PRAN SINGH Vs. JANARDAN SINGH

JUDGEMENT

(1.) This appeal is directed against an order by which the Court below has dismissed an application of the judgment-debtor to set aside a sale of six properties in execution of a mortgage-decree. The decree was made by this Court on the 2nd December 1908, in affirmance of the decree of the original Court, dated the 29th June 1907. The first application for execution was made on the 28th March 1908, on the basis of the decree of the Court of first instance, even before it had been confirmed by this Court. That application was dismissed for default on the 15th September 1908. The second application was presented on the 6th February 1909. The sale was proclaimed and for five of the properties the decree-holder was the highest bidder at the sale which took place from the 15th to the 18th March 1909. Before the sale could be completed, however, the decree-holder withdrew on the ground recorded in the bid-sheet and signed by his Pleader that "the decree-holder does not want to get the properties sold fearing irregularity". The execution proceeding consequently fell through. On the 21st September 1909, the decree-holder made the third application for execution. In the course of the proceedings so instituted, the Subordinate Judge, on the 11th October 1909, determined the upset values of the six properties under Order XXI, Rule 66, Sub-rule 2(e), of the Code of 1908. The judgment-debtors were represented at this summary inquiry and protested against the values suggested by the decree-holder as too low; in fact, they were in some cases lower than the prices offered by the decree-holder himself at the sale held in March 1909. The objection of the judgment-debtors was, however, not heeded, and the sale- proclamation was ordered to issue with the statement of values as suggested by the decree- holder on the basis of the Road-Cess Returns. An appeal to this Court against that order was dismissed on the 13th December 1909. The sale took place on the 21st and 22nd February 1910. The decree-holder was granted leave to bid at the sale "on fair price". At the sale, the decree-holder offered bids through his Pleader, and his principal contestant was one Ram Charan Bajpai. In the case of the first property, the Pleader for the decree-holder does not appear to have offered any bid, and the contest was limited to Ram Charan and four other persons. In the case of the fourth property, one Dilkeswar Singh appears to have offered two bids at an early stage, but he retired from the contest later on. On the face of the papers, therefore, excepting the case of the first property, the contest was between the decree-holder and Ram Charn, Ram Charn succeeded in purchasing all the properties, and on the 25th February 1910, his bids were accepted and the payment of the balance of the purchase-money sanctioned. On the 8th March 1910, however, Ram Charn appeared and stated that he had made the purchase for one Askaran Baid who also appeared and prayed for leave to deposit the balance of the purchase-money. The application was granted, and certificate of sale was directed to be delivered to Askaran Baid. On the 2lst March 1910, the judgment-debtors applied to have the sale set aside under Rule 90 of Order XXI of the Code of 1908. Various objections were taken to the validity of the sale, the substance of which was that the decree- holder had himself purchased the properties benami for a grossly inadequate price, and, with a view to enable him to do so, had committed fraud and various irregularities. One of the irregularities mentioned was that the decree-holder had deliberately undervalued the properties for the purposes of the execution-sale: another was that the sale proclamation had not been duly served, and a third objection was that the sale had been irregularly adjourned without specification of the hour at which the sale was to take place. The Subordinate Judge, on the 18th August 1910, overruled all the objections urged before him and confirmed the sale. The present appeal was lodged by the judgment-debtors on the 21st September 1910, and has been contested by the decree-holder who has on the 4th November 1910, taken a conveyance from Askaran Baid; the conveyance states, we are informed, that the consideration is Rs. 1,500 in excess of the price paid at the sale. On behalf of the appellants, the validity of the sale has been impeached on several grounds, of which two may be considered as specially important, namely, first, that the properties were deliberately undervalued by the decree-holder for the purposes of the sale proclamation, that he himself has thereby succeeded in purchasing the properties for a grossly inadequate sum, and that he misled the Court by setting up a fictitious bidder to indicate that there was a keen contest and the purchase was made by a stranger, whereas there was, as a matter of fact, no contest at all, and the properties were taken by the decree-holder in the name of the fictitious bidder; and secondly, that the adjournment of the sale on the 21st February, without specification of the hour at which the sale was to take place the next day, was a material irregularity calculated to mislead intending bidders.

(2.) In so far as the first of these contentions is concerned, there can, in our opinion, be no room for doubt that the decree-holder was the real purchaser at the execution-sale impeached by the judgment-debtors. It is not disputed that Ram Charan Bajpai, who was present at the sale, successfully offered the bids and deposited the earnest-money, was not the real purchaser; that is the common case of both the parties; who then was the real purchaser? The decree-holder asserts that it was Askaran Baid, who purchased the properties and paid for them. The judgment-debtors assert, on the other hand, that he is quite as much a shadow as Ram Charan Bajpai, and that both are persons set up by the decree-holder to enable him to seize properties of considerable value at the smallest possible price. This Askaran Baid, has not taken the remotest interest in the present proceedings, and has made no endeavour to sustain the validity of the sale; though he was a party to the proceedings, and though the judgment-debtors repeatedly asserted that he was not the real purchaser, he has not even come forward to pledge his oath in support of the allegation that he was the person beneficially interested. Nor has any plausible explanation been attempted as to why Askaran Baid, who had on the 22nd February 1910 purchased the properties for one lac, six hundred rupees after an apparently keen contest with the decree-holder, should on the 4th November 1910, transfer the properties to the decree-holder for a nominal profit of Rs. 1,500. This sum would not cover even a small fraction of interest on the purchase-money for the interval at the current rate, whether that rate be taken to be twelve per cent, or six per cent, per annum. In our opinion, the surrounding circumstances are conclusive that it is the decree-holder who was the real purchaser at the execution-sale, and this aspect of the matter has, indeed, not been seriously controverted in this Court. The position is materially strengthened, when we examine the antecedent proceedings. In the second execution, proceedings, as we have already stated, the decree-holder had openly offered the highest bid in the case of each of the five properties sold on that occasion. We tabulate below the values mentioned by the decree-holder in the sal6 proclamation then issued, and the bids offered by him at the sale. (The properties are numbered as in the present proceeding),-

(3.) The bidder who principally entered into a contest with the decree-holder on that occasion, was one Dilkeswar Singh, who is said to be a relation of one of the judgment-debtors. On behalf of the respondents, it has been suggested in this Court that the decree-holder withdrew his bids when he discovered that Dilkeswar was a puffer set up by the judgment-debtors. There is no foundation whatever for this suggestion. In the first place, the ground then assigned by the decree-holder for not adhering to his bids in that proceeding was that he was afraid of irregularity. The suggestion now made that he had been misled by Dilkeswar is clearly an afterthought. In the second place, the decree-holder does not come into Court to pledge his oath in support of the theory he now sets up. In the third place, the theory itself is futile and will not bear examination for a moment. The decree-holder was not a stranger to the properties; he had accepted them as security for the money advanced by him, and when he did so, he may be assumed, like any reasonably prudent man, to have made an estimate of their value. He had deliberately caused to be inserted in the sale proclamation what, he thought, was the proper value of the properties. We are, therefore, not prepared to adopt the suggestion now made, but not supported by any evidence, that, because the decree-holder imagined Dilkeswar Singh to be a real bidder, be indiscreetly offered bids to the extent of Rs. 32, 100, Rs. 32,100 and Rs. 17,000 for properties valued by himself in the sale-proclamation at Rs. 5,000, Rs. 8,500, and Rs. 8,000 respectively. In our opinion, the bids offered by the decree-holder at the sale held from the 15th to the 18th March 1909, furnish strong evidence as against him as to the minimum value of the properties, and the presumption is not rebutted by an idle explanation, not 6ven remotely suggested at the time but invented subsequently. The learned Vakil for the appellants has suggested a possible explanation as to why the decree-holder withdrew from the bids before their acceptance. It is not necessary for us to speculate as to his real motives, but the theory looks plausible that if Dilkeswar had no money for purchase of i the properties, and if the decree-holder discovered it before the acceptance of his bids, he may have repented that he had offered such high bids and have at once decided to withdraw, with a view to take his chance and capture the properties on more favourable terms on a future occasion. But, as we have said, it is needless to find out the true motive which guided the conduct of the decree-holder on that occasion. The fact temains that he deliberately offered to take the properties at certain prices and that the explanation he has now suggested with a view to nullify the effect of this evidence, is wholly inadequate.