089-NLR-NLR-V-23-KOELMAN-v.-AMARASEKERE-et-al.pdf
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Preset* : .Bertram G.J. and De Sainpayo J.KOELMAN v. AMARASEKERE et al.
123—D. C. Colombo, 51,463.
Fiscals «fe—Material irregularity—Misdescription—Sale for a emailprice—Substantial injury—Is direct evidence necessary to connectinjury with irregularity 9
To set aside a Fiscal’s sale on the ground of material irregularityunder section 282 of the Civil Procedure Code, it is not necessarythat in all cases there should be direct evidence of the connectionbetween the irregularity and the injury. Where the injury appearsto be one which may be reasonably and logically inferred to be thenatural consequence of the irregularity,' the connection need notbe further established by 11 direct evidence.9’
It is only in cases where there is no such reasonable connectionbetween the irregularity and the injury that the necessity for directevidence is insisted upon.
nnHE
facts appear from the judgment.
A. St. V. Jayawardene, K.C. (with him Weerasinghe), for appellant.
J. C. Pereira, K.C. (with him H. F. Perera), for respondent.
November 18, 1921. Bertram CJ.—
This is an appeal against an order of the Colombo DistrictCourt setting aside a Fiscal’s sale on the ground of a “ materialirregularity” in the conduct of the sale which the learned DistrictJudge held to have caused" substantial injury ” in terms of section282 of the Civil Procedure Code.
The alleged material irregularity was a misdescription of theproperty to be sold. The property was advantageously situateddose to a railway station. • It comprised an old Walauwa and threeacres of land, but the extent was, in fact, described as being only 1$acre. The “ substantial injury ” was that it was sold much belowits real value. It was valued in the inventory at Its. 9,000, and by
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Koelmanv.
Amarasekere
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the Fiscal at Rs. 5,000, and it actually fetched Rs. 1,100. Evidencewas led to prove that properties in the immediate vicinity hasrecently been sold at a rate altogether in excess of that realized atthe sale.'
There wps no positive evidence connecting the misdescriptionwith the low price realized, but the learned Judge held that the lowprice fetched might be inferred to be in consequence of this andanother alleged irregularity not necessary to discuss, and set asidethe sale.
Mr. A. St. V. Jayawardene, for the appellant, contends that it wasnot competent for the learned Judge to do so upon the evidence;that not only must the irregularity and the injury both be proved,but that there must be further “ direct evidence ” connecting theone with the other. The evidence he seemed to contemplate wasevidence by persons present at the sale testifying to the effect thatthey would have bid up to a higher price if they had realized thefull extent of the property-. Mr. Jayawardene relied upon threePrivy Council decisions in Indian cases and also upon two decisionsin our own Court, in which these Indian cases have to a certainextent been followed.
There is no doubt that in many Indian cases emphasis has beenlaid upon the necessity of connecting the irregularity with theinjury, and in certain cases it has been said that that evidence mustbe “ direct evidence.” This proposition is based upon the terms ofsection 282 of the Civil Procedure Code, 1889, which saysNo saleshall be set aside on the ground of irregularity, unless the applicantproves to the satisfaction of the Court that he has sustained sub-stantial injury by reason of such irregularity.” The necessity
that is to say, that it must not be inferential or presumptive, but“ direct,” does not appear to me justified by the terms of the section.The facts of the Indian cases must, therefore, be examined. If thisis done it will be found that it is nowhere declared that where theinjury appears to be one which may be reasonably and logicallyinferred to be the natural consequence of the irregularity, theconnection must be further established by “ direct evidence.”It is only in cases where there is no such reasonable connectionbetween the irregularity and the injury that the necessity for“ direct evidence” is insisted upon.
In the firat of these eases (Macnaghten v. Pershad Singh1), thejudgment demonstrated that in the circumstances of the case theinadequacy of the price could not reasonably be infrared to be theresult of the irregularity. In the second of these cases (Aruna-cheBam v. ArunacheBam*), there was no actual evidence of anysubstantial damage. It was merely assumed that the properlysold for less than its value in consequence of a misdescription.
*{188$) 1$ Mad. 19.
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In the third of these oases (Razul Khan v. Hussain x), thejudgment 1921.of the Privy Council, while observing that the section clearlycontemplates M direct evidence ” on the subject, and that there c.J.was no such evidence, expressed the opinion that “ it would be Bodmin*extremely improbable that injury could have happened from the Amawkerenon-compliance with the strict letter of section 290.” None ofthese cases, therefore, can be relied upon as an authority for Mr.Jayawardene’s proposition.4 The phrase “ direct evidence ” onlyoccurs in one of them (Bazul Khanv. Hussain1), and there it was usedobiter. On the other hand, there is another Privy Council decisionof a later date (Saadatmand Khan v. Phvl Kuar*), in which it is truethese previous cases are not discussed, but in which the JudicialCommittee appear to have considered itself justified, withoutanything in the nature of “ direct evidence/’ in connecting theirregularity with the injury simply by a process of logical reasoning.
Lord Hobhouse in delivering the judgment observed: “ It is, indeed,something more than the kind of irregularity which is commonlyalleged, for it is a misstatement of the value of the property whichis so glaring in amount that it can hardly have been made in goodfaith, and which, however, it came to be made, was calculated tomislead possible bidders, and to prevent them from offering adequateprices or from bidding at all.” It is quite.true that in India animpression does seem to have prevailed that the Privy Council hasdeclared that in all cases‘ * direct evidence ’ ’ of the connection betweenthe irregularity and the injury must be adduced (see Jagan Noth v.
Prasad*). But even in that case there was no necessarily logicalconnection between the irregularity and the damage, and moreoverthis interpretation of the Privy Council decisions has by no meansbeen universally accepted. It is observed in Woodroffe ds Amir Alt's“ Civil Procedure in British India (.1908)/’ of p. 985 : “ Proof, ofcourse, will be required, and this proof may, it is submitted, on atrue construction of the Privy Council decisions, consist of* direct ’evidence in the narrow sense stated, or of evidence of facts whichwarrant an inference that the irregularity was the cause of the inade-quate price/’ There is, indeed, one Indian case which goes beyondthis (Venkatasubbaraya Chetti v. Zemindar of Karvetinagar4), whereit was said that “ where a material irregularity is proved,and it is,also proved that the price realized is much below the true value,'then it may ordinarily be inferred that the low price was a conse-quence of the irregularity, even though the manner in which theirregularity produced the low price be not definitely made out/’
Our own Court has, however, treated this decision as not beingauthoritative (see CheBappa v. Selvadurai (infra)), and it appearsto have been delivered without full consideration of. the previousauthorities. The learned District Judge in the present case thought
1 (1893) 21 Cal. 66.
4 (1898) 20 AUt 412.
*(1896) 28 AB. 37.
4 (1896) 20 Mad. 159.
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1921*himself justified in following this ease, but in my opinion it is a judg-
ment whi£b it is safer to treat as going beyond established principles,
J. and as not to be followed in our Courts.
KoOmanSo much for the Indian oases. With regard to bur own authorities,
Amarasebsre they are three in number: Silva v. Dias,1 CheUappa v. Sdvadmai,*and Cassim t>. Andris? The earlier cases may be disregarded. Inthe first of these cases (Silva v. Dias (supra)), Hutchinson C.J. didnot adopt Hr. Jayawardene’s proposition. He held that in thecircumstances of the case the lowness of the price realized could notbe reasonably connected with the irregularity. “ It may be a reason-able inference in some cases, but not in others; we must look at thenature of the property and the nature of the irregularity and all thecircumstances.” He said nothing about “ direct evidence.” WoodBenton J., on the other hand, adopted what was apparently supposedto betheeffectof theIndiandecisionsasto“direct evidence,” and withunflinching logic carried that principle to its full conclusion. “ Thecausal relation between the irregularity and the sale of^the propertyat an undervalue may, no doubt, be a reasonable inference from thev facts of the case, but the question we have to decide is whether it isopen to the District Judge to draw that inference in the absence ofany direct evidence connecting the two.” This must be taken as thepersonal opinion of the learned Judge, andnot pert of the judgmentof theCourt. In CheUappa v. Sdvadurai (supra), which purported tofollow that case, the irregularity alleged was that there was nopublication of the sale in a certain village, but there was obviouslyno necessary connection between the inadequate price and thefailure to publish the sale in this village, in the absence of evidencethat there were probable bidders in this village. The case, therefore,in spite of the grounds on which it proceeded, cannot be consideredan authority as to the necessity of “ direct evidence ” in all cases.Cassim v. Andris (supra) is a definite decision in the other direction.It is the decision of a single Judge, but of a Judge to whose authorityin such matters weight is to be attached. Pereira J. observes: “Nodoubt it has been held that such a connection should be affirmativelyestablished, but there is no reason why it may not be establishedby means of presumptions permissible under section 114 of theEvidence Ordinance as effectually as it may be by direct evidence.”It does not appear to me, therefore, that our own Court has anywheredefinitely decided that “ direct evidence ’ ’ connecting the irregularitywith the injury must in all cases be adduced. I prefer to adoptthe principle enunciated by Pereira J. With regard to the appli-cation of that principle to the present casei the price realized wasso low and the misdescription was so considerable that, in view ofthe situation of the property, it seems to me that the learned Judgemay justifiably have concluded that inadequacy of price was a
1 (1910) 13 N. L. R. 126.1 (1912) 16 N. L. R. 139.
8 (1913) 17 N. L. B. 144.
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consequence of the misdescription. It is true that his mind appearsalso to have been influenced by another alleged irregularity whichdoes not seem to me to have been fully made out, and also by thesupposition that there was collusion between the purchaser and thejudgment-debtor, who is in this case the administrator of an estate.This collusion can hardly be considered to have been established,and even if it were established, it would- not be relevant to thepresent question. I think, however, that the connection betweenthe inadequacy of the price and the irregularity may be consideredas reasonably established by the circumstances of the case.
One farther point is taken which need not be fully discussed, and,that is, that as the decree in the present case was against theadministrator, the applicant who intervenes as next friend of one ofthe minor heirs had no locus standi for the purpose. This objectionis sufficiently met by the case of Carwppen (Jhetty v. Habtbu1cited by Mr. H. J. 0. Pereira. For the reasons given I would dismissthe appeal, with costs.
Db Sampayo J.—I am of the same opinion.
Appeal dismissed.
1921.
Bertram
G.J.
Koejman v.Amarasekere