Ram Prasad Vs. Mt. Mukandi and Another, holding that in that case request made by the plaintiff who is a two third sharer, was that sale may be held and whoever among the co-sharers offers the highest bid by be given the property and so it does not contemplate a sale at which any outsider could bid. On the facts it was held:

If such a request is treated as a request u/s 2, it is apparent from Section 3, Partition Act, that if the shareholder of a smaller interest chooses be can ask for leave to buy the property at a valuation by the Court, and if he does not do so, then the property is to be sold under the provision of Section 6 of Partition Act, when the plaintiff can bid for the property to ensure that a proper price is obtained for the property at that sale. In our opinion, the Partition Act must be construed strictly as the provisions of the, especially Section 3, exclude the right of the majority shareholder to acquire that property the subject of partition at the opinion of the minority shareholder.

It was finally held that the provisions of Partition Act did not apply to the facts of the case. Therefore decree of the trial court was set aside and suit was remanded directing to hold sale of the property among the sharers directing that property should be given to that shareholder who offers to pay the highest price above the valuation made by the court. The Division Bench in that case directed sale of the property in between the sharers even though it was found that provisions of the is not applicable.

13. A single Judge of High Court of Calcutta in Mohit Krishna Kundu Vs. Pranab Chandra Ghose and Others, had taken a divergent view in that case it was found that there was no request by a co-sharer interested to the extent of one moiety or upwards for sale of the property and so Act has no application. It was held that when nature of the property is such that a division thereof amongst all the shareholders cannot reasonably or conveniently be made and parties agreed that no division could be made, court has to adopt the mode laid down in Debendranath Bhattacharjees case (supra) referred to earlier.

14. Chief Justice Subba Rao in Ramaprasada Raos case dealt with power of the court to direct sale of the property when provisions of Act is not applicable. Speaking for the Division Bench it was held that Act was designed only to meet a particular contingency and did not in any way affect power of the court to make in equitable distribution of the properties and before the court could refuse to order sale of the property, even if conditions laid down in Section 3 were fully satisfied and instead of selling property when it is not capable of equitable division it could have been allotted to one of the sharers whether he is a smaller or larger sharer and direct compensation to be paid to the other sharer or sharers. But, after the if conditions laid down therein are satisfied, court has no option but to direct the sale. Holding that partition is the legal process by which joint title and possession of co-owners of the entire joint property is converted into separate title and possession of each of the co-owners in respect of specific item or items and the joint property is divided in specie and each one of the erstwhile joint owners is put in possession of specific extent of the property which is allotted to his share, it was held that but many contingencies may be visualised when in practice division by metes and bounds of every item of joint family property is not possible. It was held:

A joint family of joint owners may be possessed of innumerable items of different extents, value, qualify and nature. In dividing the properties among the various co-owners, it may not always be possible to divide every item into distinct shares. A property will have to be allotted to one of the sharers and the other has to be compensated with money. This is technically called owelty. Some times, the property to be divided may consist of only one item, which cannot conveniently and equitably be divided between the members in which case the Court may allot that item to one co-sharer and direct him to pay the value of the share of the other sharer in money.

A court may also be confronted with a situation, namely, that the item of property is not capable of physical partition or is such that, if divided, it will lose its -intrinsic worth, in such a case, that item is allotted to one and compensation in money value is given to the other and if such a course is not possible it is sold outright and the sale proceeds divided between the joint owners. All the aforesaid and similar other methods are adopted by courts in making an equitable partition of the joint properties either with the consent of the parties or where such consent is not forthcoming, in exercise of its own discretion. Whatever method is adopted, it is only to implement the process of equitable partition. It would well-nigh be impossible for a court to effectuate a partition on an equitable basis, if it should be held that it is under a legal obligation to divide every item of the joint property in specie. Where it is not, it adopts one or other of the alternative methods narrated above.

The provisions of the Partition Act do not, in any entrench upon the undoubted power of the court to effectuate a partition between the co-owners in one or other of the methods suggested above. Before the, a party had no right to insist upon the court to follow a particular course in the process of partition or to insist upon purchasing the share of the other co-owner under certain circumstances.

(emphasis supplied)

The said decision was approved by the Apex Court in Badri Narain Prasad Choudharys case (supra) as follows:

The suit property, being incapable of division in specie, there is no alternative but to resort to the process called owelty, according to which, the rights and interests of the parties in the property will be separated, only by allowing one of them to retain the whole of the suit property on payment of just compensation to the other. As rightly pointed out by K. Subba Rao, C.J. (speaking for a Division Bench of Andhra High Court in AIR 1958 AP 647 [LQ/TelHC/1957/99] ), in cases not covered by Sections 2 and 3 of the Partition Act, the power of the Court to partition property by any equitable method is not affected by the said Act.

A learned single Judge of this Court in Sreedharan v. Bhaskaran 1963 KIT 692 following the decision of Chief Justice Subba Rao in Ramaprasada Raos case (supra) held that Act is not inconsistent with the general power of the court to sell any item of property for its equitable distribution. Another single Judge in Anthony Ammal v. Antony 1983 KLT 645 considered the very question whether court dehors the provisions of Act has power to order sale. It was held that it cannot be said that Court has no power to direct sale of the property involved in a suit for partition and distribution of sale proceeds among the sharers even if the conditions insisted by Section 2 of theis not satisfied. The learned single Judge held:

What the Court has to see is that there is a just partition. In all cases where the property, or properties, is incapable of partition by metes and bounds, the Court is not without powers to resort to a feasible method just and equitable in the circumstances of the case. The Partition Act does not take away this power the Court has.

A Division Bench of this Court in Parangodan v. Lakshmikutty 1993(2) KLT 33 followed the said decision and held that "what the court has to see is that there is a just properties, is incapable of partition by metes and bounds, court is not without powers to resort to a feasible method just and equitable in the circumstances of the case and the Partition Act does not take away this power".

15. Facts in Krishnan v. Narayanan 2002 (3) KLT 165 shows that it was a final decree. Defendants 6 and 7 were entitled to 2/56 shares. A Commission was appointed to divide the property. Commissioner submitted report dividing the property into 7 plots and allotting them to the respective sharers. Plaintiff then filed an application as contemplated u/s 2 of the requesting the court to sell the property in public auction. Defendant No. 2 filed an application seeking permission to purchase the shares of the other sharers as provided u/s 3 of the. On the facts learned single Judge without discussing the case law held that Act does not take away the power of the court to have an equitable partition of the property and held that when a petition is filed for public auction u/s 2, though it as dismissed by the trial court intention of the parties have been expressed before the court that property can be sold and proceeds can be divided among the sharers. In such circumstance, the learned single Judge held:

The purpose behind S3 is to prevent the property falling into the hands of third parties. The evidence on record show that the appellant is residing in the building. The parties are close relatives. Considering the circumstances, I feel that it is only just and proper to allow the appellant to purchase the shares of the other sharers for the value addressed by the court.

Learned single Judge had not analysed the effect of Section 2 and 3 of theor the power of the Court not to proceed as provided u/s 3 if it is a case where there was a request as provided u/s 2 and also an application to buy the share as provided u/s 3 of the was filed. With due respect to the learned single Judge, if Section 2 and 3 of theapplies, curt has no option or power to proceed except as provided u/s 3. As stated earlier when it appears to the court that an equitable partition of the property cannot be made and a request is made by one or more shareholder or shareholders interested individually or collectively to the extent of one moiety or upwards for sale of the property and distribution of the proceeds and any of the other sharer or sharers apply for leave to buy the share of that party who requested for sale, court is bound to proceed as provided u/s 3 and has to offer to sell the property on the valuation to be made by the court. If in that case another sharer also applies for leave, then the property has to be offered for sale to that sharer who is prepared to pay the highest above the valuation made by the Court. So, if Section 2 and 3 applies, Court can only proceed as provided thereunder and cannot proceed outside the provisions of the or allot the property to one sharer with a direction to compensate the others by owelty.

16. The legal position can thus be summed up as follows:

1) In a suit for partition, if it appears to the court for the reasons stated in Section 2 of the Partition Act that a division of the property cannot reasonably and conveniently be made and that a sale of the property would be more beneficial to all the sharers court has to direct sale. The sale so contemplated is definitely a public sale. But the order for sale can be made only on the request of the shareholders interested individually or collectively to the extent of one moiety or upwards.

2) When such a request is made to the court to direct a sale, any other shareholder or shareholders can apply u/s 3 of the for leave of the court to buy the share of the party asking for sale, at a valuation. In such a case court has to order valuation of the share of the party asking for sale.

3) If such a valuation is made, Court has to offer to sell the share of the party asking for sale to the shareholder applying for leave to buy under Sub-section 2 of Section 3.

4) If two or more shareholders apply for leave to buy, then Court is bound to order sale of the share or shares to the shareholder who offers to pay the highest price above the valuation made by the court.

5) If no shareholder is willing to buy such share or shares at the price, the application filed u/s 3 of the is to be dismissed.

6) If there is no request as provided u/s 2 of the for sale of the property by a shareholder or shareholders interested individually or collectively to the extent of one moiety or upwards, Section 3 cannot have any application.

7) If Section 2 and 3 of thehas no application, partition is to be effected dehors of the provisions of the Partition Act.

8) In such a case, if all the shareholders agree or the court finds that suit property is incapable of division in specie, it is for the court to devise the most appropriate and suitable methods which is beneficial for all the shareholders for a just and fair division of the property. The court has the inherent power to devise the most suitable means. Court can allot the property to one share with a direction to pay owelty to the other a sale of the property among the sharers or public and divide the sale proceeds among the sharers, depending on the facts and circumstances of each case. It cannot be said that in no case there cannot be a sale of the property among the sharers or a public sale. What is the best mode of division in such a case is to be decided by the court on the facts of that case. Whatever be the course so adopted, it must be the most beneficial to all the sharers. It is not the interest of that shareholder in possession of the property is to be looked into but the interest of all the shareholders.

17. The argument of the learned senior counsel appearing for petitioners relying on the decision of the Apex Court in Badri Narain Prasad Choudharys case (supra) is that sale of the property by auction in between the sharers is not a just and proper method especially when all the other sharers could join together and outbid a deserving sharer who is not financially sound to purchase the property. Reliance was placed on the following observations:

Although the value of the property could be fixed by auction between the two parties, we feel that this method would be unsatisfactory in this case as plaintiffs who own the major share and have unlimited resources, would outbid the defendant. In the circumstances, we think that the more equitable method would be to take the value of the property as Rs. 50,000/- in 1963 and allow a reasonable increase for the rise in price since 1963 to this date, taking into account the rise in price in the locality, and give the defendant the first option to retain the whole property on payment of 13/16 share of that valuation (including the increase) to the plaintiffs within a period of three months or such further period that may be granted by the Court of first instance.

18. In the case on the facts Their Lordships found that provisions of Section 2 and 3 do not apply. Following the views of Chief Justice Subba Rao in AIR 1958 Andhra Pradesh 647, it was found that in cases not covered by Sections 2 and 3 of thepower of the court to partition the property by any equitable method is not affected by the. The facts of that case reveal that defendant, to whom the property was directed to be allotted, was originally a monthly tenant occupying the premises and he later purchased 2/16 shares. Plaintiffs, the other shareholders filed the suit for partition! It was found that there was no request by any of the shareholders interested or collectively to the extent of one moiety or upwards for sale of the property and distribution of the sale proceeds and therefore Section 2 and 3 have no application. On the facts, it was found that plaintiffs have the wherewithal and unlimited resources compared to the defendant who was only a monthly tenant, who later the property between the two parties in that case will not be a proper method. It cannot be said that Supreme Court has laid down a principle in Badri Narains Case (supra) that where Section 2 and 3 of thedo not apply, court has no power to auction the property in between the sharers. Court has the power to devise the just and proper method of division. As stated earlier, dehors of the court has the inherent power and duty to devise any equitable method for just and fair division of the properties between the shareholders. The fact that one sharer is occupying the building by itself is not sufficient reason to allot that property to him with a direction to pay owelty to the remaining sharers. May be, on the facts and circumstances of a particular case, that would be the most proper, just and fair mode of division. While devising the most equitable just and fair method, dehors of the provisions of the, Court is competent to direct allotment of the property to one sharer on a valuation to be made by the court directing to pay the owelty amount to the remaining sharers. But it cannot be said that that is the only mode of fair, just and equitable division.

19. On this legal principle, it is to be seen whether learned Sub Judge was justified in directing auction of the property in between the sharers. Though learned senior counsel vehemently argued that defendants 5 to 8 together are only entitled to get 1/26 shares other sharers together could outbid them, as it clear from Ext.P1 to P3 orders of the learned Sub Judger, all the other sharers have joined together at the time of auction conducted by the court. But it cannot be said for that reason that other sharers could definitely outbid the petitioners, Learned senior counsel argued that petitioners who were residing in the property for more than 60 years have a sentimental value for the residential building where they have been uninterruptedly residing and if the property is to be sold in auction, though among the sharers, ultimately it would be sold to a stranger and as far as possible, it is to be voided. Learned senior counsel also argued that though 5th defendant owned a building, that building has given to her daughter the 6th defendant and 7th defendant is not having any house of his own and in such circumstance, learned Sub Judge should have directed valuation of the property and allotted the entire property to defendants 5 to 8 with a direction to pay owelty to the other sharers. Learned senior counsel also argued that when 25 sharers joined together, they would definitely have unlimited resources to purchase the property and auction among them will not be just and therefore sale by auction among the sharers cannot be just, fair or equitable.

20. Learned Counsel appearing for respondents argued that there was no case before the trial court or in the Writ Petition that respondents have unlimited resourses or that they would outbid the petitioners. It was argued that in the absence of such a case argument advanced by the learned senior counsel has to be rejected. Learned Counsel also argued that when petitioners sought reservation of the property in their favour before the trial court, it was resisted by the plaintiffs and other sharers stating that 5th defendant is owning a double storied residential building, which was disputed by defendants 5 to 8. It was pointed out that it is under such circumstance under Ext.P1 order learned Sub Judge on 4.12.2006 directed defendants 5 to 8 to produce the title deed in respect of that property to find out whether defendants 5 to 8 are owning and possessing a double storied residential building making it clear that on their failure to produce the same, property would be auctioned among the sharers as it is admitted case that it cannot be divided equally among the 26 sharers. Learned Counsel pointed out that the said direction was given because of the insistence of defendants 5 to 8 to allot the property to them contending that they are residing therein and have no other residential building. Learned Counsel also argued that inspite of the direction, petitioners did not produce the title deed and on 16.12.2006 learned Sub Judge directed sale of the property and sale was conducted in open court on 10.1.2007. It is further pointed out that petitioners did not challenge Exts.P1 to P3 orders and instead participated in the auction and bid the property for Rs. 49,50,000/- and only when the other sharers bid the property for Rs. 50 lakhs, they had withdrawn from the auction and in such circumstance, petitioners cannot be heard to contend that they have no sufficient resources to participate in the bid or that respondents together could outbid the petitioners and therefore the principle adopted by the Apex Court in Badri Narains case cannot be applied in this case. Learned Counsel also submitted that pursuant to Ext.P1 order the other sharers have already deposited the amount in court and in such circumstance, petitioners are not entitled to any discretionary relief invoking the powers under Article 227 of the Constitution of India.

21. The facts revealed from the proceedings of the court below and admitted by the parties establish that defendants 5 to 8 participated in the auction and bid the property upto Rs. 49,50,000/-. In such circumstance, it cannot be said that compared to respondents, defendants 5 to 8 are not having sufficient financial resources. As pointed out by the learned Counsel appearing for respondents, Writ Petition itself establish that 5th defendant is owning a double storied residential building, which according to her was given to her daughter the sixth defendant. Defendants 7 and 8 are working in Gulf countries. In such circumstances, there is no merit in the submission that petitioners have no financial resources to bid the property or that other sharers could outbid them and so the auction among the sharers is not just or fair. When defendants 5 to 8 are having the financial resources and are also having a double storied residential building in Kozhikode, the same city, it cannot be said that in equity the property is to be allotted to them. On the facts and circumstances of the case, it cannot be said that exercise of discretion by the learned Sub Judge directing sale of the property among the sharers by auction is not an equitable or just or fair method of dividing the property. On the other hand, when auction is conducted among the sharers and that too when the sharers are having the necessary financial resources, property would definitely fetch the maximum price which will be beneficial to each of the shareholder. If the property is to be allotted exclusively to defendants 5 to 8 with a direction to pay the owelty to others, it would only benefit defendants 5 to 8 who have another convenient residential accommodation in the same City. It will only benefit one shareholder out of 26 shareholders. But if the property is to be auctioned among the shearers, it would definitely benefit all the 26 sharers. In such circumstances, learned Sub Judge was justified in directing sale of the property by auction among the sharers under Exts.P1 to P3 orders. Ext.P3 order shows that by such auction the property was sold for Rs. 50 lakhs. Each sharer is entitled to get 1/26 share out of that amount. In such circumstance, I find no merit in the Writ Petition warranting interference.

Writ Petition is dismissed.

Advocate List
For Petitioner
  • Govind K. Bharathan
  • Sarvothaman and Prabin Babu
For Respondent
  • ; C.P. Mohammed Nias
  • A. Sudhi Vasudevan
  • Jojo Varghese
  • S. Sheeja Kumar and A. Sudhi Vasudevan
Bench
  • HON'BLE JUSTICE M. SASIDHARAN NAMBIAR, J
Eq Citations
  • 2008 (4) KLT 401
  • ILR 2008 (3) KERALA 569
  • LQ/KerHC/2008/377
Head Note

Partition Act, 1893 — Applicability — Equitable distribution — Power of Court — If the provisions of Section 2 and 3 are not applicable and division cannot conveniently and equitably be made, partition has to be effected dehors the Act — Court has the inherent power to adopt a suitable mode of distribution which is equitable, just and fair to all the shareholders — Property can be allotted to one of the sharers with a direction to pay compensation to others by owelty or by sale of the property among the sharers or by public auction and dividing the sale proceeds — Court has to devise the most beneficial mode of division in the given circumstances — Best mode of division in each case depends on the facts of that case — Final decision of what is the best mode of division has to be taken by the Court after considering the totality of the circumstances and the interest of all the shareholders — In the instant case, Court directed auction of the property among the sharers which was opposed by the petitioners — Only reason given by the petitioners was that they were residing in the property for more than 60 years and that they might be outbid by other shareholders — Held, not a sufficient reason — Petitioners were in possession of other accommodations and they could have bid the property up to the highest price — Auction by itself is not a bad method of division — Auction conducted among the sharers would definitely fetch the maximum price which will be beneficial to all the shareholders — Held, no reason to interfere with the order of the Court directing auction of the property among the sharers — Writ petition dismissed.