090-NLR-NLR-V-43-WARNASURIYA-v.-WICKREMESINGHE.pdf
KEUNEMAN J.—Wamasuriya v. Wickremesinghe.399
1942Present: Keuneman and Cannon JJ.
WARNASURIYA v. WICKREMESINGHE118—D. C. Tangalla, 4,513.
Constructive trust—Sale of property in execution of mortgage decree—Purchasby nominee of judgment-creditor—No sanction of Court—Action fordeclaration of trust—Civil Procedure Code, s. 272.
Where the plaintiff in a mortgage action, in execution of his decree,bought the mortgaged premises through a nominee at a price less thanthe appraised value in order to circumvent the requirements of section272 of the Civil Procedure Code,—
Held, that he was not entitled to a declaration that the property wasbought in trust for him.
PPEAL from a judgment of the District Judge of Tangalla.
H. V. Perera, K.C. (with him L. A. Rajapakse and S. W. Jayasuriya),for defendant, appellant.
N. E. Weerasooria, K.C. (with him Cyril E. S. Perera), for plaintiff,respondent.
■ Cur. adv. vult.
May 27, 1942. Keuneman J.—
In this case the plaintiff claimed that the defendant, the legal owner ofthe lands, ih question, was holding them for him under a constructivetrust.
The plaintiff was the mortgagee of these premises, and sued under hismortgage and obtained mortgage decree. The premises in questionwere sold under the decree by the Fiscal, and defendant purchased andobtained Fiscal’s Transfers. The plaintiff contends that, in making thepurchase, the defendant was merely his nominee, and that the purchaseprice was provided by the plaintiff. These facts have been acceptedby the District Judge, and no reason has been shown to us why thatfinding should be reversed.v
As plaintiff unfolded his story it was clear that he did not apply for orobtain an order to bid under section 272 of the Civil Procedure 'Code.It was contended for the plaintiff that he was not aware of any banon his purchase of the property. But I do not read the evidence in thatway. In answer to Court the plaintiff said, “ I got no sanction fromCourt to bid at the sales. I did not know such a thing ’was possible.”I think this means that the plaintiff thought that he could not buy th$property under any circumstance, and that not even the Court couldsanction such a proceeding. There is rio evidence by the plaintiff thathe did not know he was debarred by any rule of law from purchasing theproperty. Plaintiff admits that one of the reasons why he got thedefendant to buy the lands was because he wanted to purchase themat less than the appraised value.
The relevant portion of section 272 runs as follows: —
A holder of a decree in execution of which property is sold may,with the previous sanction of and subject to such terms as to creditbeing given him by the Fiscal and otherwise as may be imposed by theCourt, bid for or purchase the property.”
400KEUNEMAN J.—Wamasuriya v. Wickremesinghe.
It is clear from this section that the condition, which entitles apurchaser to bid for and purchase the property in execution, is theobtaining of “ previous sanction ” by the Court. No other section hasbeen cited, nor have I found any other section which empowers adecree-holder to purchase. In the present case, it is clear that theplaintiff had not obtained such sanction, but, in spite of that, the plaintiffproceeded to attain this object by an indirect method. In view of this,the defendant argues that the plaintiff is not entitled to obtain theequitable relief which he now claims.
In my opinion, the present case falls within the ratio decidendi ofRamanathan Cheztiar v. Clementi Fernando and another and also ofEmee Nona v. Winson'. Certain earlier cases have been cited to us,viz., Silva v. Siyadoris Weeraman v. Silva4; and Samaranayake v.Dissanayakebut these cases have been fully considered in the judgmentof Macdonell C.J. in Ramanathan Chettiar v. dementi Fernando {supra),and for the reasons given by him I do not think these cases are of authorityto-day.
An attempt was made by the respondent to differentiate all these caseson the ground that in them the decree-holder had applied for and obtainedthe sanction of the Court to bid, and had subsequently acted in contra-vention of the terms of that sanction. I do not think this alters thepostion. A complete disregard of the authority of the Court is as seriousa matter as a partial recognition of the authority of the Court, and asubsequent disregard of its expressed order. The plaintiff in this case,,who was debarred by law from bidding.for and purchasing the property,has endeavoured to attain this object through the medium of anotherperson. The question, therefore, is whether the Court ought to give itsassistance to the plaintiff to achieve this purpose. I am of the opinionthat the Court should refuse to do so.
It has also been contended that the issues do not cover this aspect ofthe case. I .think the answer to this has been already given by MacdonellC.J.—
“ The issues framed at the trial did not raise the question of fraudand illegality, on which this appeal was argued to us, but that questionarises clearly from the pleadings and evidence and requires answer.It is this. Granted that the second defendant bought the land onplaintiff’s instructions to buy for him and with plaintiff’s money,and that the second defendant is, therefore, a constructive trustee ofthe land for plaintiff, is the trust one which this Court ought to enforce.”
In addition to this, I am of opinion that issue/ 3 framed in this case,whether in the event of defendant being held to be a trustee, the plaintiffis entitled to a transfer of the lands sufficiently raises this question.
It is also contended that there is no evidence of frauft in this caseon the part of the plaintiff, who merely acted in ignorance of the law.At the least in this case there was a wilful endeavour to evade1 by indirectmethods the prohibition against the plaintiff’s purchase of the property.
1 14 C. L. Rec. 170.* 35.N. L. R. 221.
5 23 N. L. R. 383.
3 1 C.W. R. 225.
• 22 N. L. R. 107.
401
Balawandaram v. Heenkende.
In Ramanathan Chettiar’s case, Macdonell C.J. put the matter in thisway. “ Apart from whether the judgment-debtor had been defrauded,there still remained the question whether the Court ought to give itsassistance to the plaintiff to enforce a bargain directly contraveningan order made by the Court itself.” I have already pointed out thatthe fact that it was not an order of the Court, which was contravened,does not affect the issue. This is a deliberate attempt to obtain anadvantage which the law does not permit.
There is, however, evidence in this .case that the judgment-debtor hasbeen defrauded. The property was sold by the Fiscal for a small amountand thereafter the plaintiff proceeded to seize a sum of Rs. 261.50 due tothe judgment-debtor in a Matara case, and still had a debt against thejudgment-debtor of over Rs. 1,000. Further, what I can only call thesham bidding at the Fiscal’s sale by the plaintiff’s Proctor and hisnominee at the instance of the plaintiff throws some light on the dishonestyof this transaction.
There is no necessity to deal with other arguments addressed to usby the respondent’s Counsel. They have all been answered in thejudgment in Ramanathan Chettiar’s case. The District Judge thoughtthat the authority of the decision in Ramanathan Chettiar’s case has beenaffected by the Full Court decision in Wijewardene v. Podisingho'.No argument has been addressed to' us on this point, and on a reading ofthat case I hold that this opinion of the District Judge is wrong.
The judgment of the District Judge is set aside and the appeal is allowed. with costs and the plaintiff’s action is dismissed with costs.
Cannon J.—I agree.
Appeal allowed.