Calcutta High Court (Appellete Side)
The Hon'Ble Justice Nishita Mhatre vs The Hon'Ble Justice Asha Arora on 22 April, 2015
Author: Nishita Mhatre
Bench: Nishita Mhatre
Form No. J. (2)
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
Present :
The Hon'ble Justice Nishita Mhatre
And
The Hon'ble Justice Asha Arora
F.A 155 of 2014
Satyendra Nath Nandi since deceased
Sankar Nath Roy
For appellant: Mr. Adhip Chandra Kar,
Mr. Swapan Kumar Majumder
Heard on:- 22nd April, 2015
Judgment on: 22nd April, 2015
Nishita Mhatre,J.
The present appeal is directed against the decision of the Chief Judge, City Civil Court, Calcutta dated 20th November, 2013 by which the application filed under Section 307 of the Indian Succession Act by the appellant has been rejected.
One Satyendra Nath Nandi executed a will on 20th June, 2006. His son-in-law Sankar Nath Roy, the appellant herein, was appointed as the Executor of the will. He directed that his property in Puducherry would vest in the S. S. Nandi Foundation Trust which he created and that the income from that property would also be enjoyed by the Trust. A trust was also created by the testator Satyendra Nath Nandi appointing himself as the First Trustee and on his death Sankar Nath Roy and any of his sons would be the trustees. The Trust properties would vest in them for ensuring that the objects of the trust were followed. The objects of the trust as mentioned in the trust deed which was annexed to the application filed under Section 307 of the Indian Succession Act are to set up homes for children and elderly persons and to establish institution for imparting education and health care for deserving children on such terms and conditions as the trustees may consider expedient. One of the other objects of the trust was to arrange for shelter and food for deserving persons and to maintain an establishment conduced of the welfare of the needy. Both the beneficiaries as well as the trustee being the appellant who was also the executor of Satyendra Nath Nandi's will founded expedient to sell the property especially since it was rented and the tenants were in possession had stopped paying the rent since September, 2011.
Satyendra Nath Nandi expired on 24th December, 2009 and an application for probate of the will was made before the City Civil Court, Calcutta. The City Civil Court granted the probate of this will on 31st January, 2011.
An application was filed by the appellant in the year 2012 under Section 307 of the Indian Succession Act for permission to sell the property situated in Puducherry being 2, Amborsalai at the crossing of North Boulevard, Ward-C, Block-17, Survey-47, Re- survey-239 PT, Patta No.2488 having a total area of 132 square meters equal to 1421 square feet.
The contention of the appellant was that since all the beneficiaries were of the view that the objects of the trust would be better served by selling the property, an application was made before the City Civil Court.
The City Civil Court dismissed the application by concluding that it was misconceived. The court held that the application could have been filed by the executor of the will of Satyendra Nath Nandi before the probate court when the probate was granted. The court further held that the executor of the will cannot be permitted to "sell the probate of a trust which is a legatee of the will even if the beneficiaries of the trust give their consent". The application was, therefore, dismissed.
Section 307 of the Indian Succession Act empowers the Executor of a will or administrator to dispose of the property which is vested in him under Section 211 of the aforesaid Act. The power to sell the property is subject to the following restrictions and conditions, viz.
"(1) Subject to the provisions of sub-section (2), an executor or administrator has power to dispose of the property of the deceased, vested in him under Section 211, either wholly or in part, in such manner as he may think fit.
(2) If the deceased was a Hindu, Muhammadan, Buddhist, Sikh or Jaina or an exempted person, the general power conferred by sub-section (1) shall be subject to the following restrictions and conditions, namely:-
(i) The power of an executor to dispose of immovable property so vested in him is subject to any restriction which may be imposed in this behalf by the will appointing him, unless probate has been granted to him and the Court which granted the probate permits him by an order in writing, notwithstanding the restriction, to dispose of any immovable property specified in the order in a manner permitted by the order.
(ii) An administrator may not, without the previous permission of the Court by which the letters of administration were granted,-
(a) mortgage, charge or transfer by sale, gift, exchange or otherwise any immovable property for the time being vested in him under Section 211, or
(b) lease any such property for a term exceeding five years.
(iii) A disposal of property by an executor or administrator in contravention of clause (I) or clause (ii), as the case may be, is voidable at the instance of any other person interested in the property.
(3) Before any probate or letters of administration is or are granted in such a case, there shall be endorsed thereon or annexed thereto a copy of sub-section (1) and clauses
(i) and (iii) of sub-section (2) or of sub-section (1) and clauses (ii) and (iii) of sub-section (2), as the case may be."
A bare perusal of the aforesaid provision of law would indicate that an application can be made for the sale of immovable property only after the probate has been granted to the executor of a will. It has to be made to the same court which grants the probate. In the present case undisputedly the probate was granted by the City Civil Court at Calcutta. The property therefore vested in the propounder of the will, namely the appellant here. Before the Puducherry property could be transferred to the S. S. Nandi Foundation Trust as per the desire of the testator, the trustees of the aforesaid felt that the objects of the trust would be better served if the property was sold and the sale proceeds were made over to the Trust. This was because a four storied tenanted building occupied the plot of land. The tenants had stopped paying rent and continued on the property though the lease had expired. The application was filed before the City Civil Court at Calcutta after the probate was granted for permission to sell the property as envisaged under Section 307 of the Indian Succession Act. Therefore, the City Civil Court has erred in rejecting the application. Obviously, when permission is granted to sell the property, the court would consider what is beneficial to the trust.
The application which was filed before the City Civil Court is for permission to sell the property for a price not less than `80 lacs. It appears that the trial court had directed the appellant to submit a valuation report. Accordingly, a valuation report dated 19th March, 2013 was produced. This report indicated that the value of the property was `90 lacs.
When the matter reached for hearing before this Court, an order was passed on 4th March, 2015 directing that a fresh valuation report be produced. Accordingly, the appellant has produced before us a fresh valuation report dated 13th March, 2015. This indicates that the value of the property has appreciated and is now at `1 crore 30 lacs. In these circumstances, in our opinion, there could be no impediment for the appellant to sell the aforesaid property at Puducherry for a base price of `1 crore 30 lacs.
In order to ascertain that the appellant secures the best possible price for the property at Puducherry, we direct that an advertisement be issued in two local newspapers, one in English and the other in the vernacular as well as English daily newspaper widely circulated all over the country for the sale of the aforesaid property. The advertisement will mention the base price as `1 crore 30 lacs. The advertisement will call for bids for the aforesaid property which bids shall be submitted to the Registrar General of this court. The Registrar General shall open the bids and accept the highest bid. The bids shall be opened in the presence of the appellant. The appellant or the beneficiaries are also permitted to bid in their individual personal capacities.
The advertisements shall appear in the newspapers within three weeks from today. The bids must be submitted before the Registrar General of this court within a month from the advertisement being issued. The Registrar General shall issue notices to the bidders and the appellant indicating the date on which the bids would be opened. The advertisement shall also mention that the bids must be accompanied with a Pay Order of a Nationalised Bank for 10% of the bid amount. The appellant shall deposit Rs.10,000/- with the Registrar General after the advertisement has been issued and a copy of each of the advertisements shall also be furnished to the Registrar General. The entire exercise must be completed by 31st July, 2015.
In view of the aforesaid facts and circumstances of the case the order dated 20th November, 2013 passed by the Chief Judge, City Civil Court, Calcutta is set aside.
The appeal is allowed with the aforesaid directions.
(Asha Arora, J.) (Nishita Mhatre,J.)