Samarasinghe v. Wickremesinghe.
Present: Koch J. and Soertsz A.J.
SAMARASINGHE v. WICKREMESINGHE.
154—D. C. Matara, 1,444.
Partition—Sole of property—Valuation by Commissioner—Upset price—Saleto public after offer to co-owners—Irregularity—Ordinance No. 10 of1863, s. 8.
When land appraised by a Commissioner for sale under the PartitionOrdinance is offered for sale to the co-owners, the bidding shouldcommence at the appraised value. When it is put up for sale to thepublic the law does not require the bidding to start from an upsetprice.
By upset price is meant the appraised value.
A sale under section 8 of the Partition Ordinance may be set asidefor substantial irregularity and unfairness.
<1’-I24i 20 .V. /.. R. 181..- 118821 1 8. R. 14?.
•" (1900) 1 Matara Cases 103.
SOERTSZ A.J.—Samarasinghe v. Wickremesinghe.
PPEAL from an order of the District Judge of Matara.
Cur. adv. vult.
Navaratnam, for appellant.
Garvin, for respondent.
July 20, 1935. Soertsz A.J.—
This is an appeal from an order of the District Judge of Matara, can-celling a sale held under section 8 of the Partition Ordinance, No. 10 of1863, on December 9, 1933. The land put up for sale on this occasionwas lot B of Beligahakumbura shown on plan No. 973 dated April 30,1925, made by S. E. Ferdinand, Licensed Surveyor. By decree enteredon March 23, 1926, a sale of the entire land ‘ in three lots as surveyed ’was ordered and a commission was issued to the Surveyor for that purpose.He valued lot A at Rs. 840, lot B at Rs. 375, and lot C at Rs. 300. Asale was held on December 19, 1932, at which lot A fetched Rs. 625,lot B Rs. 1,075, and lot C Rs. 510. The Court, however, set aside thissale on the ground that it took place long after the advertised time andordered a resale, “ upset values to be those fetched at first sale ”. TheCommissioner, however, held the second sale with the appraised valuestaken as the upset prices, and on a complaint by the parties this sale toowas set aside so far as lot B was concerned, and order was made that lotB be put up for sale again at the upset price of Rs. 1,075 which was theamount it was sold for at the first sale. The conditions of sale drawn upfor this occasion provide that “ the said land shall be put up for saleamong the shareholders at the appraised value of Rs. 1,075 and if notpurchased by them at the appraised value, it will then be put up for saleto the public and sold to the highest bidder”. There were no bids whenthe sale was confined to the shareholders. The lot was then offered forsale without reserve to the public and a shareholder, the seventeethdefendant-appellant, purchased it for Rs. 385. The plaintiff-respondentmoved that this sale be cancelled (a) on the ground that the Court orderof March 23, 1933, had not been communicated to the auctioneer, (b) onthe ground that there was collusion between the purchaser and the firstrespondent. The District Judge made order holding “the sale bad inthat the price accepted was below the upset price fixed by Court”. Itis from this order that the appeal has been taken. All the delay and theconfusion in this case are the result of the learned District Judge nothaving taken the elementary precaution of reading the section of thePartition Ordinance under which he was acting. That section is quiteexplicit with regard to the procedure to be followed. On a commissionfor sale being issued the Commissioner “ shall proceed to make a justvaluation of the property ” and give notice that the “ property will beput up for sale, first among the owners thereof, at the price for which thesame shall have been valued, and if not purchased by some of them that itshall be put up and sold to the highest bidder, and on the day named theCommissioner shall proceed to sell the whole of such property by firstputting up the property for sale, …. amongst the said owners.at the upset price for which the property has been valued; and if none of theowners shall become the purchaser thereofthe Commissioner
SOERTSZ A-I.—Samarasinghe v. Wickremesinghe.
shall forthwith put the same up for sale …. by public auctionto the highest bidder”. Now, in this case on the occasion of the thirdsale, the one under consideration, the land was put up for sale at what isdescribed as the “ appraised value of Rs. 1,075 ”, among the shareholders.But the appraised value was Rs. 375 and not Rs. 1,075. The figureRs. 1,075 was the upset figure at which the Court ordered on March 23,1933, the sale to be held “ of consent of the parties affected ” says theDistrict Judge. A reference to the Journal entry of March 23, 1933, doesnot show which of the parties were present when that order was made,and I see no justification for the District Judge’s observation that thiscourse was taken with the consent of the parties affected. There wereseveral parties in this case .who were not represented by proctors. More-over, I am doubtful whether a clear requirement of the Ordinance thatthe sale among the co-owners be held at the upset price at which theCommissioner has valued it, can be disregarded with the consent of parties.
It has been repeatedly held that the provisions of this Partition Ordi-nance should be punctiliously observed. I find the following notes onthe words “just valuation” in Jayewardene on Partition, p 183. “Thefirst duty of the Commissioner is to make a valuation of the property tobe sold. The valuation or appraisement must be just; if it is low theco-owners will suffer, if it is high the co-owners anxious to buy theirproperty might be prevented from doing so ”. In this instance it isimpossible to say how many co-owners refrained from taking part at thesale owing to the high upset price fixed for the sale among them. Someof them might have thought—perhaps without justification—that itwould be at a price higher than that figure, that it would be sold to amember of the public. That appears to be what the District Judgeintended too, for he says in his order that the sale was bad as the priceaccepted was below the upset price. In my opinion, it is not at all clearthat there is an upset price fixed for the sale to the public. Jayewardenein his commentary raises this question at page 187 “ Must not the sale bypublic auction too commence at the upset price?”, but leaves itunanswered. I am not aware of any decisions on this point, but I thinkthat if that had been the intention of the Legislature it should have andwould have been clearly expressed. Here when the question is consideredcarefully one feels compelled to take notice of the fact that it says “ firstamong the owners thereof, at the price for which the same shall have beenvalued, and if not purchased by some of them it shall be put up and soldto the highest bidder Nothing is said as to an upset price in that case.This is so far as the notice of sale is concerned. Later when the saleitself is being provided for, there is a similar distinction drawn: “ TheCommissioner shall proceed to sell …. by first putting up thesame for sale …. amongst the said co-owners, at the upset pricefor which the property has been valued; and if none of the owners shallthen because the purchaser thereof …. the Commissioner shallforthwith put the same up for sale …. by public auction to thehighest bidder ”.
In my opinion, therefore, the District Judge was wrong when he heldthe sale bad because when the lot was offered for sale to the public, the
SOERTSZ A.J.— Samarasinghe v. Wickremesinghe.
bidding was not started with the upset price. The grounds upon whichthe petitioner attacked the sale were also unsubstantial. But yet, I thinkthe sale should be set aside on the ground that section 8 of the PartitionOrdinance was not complied with. The upset price should have beenRs. 375, which was the figure found by the Commissioner to be a ‘ justvaluation ’. There had been no other valuation by the Commissioner tosupersede his first valuation. There is no provision in the Ordinance for arevaluation. But then there is no provision in it for setting aside a saleonce it has taken place, and yet there are a number of cases in which ithas been held that a sale under section 8 is liable to be set aside forsubstantial irregularity and unfairness. Likewise, I take it, it will beopen to a Court to order a fresh valuation in appropriate cases. No suchrevaluation by the Commissioner at the direction of the Court took placein this case. What happened was that the Court and some of the partiesagreed to substitute for the ‘ just valuation ’ of the Commissioner theprice fetched at the first sale. Now this price cannot be said to benecessarily a just valuation. It is possible that that was the pricerealized on that occasion as a result of some keen bidding between twocompetitors for reasons of their own—and to adopt such a price for the‘ upset ’ at the sale among co-owners would be to deprive them of theopportunity of becoming purchasers. I, therefore, am of opinion that thesale of this lot should be set aside and a fresh sale held after proper noticehas been given and after the Commissioner has made a just valuationanew. I think this is desirable in view of the length of time that haselapsed since the first valuation. I am also of opinion that the order forcosts made by the District Judge is wrong. I do not see why the secondrespondent and the Commissioner should be made to pay costs. If theCommissioner is to blame in this matter, I think the Court is equally toblame for not scrutinizing the conditions of sale and making its directionsclear to the Commissioner.
I think the most equitable order regarding costs is that the petitionershould pay the first respondent, i.e., the seventeenth defendant, his costsof the inquiry, for although the sale is set aside, it is not for any of thereasons urged by the petitioner. I would dismiss the appeal, but makeno order as to the costs of appeal.
Koch J.—I agree.
SAMARASINGHE v. WICKREMESINGHE