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PETITIONER: BADRI NARAIN CHOUDHARY & ORS.

       Vs.

RESPONDENT: NILRATAN SARKAR

DATE OF JUDGMENT10/03/1978

BENCH: SARKARIA, RANJIT SINGH BENCH: SARKARIA, RANJIT SINGH KAILASAM, P.S.

CITATION:  1978 AIR  845            1978 SCR  (3) 467  1978 SCC  (3)  30

ACT: Partition Act, 1893 Ss. 2 and 3, scope of-Interpretation  of the  pleadings Equity jurisdiction of the  Courts-Powers  of Court dehors provisions of Act.

HEADNOTE: In a suit for partition of the suit property, which was very small  in dimension measuring .013 acres only filed  by  the plaintiff’s-appellants,  the  trial Court  by  its  judgment dated  14-8-1961  decreed  the suit and  in  doing  so  took recourse  to the provisions of S. 3 (2) of the  Partition  A 1893 as could not be con. veniently partitioned.  The  trial judge  fixed  the  valuation of the  suit  premises  at  Rs. 11,250/-  and  directed.   "that  the  suit  premises  being incapable  of  partition shall be put to  sale  between  the plaintiffs and the defendant, and the same shall be sold  to that  party  who offers to pay the highest price  above  the valuation  of Rs. 11,250/-".  Since the highest bid  in  the last  auction  held  by  the Court in  June  1965,  was  Rs. 50,000’/-  and by the plaintiffs the defendant was given  an option  to purchase the property at that price  and  deposit the  sale  money by July 1965.  On his  failure,  the  Court accepted  the highest bid of the plaintiffs.  Accepting  the defendant-respondent’s  appeal,  the High Court,  held,  "by making  the  averments  in paragraphs 8 and  10(c)  of  this plaint,  the plaintiffs have clearly made out a case  to  be dealt with u/s. 2 of the Act", and therefore, equity had  to be worked out between the parties by allowing the  defendant who  was residing in the 1st floor and having a shop in  the ground  floor to purchase the share of the plaintiffs  under the provisions of S. 3 (1)  r/w S. 2 of the Act.  Taking Rs. 11,250/-  as the price of the whole property in  suit  which was  the valuation fixed by the trial Court. the High  Court worked  out  the  value of the  plaintiffs’  share as  Rs. 9,000/-,  and  that  of the defendant  as  Rs.  2,250/-  and further  directed that the defendant be allowed to  purchase the plaintiffs’ share in the suit property. Allowing the appeal by special leave and remitting the  case to the trial Court, the Court HELD  :  1. Under s. 3 r/w S. 2 of the  Partition  Act,  the Court can exercise the power u/s 3; y(i) there is a  request of  any  of  the  shareholders  interested  individually  or

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collectively  to  the extent of one moiety or  upwards,  for sale  of  the  property and its  distribution  and  (ii)  it reaches  an  opinion  that by reason of the  nature  of  the property  or  the  number of shareholders  or  some  special circumstances, a division of the property cannot  reasonably or conveniently be made and that a sale of the property, and distribution  of the proceeds would be more  beneficial  for all the shareholders.  From the word "may" it is clear  that even  when both the conditions are satisfied, the Court  has discretion  to  direct  ,or  not to direct  a  sale  of  the property  and  distribution of the  proceeds.   The  request contemplated is a sine qua non for directing a sale  because such a request necessarily signified his willingness to have his share converted into money so that the co-shares may, by means of the procedure provided in S. 3, buy them out.   The request  for sale envisaged by s. 2 must be one  for  public sale.   If no such request has been made to ’the Court s.  3 cannot be brought into operation. In  the  instant  case, it is  clear  from  pleadings,  that neither  in  substance nor in form any  request  within  the purview  of  s 2 had been made by any of  the  parties  (co- shares).  That condition precedent for invoking s. 3 (1) was larking  The provisions of Ss. 2 and 3 of the Partition  Act are  therefore not applicable to the peculiar  circumstances of the case. [470 F-H, 471 A-B, F-G] 2.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 468 the  said Act.  In a situation where it is found as a  fact, that  the  suit  property  is so small  that  it  cannot  be conveniently and reasonably partitioned by nietes and bounds without destroying its intrinsic worth, the Court can devies such  other feasible method for affecting partition  as  may appear to it to be just and equitable, in the  circumstances of  the case.  In the instant case the suit proparty,  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 such  compensation to the other as may be a just equivalent of his share.  [471 G-H, 472 A-B) Ram  Prasada  Rao  v.  Subramanian,  A.I.R.  1958  A.P.  647 approved. [The Court observing, that a more equitable method would  be to take the value of the property as Rs. 50,000/- which  was the  highest bid in 1963 and to allow a reasonable  increase for  the rise in price, since 1963 upto this date,  directed the  Trial Court to dispose of the case in  conformity  with its observations after hearing the parties and after  taking such  further evidence as may be required preferably  within three months from the date of its order]

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil,Appeal  No.  2388  of 1968. (Appeal  by Special Leave from the Judgment and  Decree  dt. 20-3-1967  of the Patna High Court in First Appeal No.  488, of 1961) Lal  Narain  Sinha,  F.  C.  Nariman,  S.  C.  Aggarwala   & Aruneshwar Gupta For the Appellants A. B. N. Sinha, S. N. Prasad for the Respondent

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The Judgment of the Court was delivered by SARKARIA,  J.-This  appeal  by special  leave,  is  directed against a judgment, dated March 20, 1967, of the High  Court of Judicature at Patna.  It arises from these circumstances: The  defendant  respondent  purchased  3/16  share  for  Rs. 2,250/in  the suit premises by a sale deed, dated March  25, 1957.   Before  this  sale, the respondent  was  already  in occupation of the premises as a tenant paying a monthly rent of Rs. 53/-, inclusive of water-tax, to the then proprietor. The  plaintiffs-appellants, who, at the material time,  were members  of a joint Hindu family governed by Mtakshara  Law, purchased the remaining 13/16 share in the suit premises for Rs.  9,000/-  by a sale deed, dated April  27,  1957.   They already owned and possessed a parcel of land adjacent to the suit premises and they intended to open a market there after amalgamating.  the  same  with  their  share  in  the   suit premises.   They  asked  the  respondent  to  partition  and separate  their  share.   The  respondent  did  not   agree. Therefore,  on August 8, 1959, on the preceding  facts,  the appellants,  instituted  the  suit  (No.  64  of  1959)  for partition of the suit property, in the Court of the Subordi- nate Judge, First Court, Patna. In the plaint, it was inter alia alleged that since the suit property, was of very small dimensions, measuring .013  acre only,  and  its  partition  by  metes  and  bounds  was  not feasible.  The plaint also contained’ 469 a  proposal from the plaintiffs to purchase the  defendant’s share  in  the suit premises at a price which  may  be  held reasonable and proper by the Court. The  defendant resisted the suit.  He pleaded that he was  a permanent tenant in the suit premises and not a tenant  from month  to month; that the plaintiffs had purchased only  the right  to receive their proportionate share of  the  monthly rent, to the extent of Rs. 39/-, but they were not  entitled to  claim partition.  An alternative proposal was made  that the defendant was willing to buy the share and rights of the plaintiffs on a valuation that may be fixed by the Court. The Subordinate Judge by his judgment dated August 14, 1961, decreed  the suit and in doing so, held that  the  defendant was not a permanent tenant but a tenant from month to  month only, that the dimensions and the area of the suit  premises being  very small, it could not be conveniently  partitioned and therefore, it was necessary to have recourse to  Section 3(2) of the Partition Act, 1893.  He fixed the valuation  of the  suit  premises at Rs.11,250/- and  director  "that  the ’suit premises being incapable of partition shall be put  to sale between the plaintiffs and the defendant, and the  same shall  be sold to that party who offers to pay  the  highest price above the valuation made by me". According,  the  suit  property  was  repeatedly   auctioned between the parties.  The first was herd in September  1963, the  highest  bid was offered by the plaintiffs.   The  last auction  was  held in June 1965, the highest bid  being  Rs. 50,000/- offered by the plaintiffs.  The defendant was given the  option  to  purchase the property  at  that  price  and deposit  the  sale money by July 19,  1965.   The  defendant failed  to do so.  The Court thereon ordered that "the  next highest bid of the plaintiffs to the extent of Rs.  50,000/- is accepted". Against  the  decree  of  the  Trial  Court,  the  defendant preferred  an appeal to the High Court.  The Division  Bench who  heard this appeal held that by making the averments  in paragraphs  8 and 10(c) of the plaint, "the plaintiffs  have clearly made out a case to be dealt with under Section 2  of

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the Act," and therefore, equity had to be worked out between the parties by allowing the defendant to purchase the  share of  the  plaintiffs under the provisions of  Section  3‘(1), read  with Section 2 of the Act.  Taking Rs. 11,250  as  the price of the whole property in suit which was the  valuation fixed by the Trial Court-the High Court worked out the value of  the plaintiffs’ share as Rs. 9,000/-, and that.  of  the defendant’s  share as Rs. 2,250/- and further directed  that the  defendant be allowed to purchase the plaintiffs’  share in  the   suit property, for Rs. 9,000/-.   Accordingly,  it accepted  the  defendant’s appeal and dismissed  the  cross- objections  of the plaintiffs.  Hence,, this appeal  by  the plain- tiffs. Mr.  Lal Narain Sinha, learned counsel for  the  appellants, contends  that the High Court was in error in  holding  that the  plaintiffsappellant,  had made any request such  as  in contemplated, by Section 470 2 of the Partition Act, 1893, and therefore, it was necesary to  have recourse to Section 3 of the Act.  It is  submitted that Sections 2 and 3 of the Act did not apply to the  case) which had, in consequence, to be dealt with de-hors the  Act in  accordance with equitable principles.  The  High  Court- proceeds the argument  has allowed to  defendant-respondant to purchase the share of the plaintiffs in the suit property for Rs. 9,000/- only; while the current market value of  his share  would  be more than 10 or 12 times  of  that  figure, which was highly unjust and unfair to the appellants. As  against this, it is urged on behalf of  the  respondent, that once it is held that the Act does not apply, the  Court has  no power to sell the property.  It is pointed out  that the High Court had given the respondent the first option  to purchase  the plaintiffs share in the property at the  value of  Rs. 9,000/- because the equity was entirely on the  side of  the respondent, that the plaintiffs were  residing  away from the property, they owned 5 or 6 houses in Patna,  while the  respondent and his widowed sister were residing in  the first  floor  of the suit property and  the  respondent  was running a shop in the ground floor.  It is further submitted that  the value of the plaintiffs’ 13/16 share fixed by  the High  Court was the piece at which they had purchased,it  in 1957, and the suit for partition was filed in 1959, that  in these  circumstances the High Court was right in not  taking into  account  any increase in its value subsequent  to  its purchase  in  1957.   It is maintained that  it  would  work hardship  on the respondent who was a poor man, to  fix  the value  of  the  plaintiffs’ share by  auction  beetween  the parties. Before dealing with these rival contentions, it is necessary to  ascertain  whether the High Court was right  in  holding that  the plaint contained a request such as is referred  to ’InSection  2 of the Act, and therefore, the ’Court had  but to accept "theprayer made by the defendant to buy the  share and rights of tilt"plaintiffs exactly in- terms of Section 3 of the Act". Sections 2 and 3 of the Act are inter-linked.  A perusal  of Sections  2 and 3 will show that the Court can exercise  the power under Section 3. if               (i)  there  is  a  request  of  any  of   such               shareholders   interested   individually    or               collectively,  to the extent of one moiety  or               upwards,  for  sale of the  property  and  its               distribution, and               (ii) it reaches an opinion that by reason  of

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             the  nature, of the property or the number  of               shareholders or some special circumstances,  a               division  of the propert cannot reasonably  or               conveniently ’he made, and that a sale of  the               property  and  distribution  of  the  proceeds               would   be   more  beneficial  for   all   the               shareholders. Even when both these conditions are satisfied, the Court has a  discretion  to  direct  or not to  direct  sales  of  the property and distri- 471 bution  of the proceeds.  This is clear from the word  "may" used in this Section. It  will  be seen from the above analysis that  the  request contemplated  in No. (1) is a sine qua non for  directing  a sale  because  such  a  request  necessarily  signifies  his willingness to have his share converted into money, so  that the  co-sharers may, by means of the procedure  provided  in Section 3, buy them out.  The request for sale envisaged  by Section 2 must by one for public sale.  If no such request has been made to the Court, Section 3 cannot be brought into operation. Now  let  us  see whether the plaint  contained  any  prayer which-as the High Court has held-substantially amounted to a request for such sale under Section 2. The material part  of the plaint reads as follows :               "8. That the premises in suit is very small in               dimension, measuring .013 acre only, and if it               is considered by the court that the separation               of  the defendants share in the said  premises               is not feasible, the plaintiffs beg to offer a               price held to be reasonable and proper to  the               defendant for his share in the said premises. Again,  in  Para  1  O(c)  it  is  prayed  :  "That  in  the alternative when division of premises in suit is considered not  feasible,  sale  of the defendant’s  share  or  of  the premises be directed and the same be .sold to the plaintiffs for reasonable and proper price." By  no  stretch  of language, the above  extracts  from  the plaint,  could  be  construed to  contain  a  request  under Section  2 that the suit ,Property be publicly sold and  its sale proceeds distributed pro rata ’between the parties. Nor  could,  by  any  reckoning,  the  alternative  proposal contained  in  the  defendant’s written  statement,  to  the effect, that he was prepared to buy out the plaintiffs share at  evaluation that may be fixed by the Court. amount  to  a request under Section 2. In  short.  neither  in substance nor in  form  any  request within the ,purview of Section 2 had been made by any of the parties  (co-sharers).   That  condition  precedent  ;   for invoking Section 3(1) was lacking. Thus considered, it is clear that the provisions of Sections 2  and  3 ,of the Partition Act are not  applicable  to  the peculiar circumstances of the case.  At the same time, there is  a  concurrent finding of fact ’recorded  by  the  courts below that the suit property is so small, that it cannot be conveniently and reasonably partitioned by metes and bounds, without destroying its intrinsic worth.  This finding is un- assailable.   In our opinion in such a situation  the  Court can devise such other feasible mode for effecting  partition as  may  appear  to  it to be  just  and  equitable  in  the circumstances  of the case. The  suit property, being incapable of division  in  specie, there is no alternative but to resort to the process  called Owelty, according

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472 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 A.I.R. 1958 Andhra Pradesh 647), 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. Now  in the present case, the defendant is the  smaller  co- sharer and he is using the property as a shop-cum-residence. Equity requires that he should be given a preferential right to  retain  the  whole of the suit property  on  payment  of compensation  being the just equivalent of the value of  the plaintiffs’  share to them.  The valuation of’  Rs.  9,000/- fixed  by  the  High Court, was certainly not  a  fair  com- pensation  for  the plaintiffs’ 13/16 share.  This  was  the price  at which the plaintiffs had purchased their share  on April 27, 1957.  But in 1958, more than one year before this suit, which was instituted on August, 1959. a plan or scheme for concertina this locality into a market had been approved by  the  authorities.  This must have led’ to  an  immediate spurt  in  the value of the land in the locality.   In  this connection  it is pertinent to note that when in  1963  this Property was, in execution of the decree of the trial court, put  to  auction,  the highest bid fetched  by  it  was  Rs. 50,000/-.  It was therefore, highly unfair to the plaintiffs to  fix  the value of their share at Rs.  9,000/-,  even  on March   20,  1967  when  the  High  Court’s  judgement   was pronounced.   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   the 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, facing  which  the plaintiffs  will  be  entitled to be  allotted  and  put  in possession of the whole, of the suit property. on payment to the  defendant ’of 3/16 share of the value of  the  property determined  by the Subordinate Judge, Patna, in  the  manner aforesaid. For  the foregoing reasons, we allowed this appeal and  send the  case  back to the Subordinate Judge,  Patna,  with  the direction  that the should take such further  evidence  with regard to the increase in the value of similar properties in the locality since 1963. as the parties may wish to produce, and then and after hearing the parties, dispose of the  case in  conformity with the observations made in this  Judgment. There shall be no order as to costs in this Court. S.R.                                Appeal allowed. 473