Karnataka High Court
Sri. Janardhan Prabhu S/O. Late Anantha ... vs Sri. Ganapathi Prabhu S/O. Late Anantha ... on 17 August, 2007
Equivalent citations: ILR2007KAR3871, 2007 (6) AIR KAR R 556, 2008 A I H C 707, (2008) 4 KANT LJ 273, (2007) 4 ICC 556
Author: H.N. Nagamohan Das
Bench: H.N. Nagamohan Das
ORDER H.N. Nagamohan Das, J.
Page 1784
1. In this writ petition the petitioner has prayed for a writ in the nature of certiorari to quash the order dated 22.02.2007 in FDP No. 15/2002 passed by the II Additional Civil Judge (Junior Division), Karkala, in so far as it relates to rejection of I.A. No. II filed by the petitioner under Section 3 of the Partition Act.
2. First respondent filed O.S. No. 168/2001 against the petitioner, second respondent and others for partition and separate possession of his 1/10th share. In O.S. No. 168/2001, the defendant Nos. 1, 3 to 5 and 7 to 9 relinquished their rights in the schedule property in favour of the petitioner under a registered relinquishment deed dated 10.01.2002. Subsequently a joint memo was filed in O.S. No. 168/2001. In terms of the joint memo the trial Court passed a preliminary decree declaring that the first and second respondents are entitled for 1/10th share each and petitioner is entitled for 8/10th share. Subsequently first respondent filed F.D.P. No. 15/2002 before the trial Court to draw the final decree. In this F.D.P. No. 15/2002 the trial Court appointed a Court Commissioner to find out the feasibility of division of schedule property in terms of preliminary decree. The Court Commissioner submitted a report dated 28.02.2004 stating that it is not feasible to divide the schedule Page 1785 property in terms of the preliminary decree. Thereafter the first respondent got the schedule property valued by a PWD Engineer and he submitted a valuation report valuing the schedule property at Rs. 8.00 lakhs. Subsequently the first respondent filed an application, I.A. No. I under Section 2 of the Partition Act seeking public auction of the schedule property and to distribute the sale proceeds amongst the sharers. Petitioner filed an application, I.A. No. II under Section 3 of the Partition Act to buy the shares of first and second respondents in terms of the valuation made by the PWD Engineer. The first respondent filed another application, I.A. No. III offering to purchase the schedule property at Rs. 15.00 lakhs. Second respondent filed an application, I.A No. IV to buy the shares of first respondent and petitioner at the rate valued by PWD Engineer. The trial Court by a common order dismissed all the applications. Hence, this writ petition in so far as it relates to dismissal of I.A. No. II filed by the petitioner under Section 3 of the Partition Act.
3. Heard arguments on both the side and perused the entire writ papers.
4. It is not in dispute that the schedule property consists of a building and a temple called Navadurga Temple. The property to be divided is only the building portion and not the temple. The Court Commissioner submitted a report on 28.02.2004 stating that it is not feasible to divide the schedule property in terms of preliminary decree and me same is accepted by the parties. Therefore the question of division and separation of schedule property in terms of preliminary decree under Section 54 or under Order 26 Rule 13 and 14 CPC is not possible. Then it is to be examined whether it is possible to proceed under Partition Act, 1890. Section 2 of the Partition Act specifies for sale of schedule property and for distribution of sale proceeds on prorata basis subject to certain conditions. Section 3 of the Partition Act specifies to buy the share or shares of other shareholders, internal bid etc. The Supreme Court in the case of R. Ramamurthi Aiyar (dead) by LRs v. Raja V. Rajeswara Rao while interpreting the scope of Section 2 and 3 of the Partition Act specified the various stages in the final decree proceedings as under:
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 under Section 2 to the court to direct a sale any other shareholder can apply under Section 3 for leave to buy at a valuation the share of the other party asking for a sale.
3. The court has to order valuation of the share of the party asking for sale.
Page 1786
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 under Section 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 under Section 3 shall be dismissed, the applicant being liable to pay all the costs.
5. Keeping in mind the law laid down by the Apex Court in the decision referred to above it is necessary to examine the fact situation in the instant case. It is at the instance of first respondent a PWD Engineer was appointed as Court Commissioner to submit a valuation report. Accordingly the Court Commissioner submitted a report stating that the schedule property was valued at Rs. 8.00 lakhs. Thereafter first respondent filed I.A. No. I under Section 2 of the Partition Act to sell the schedule property in a public auction. Section 2 of the Partition Act specifies that a shareholder interested individually or collectively to the extent of one moiety or upwards can make a request for sale of schedule property and to distribute the sale proceeds on prorata basis. The meaning of the word 'one moiety' means, fifty percent share in the schedule property. In the instant case, in the preliminary decree it is declared that first respondent is having 1/10th share. Except first respondent no other person before the trial Court made a request for sale of schedule property. Therefore the request of first respondent for sale of schedule property will not satisfy the conditions of one moiety or upwards as specified under Section 2 of the Partition Act.
6. The first respondent by filing an application under Section 2 of the Partition Act made his intention clear that he wanted his share in the schedule property to be converted into money. Therefore the first respondent is not entitled to make an offer to buy the shares of others in the schedule property. Further the application of first respondent to buy the shares of other respondents, I.A. No. III on the valuation of schedule property at Rs. 15.00 lakhs came to be dismissed by the trial Court. The first respondent has not questioned the order of dismissal of I.A. No. III and as such the same had become final. The second respondent filed I.A. No. IV to buy the shares of other shareholders and the same came to be dismissed by the trial Court and me same had become final. There is no request by any one of the parties to the proceedings to direct for an auction amongst the cosharers. In the facts and circumstances of this case, it is not possible to effect partition as specified in Sections 2 and 3 of the Partition Act.
7. Now the only question is, whether the trial Court is justified in rejecting the claim of petitioner to buy the shares of respondents. It is settled position of law that in a preliminary decree there will be a declaration and determination of the share of parties. But actual division and separation of property, handing over physical possession and all other equities which Page 1787 required determination and adjustment among the sharers are to be decided in the final decree proceedings. In a petition/application under Order 20 Rule 18 CPC for final decree the Court shall divide and separate the shares in terms of preliminary decree under Section 54 or under Order 26 Rule 13 and 14 CPC. If it is not practicable to divide the property in terms of preliminary decree either under Section 54 or under Order 26 Rule 13 and 14 CPC then Court shall proceed under Section 2 and 3 of Partition Act, 1893. In cases not covered by Section 2 and 3 of the Partition Act the Court has the discretionary power to adopt equitable method. One such equitable method is called owelty. According to owelty method 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.
8. The Supreme Court in the case of Badri Narain Prasad Choudhary and Ors. v. Nil Ratan Sarkar held as under:
19. 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 unassailable. 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.
20. 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 Andh Pra 647), in cases not covered by Sections 2 and 3 of the Partition Act, the power of the Court to partition property by any equiable method is not affected by the said Act.
9. The petitioner is having 8/10th share and respondents are having 1/10th share each. Petitioner is residing in the schedule property and in a portion of the premises he is carrying on hotel business and this is the only source of income for his livelihood. Further the petitioner is afflicted with partial paralysis. On the other hand the petitioner contend that the respondents are residing separately in their own houses having separate business and they are well off and the same is not disputed. In the facts and circumstances, this is a fit case to apply the principles of owelty and to allow the petitioner to retain the whole of the suit property on payment of just compensation to the respondents.
Page 1788
10. Now the question is, what is just compensation payable to the respondents in lieu of their share. At the instance of first respondent the Court Commissioner valued the schedule property at Rs. 8.00 lakhs. Subsequently first respondent offered to buy the schedule property for a total value of Rs. 15.00 lakhs. Learned Counsel for petitioner submits, that before the trial Court the petitioner agreed to buy the shares of respondents as offered by first respondent. Even before me the learned Counsel for petitioner made a submission that petitioner is willing to buy the shares of respondents on a total value of the schedule property at Rs. 15.00 lakhs. This offer of petitioner appears to be bonafide and reasonable. On the basis of valuation of Rs. 15.00 lakhs to the entire schedule property the cost of 1/10th share works out to be Rs. 1.50 lakhs. Therefore the respondents who are having 1/10th share each in the schedule property are entitled for Rs. 1.50 lakhs each towards their share. In the facts and circumstances of this case payment of Rs. 1.50 lakhs to each of the respondents appears to be just and reasonable compensation in lieu of their 1/10th share in the schedule property.
11. For the foregoing reasons, the following;
ORDER I. Writ petition is allowed.
II. The impugned order of the trial Court dated 22.02.2007 in F.D.P. No. 15/2002 passed by II Additional Civil Judge (Junior Division), Karkala is hereby quashed.
III. The matter is remanded to the trial Court to dispose the case in conformity with the observations made above, as expeditiously as possible and in any event not later than three months from the date of receipt of copy of this order.
IV. No order as to costs.