PAUL BROTHERS (TAILORING DIVISION) AND ORS. ETC. v. ASHIM KUMAR MANDAL AND ORS. ETC

Citation: [1990] 2 S.C.R. 283

Court: Supreme Court of India

Bench: S. RANGANATHAN, V. RAMASWAMI

Case summary

So in the instant case, considering the materials and evid~nce and the records placed before the Court by the claimants/objectors, to prove that they are not stooges or false claimants but have·bona fide right to possession, it was held that the auction purchaser could not...

Judgment text

PAUL BROTHERS (TAILORING DIVISION) AND ORS. ETC. v. ASHIM KUMAR MANDAL AND ORS. ETC. APRIL 2, 1990 [S. RANGANATHAN AND V. RAMASWAMI, JJ. ] -y Practice and Procedure: Sanchaita case-Directions of Supreme Court explained. These appeals arose as a sequel to certain directions of this Court in the famous Sanchaita Investment Company case, which by dint of tremendous advertisement campaign collected deposits amounting to several crores of rupees from thousands of depositors spread all over India, The firm prospered and thereafter tied up and siphoned away a sizeable portion of its funds from its coffers for the benefit of the management personnel by acquiring movable and immovable properties in the names of the firm, relatives and benamidars. Then they started making defaults in its obligations to tbe depositors. The depositors approached the High Court and eventually the \ matter came up to this Court in 1983.

With a view to safeguard the interests of the depositors and ensure that the properties of the firm be duly identified and full and due benefit of the funds be diverted to its coffers, this Court by its order appointed a Commissioner to take - )> charge of all the assets, documents, papers of the firm, agents, sub-agents, transferees and benamidars. Further to enable the Commissioner to gather all the assets of the firm, he was given powers to attach all assets and properties which in his prima facie opinion are of the ownership of the firm or any of its partners. Such assets were to be put to sale if no objections are received there to within one month from the date of attachment. All objections thus received in respect of such properties were to be forwarded to the Prothonotary of Calcutta High Court, and a Division Bench of the High Court was to dispose of the objections on merits.

By a further order dated 23rd September, 1985 this Court empowered the Commissioner to remove all unauthorised persons or trespassers from possession of the property proposed to be sold, and lhe Commissioner to hand over vacant possession to the rightful purcbasers. One of the properties thus attached by the Commissioner by a public notice was house N. 52/1/IB Surendra Nath Banerjee Road, Calcutta. It was subsequently brought to sale on "as is and where is basis". Asit Kumar Mandal and two others purchased this property and requested the Commissioner to give them vacant possession. Since the sale was on "as is and where is basis", the Mandals moved an application before the High Court Division Bench praying for the vacant possession of the said property and the same was granted. Hence the appellants i. e.

Paul Bros and Others, moved two Special Leave Petitions in this Court and claimed that they were bona 0 fide tenants in the property even under the predecessors-in-interest of Mahamaya Devi in whose name the property was purchased by Sanchaita firm and therefore could be evicted only in accordance with due process of law after full contest, and could not be thrown out iu summary proceedings just as if they were persons in unauthorised possession of the property, or as if they were mere trespassers. On the other hand the Mandals contended that in terms of the orders of this Court, and of the Calcutta Division Bench they purchased the property only on the basis that they would get a perfect title and speedy possession. Allowing the Special Leave Petitions, this Court, HELD: That the contention of the Mandals is not maintainable either in principle or on the terms of the directions of this Court.

The attachment and sale in pursuance of this Court's order of the present property in question did not have the legal effect of invalidating any interests created or subsisting in the property by sale, transfer encumbrance or alienation prior to the attachment. Even the sale was on "as is and where is basis". The Courts order of 27th September, ~ 1983 only empowered the Commissioner to remove all unauthorised H" persons and trespassers but persons who are in lawful possession of the PAUL BROS. v. A. K. MANDAL 285 , property could not be evicted forcibly or summarily. The said order ~ could not be interpreted to mean that the purchasers would be entitled to vacant possession through the commissioner even by evicting bona fide tenants or other encumbrancer or independent out-siders who had acquired interest for consideration in the property. The object of the directions was to cut short the proliferation of litigation and to gather in expeditiously the assets of Sanchaita.

[l'llD-E; 29SH; 296B] Having regard to the large scale dealings, the special circumstances and the desperate situation, the Court made an exception and made it possible for the Commissioner to get false and frivolous claimants out of the way by a quick procedure because even normally the trespassers and unauthorised persons cannot be thrown out except by recourse to legal proceedings. So this order could not be availed of to ride rough-shod over the rights and interests of others in the properties which had been created bona fide. Even third parties who have acquired real interests in the property either independent of, or even through Sanchaita could not be called upon to give up their rights which would mean to do more than merely realise what rightfully belongs to Sanchaita that is by conferring a better title than it had in fact acquired while purchasing those properties.

[297B, GI So in the instant case, considering the materials and evid~nce and the records placed before the Court by the claimants/objectors, to prove that they are not stooges or false claimants but have·bona fide right to possession, it was held that the auction purchaser could not evict Paul Brothers and Phani Bhushan Ghose except eviction proceedings in the normal course and in accordance with law as may be available to them against the claimants/objectors. The claim's of the other appellant was rejected. [297C-DI CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1755- 56 of 1990. From the Judgment and Order dated 9. 2. 1989 of the Calcutta ,;;ii. , High Court in Matter No. 3737 of 1987. Dr. Shankar Ghosh, C. S. Vaidyanathan, S. R. Setia, K. V. Vis- wanathan and A. K. Sil for the Appellants. S. K. Kapoor, P. K. Pillai D. K. Sinha, Mrs. R. Paul and H. K. Puri for the Respondents. The Judgment of the CouPt was delivered by RANGANATHAN, J. Leave granted.

These appeals arise as a sequel to certain directions of this Court in the famous Sanchaita case. The Sanchaita Investment Company was a firm which was controlled and run, primarily, by three persons Samonu Prasad Mukherjee, Biharial Murarka, and Swapan Kumar Guha. It had been able, by dint of a tremendous advertisement cam. Paign, to collect deposits amounting to several crores of rupees from thousands of depositors spread all over India by holding out attractive terms of interest. The firm initially prospered and its deposits steeply mounted to astromical figures. The firm, however, began to acquire, or deal in, movable and immovable properties in various cities of India in the names, not only of the firm, but of relatives and benamidars of various persons who were in management j its affairs.

A sizeable portion of the firm's funds being thus tied up or siphoned away from its coffers for the private benefit of the individuals running it, the firm eventually began making defaults in its obligations to the depositors. The depositors, thereupon, approached the High Court and eventually the matters came up to this Court in W. P. Nos. 638 and 755-800 of 1983. With a view to safeguard the interests . of the depositors, arrange for a return to them of as much of their deposits as possible and ensure that the properties of the firm were duly indentified and the full and due benefit of the funds diverted from its coffers was restored to the firm, this Court, by its order dated 4. 5. 83, appointed a retired District Judge as a Commissioner to take charge of all the assets, documents and papers of the firm and of its agents, sub-agents, transferees and benamidars. Directions were given to •.

the Commissioner to look into the claims of depositers and to devise a scheme whereby persons who had deposited sums not exceeding Rs. 25,000 could be repaid expeditiously. By a subsequent order dated 27. 9. 83, certain directions were given to enable the Commisioner to PAUL BROS. v. A. K. MANDAL [RANGANATHAN, J. J 287 gather in all the assets of the firm. It is necessary to quote a portion of ' this order. It read: "The Commissioner may attach such assets and properties which, in his prima facie opinion, are of the ownership of the firm Sanchaita Investments, or of the ownership of any of its partners. Such assets and properties may be put to sale by the Commissioner if no objection is received to the attachment thereof within one month of the date of attachment. All objections received to the attachment of such assets or properties will be forwarded by the Commissioner to the Prothonotary of the High Court of Calcutta.

We request the learned Chief Justice of the Calcutta High Court to nominate a Division Bench of the High Court for the purpose of jurisdiction upon such objections. The Division Bench will dispose of the objections on merits after hearing all interested parties. " Reference must also be made to another order of this Court dated 23. 9. 85 in C. M. P. No. 38589/85. By this order, this Court directed: "After hearing counsel for the parties we consider it necessary to empower the Commissioner, Sanchaita Investment, to remove all unauthorised persons and trespassers from possession of the property proposed to be sold by the Commissioner under the orders of this Court and to hand over vacant possession to the rightful purchaser~. The Commissioner is authorised to take the assistance of the police for the purpose of obtaining possession and handing it ov! 'r to the rightful purchasers.

" In pursuance of these directions, the Commissioner attached a large number of properties situate all over the country which, he had reason to believe, were properties which belonged to the firm though acquired in the names of others. When the properties were so attached and sought to be sold, objections were lodged by persons claiming title or possession. of the property in their own right and these objections were adjudi~ated upon by the designated Division Bench of the Calcutta High Court. One of the properties that were thus attahced by the Commissioner was house No. 52/1/lB, Surendra Nath Banerjee Road, Calcutta-14. (There is a slight discrepancy in the door number of this ) property as appearing in various documents but that is not material for our purposes). This property stood on land of the small extent of about 800 sq. ft.

and comprised of five rooms in the ground floor (three in front and two at the back), a first floor and a second floor but, being business premises in a busy commercial locality, is of considerable value today. The Commissioner found that this property had been -~ acquired in the name of Mahamaya Devi, an aunt of Sambhu Prasad Mukherjee, for Rs. 85,000 on 4. 10. 1977. Apparently the Commis- ~ sioner was of the opinion that the property was really that of the firm acquired in the name of Mahamaya Devi. He, therefore, attached this property by a public notice taken out, inter alia, in "The Statesman" dated 27. 5. 84 to. the following effect: "The Public are hereby informed that in exercise of the authority and power vested in me under the order of the Hon'ble Supreme Court of India passed and made on 4. 5. 83 and 27. 9. 83 .....

, I had attached or I had taken possession of or I am hereby taking possession of (as the case may be) the following properties (specified in the schedule below) including flats, lands, cars, launch, busil ness, shares in companies and partnership firms and house ,. j properties. The persons in which names these properties stand are hereby warned that they shall not lease out, assign, sell, mortgage, transfer or otherwise encumber or deal with them until further orders from me. · Anybody dealing with such properties would do so at his own risk or • 'responsibility. '' It appears that there were also other similar notices issued by the -A Commissioner. In response to one of these notices, Smt. Mahamaya Devi put forward her claim to the ownership of the property but her claim was rejected by the Division Bench of the Calcutta High Court on 29. 3. 1985 in Case No. 23 of 1984. Sri Kapur, learned counsel for the responde.

nts states that a petition for special leave to appeal to this Court preferred by her was also rejec;~d sometime in 1985. This is not contradicted by the petitioners. We may, therefore, proceed, for the :¥:: purposes of this case, on the footing that, though standing in the name of Mahamaya Devi, _the property in question belongs to the firm Sanchaita. PAUL BROS. v. A. K. MANDAL [RANGANATHAN, J. I 289 Subsequently the property was brought to sale by the Commissioner. Sealed tenders were invited for the purchase of the properties specified in the schedule, by a notice published in "The Statesman" on 7. 3. 86, on an "as is where is basis". The notice specifically mentions that the possession of only three of the six items mentioned in the notice was with the Commissioner and the property presently in question was not one of them. Asit Kumar Manda! and two others (the respondents before us, hereinafter compendiously referred to as 'the Mandals') offered, on 22. 5.

86, to purchase the property for -y Rs. 1,26,000 in lump sum subject to negotiations in the matter. They .. , undertook to deposit 25% of the price on the acceptance of the offer and the balance "at the time of giving us the physical possession of the said premises". After a discussion with the Commissioner, they deposited Rs. 31,500 on 11. 6. 1986 and stated in their letter of the same date to the Commissioner: "We shall deposit the balance amount as and when called upon to do so. Thereafter, you will hand over to us the possession of the said premises free from illegal trespassers"- On 12. 6. 86, the Commissioner accepted the offer of the Mandals subject to the following conditions, namely: "(a) That the proposed sale in your favour under the conditions mentioned herein below is approved by our advisory Board. - (b) That l/4th (i. e. Rs. 31,500) of the total consideration money is at once paid by you to the Commissioner, Sanchaita Investments, through bank draft or pay order.

(c) That the balance of the consideration money is paid within 30th June, 1986. (d) That in default of payment of the consideration money as stated above, the earnest money (Rs. 31,500) to be paid by you through bank draft or Pay Order as mentioned above shall stand forfeited. I (e) That the aforesaid sale is made on "as is where is basis". (f) That on payment of the full consideration money as above within the date fixed you may take steps for obtainmg possession of the said entire premises and the Commis· sioner will help you for the said purpose. " The Mandals, thereafter, paid Rs. 31,500 on 27 . 6. 86 and Rs. 63,000 on 18. 7. 86 and wrote to the Commissioner as follows: "Please sent us the draft sale certificate in respect of the above property for our approval on behalf of our clients and arrange immediately to give our clients vacant possession of the propeny as agreed upon. Please inform us if any objection was received by you.

in respect of the property pursuant to your advertisement in the Statesman dated March 7, 1986. " The Commissioner referred the purchasers to his lawyer in regard to the preparation of the sale certificate and a certificate of sale deed was eventually issued in favour of the Mandals on 10. 4. 1987. The certificate referred to the orders of the Supreme Court, the satisfaction of the Commissioner, the fact of attachment and the absence of any ob1ections from Mahamaya Devi and conveyed the property to the Manaals. --.... Having thus purchased the property, the Mandals requested the Commissioner to give them vacant possession of the property but there was no response. Thereupon, on 17. 9. 1987, the Mandals moved an application (being Matter No. 3737/87) before the High Court praying that they may be given vacant possession of the property. It appears that, in the meantime, they had come to know that the premises were occupied by the following parties: Nameofperson Portion occupied 1.

Paul Brothers"(Textile Division) One room on Ground Floor 2. Paul Brothers (Watch Repairing One room on Ground Floor Division) • ....... 3. Paul Brothers (Electronics -do- Division) 4. Dula! Dutta and Panchanan Dutta -do- 5. G. Dey -do- 6. Phani Bhusan Ghosh First Floor r 7. Hari Narayan Gupta Second Floor - These persons were made respondents to the application and, alleging that they were all trespassers in occupation of the property, a prayer was made that they should be directed to hand over vacant possession of the property to the applicants. This prayer has been granted by the Division Bench of the High Court and, hence, these two petitions for leave to appeal, one by the three Paul Bros. and the other by th. ree of the other four "objectors". We have he:~rd these petitions at great length. We grant leave in both S. L. Ps. and proceed to dispose of the appeals. The petitioners claim that they are bona fide tenants in the property. Except for petitioner H. N.

Gupta who was inducted as a tenant by Mahamaya Devi, the others claim that they have been tenants even under the predecessors-in-interest of Mahamaya Devi. They claun, therefore, that they can be evicted only in accordance with due procedure prescribed by law after full contest and opportunity to lead evidence and cannot be thrown out in summary proceedings like the present one just as if they were persons in unauthorised possession of the property or as if they were mere trespassers.

On the other hand, for the Mandals it is contended that once it is held that Mahamaya Devi was a benamidar for Sanchaita, the Commissioner is entitled to take possession of the property, removing all present occupants including tenants therein and selling the property at the maximum possible price free of all encubrances -so that the proceeds may be made available to the imnumerable depositors who had been denuded of their lifetime savings by the undesirable and fraudulent activities of the persons in charge of the firm. A pernicious evil, it is said, warrants a drastic remedy and hence this Court, having regard to the large scale involvements of the firm, considered it necessary to arm the Commissioner with wide powers so that he may be able to gather in all the real assets of the firm without delay or obstruction for the benefit of the defrauded investors.

The Mandals have, it is said, having regard to the terms of the orders passed by this Court and by the Calcutta High Court, purchased the property in the belief that they would not only get a perfect title but also speedy possession of the property. If hona fide purchaseFs are to be obstructed like this by all manner of claims, real or imaginary, it is argued, the properties of the firm can only be sold for a song and the entire object and purpose of the various directions of this Court would be frustrated. It is, therefore, contended that, even if the appellants are really tenants in the property as claimed, their claims will have to yield to the paramount public interest of the Sanchaita investors. We are unable to accept this contention of the Mandals. It is not maintainable either in principle or on the terms of the directions given by this Court.

To take up the latter first, there is nothing in the terms of the orders of this Court or of the notices of attachment or sale or of any other orders of the Calcutta High Court that vests an absolute title in the auction purchasers of the property free from all encumbrances. The order of the Court dated 27. 9. 83 only authorised the Commissioner to attach properties which he believed to belong to Sanchaita and provided for any objections to the attachment being heard by the designated Division Bench of the High Court. The attachment and sale of the property presently in question were effected in pursuance of this order. Any sale, transfer, encumbrance or alienation subsequent to the attachment could, no doubt, be impugned but the attachment did not have the legal effect of invalidating earlier interests of others subsisting in the property. In fact also, the sale was on an "as is, where is basis" i. e.

without prejudice to the claims of other persons in whose favour bona fide encumbrances or interests may have been created earlier qua the property. There appears to be some force in the contention of the claimants that the price paid by the appellant is not adequate to reflect the market value of the property situated in an important commercial locality in Calcutta at the present day if sold free from all encumbrances but we shall leave this contention out of account as there is no material before us on this aspect. The order of 23. 9. 85, no doubt, goes a step further but it only empowers the Commisioner to remove all unauthorised persons and trespassers.

The reference to vacant possession in the order has to be restricted only to cases where the property is in the possession of such unauthorised • persons or trespassers and cannot be read so as to empower the Commissioner to evict forcibly, or seek the orders of the Court to evict ~ summarily, persons who are in lawful possession of the property. We should also like to point out that, in fact also, the Mandals got no better right on the terms of the auction and the correspondence that followed. Though the Mandals referred in their letters to vacant possession of the property, the sale was only on an "as is, where is" basis and the Commissioner at no time offered or assured the Mandals that -y they would get such vacant possession. He only offered to help them in the process to the extent permissible in law. He has made this position 4 explicit in the letters written by him.

~ Sri Kapur, for the Mandals, placed considerable reliance on the common order of the Calcutta High Court dated 25. 3. 86 in Amar Monda/ v. Commissioner, (Matter No. 122 of 1986) andJagdish Chand ~ Aggarwala v. Commissioner, (Matter No. 146 of 1985) to contend that the Mandais are entitled to get vacant possession of the property. In that case, Amar Monda! who was the auction purchaser of an item of property (which we shall call 'Property A') at a sale by the Commissioner sought to be put into possession by evicting the respondents 2 to 5 "who are unauthrised occupants" and Jagdish Chand Aggarwala, whose highest bid at an auction for an item of property (which we shall call 'Property B') by the Commissioner could not be proceeded with i,. ,. ~ because of an injuction obtained by respondents Nos. 6 & 7, sought the orders of the Court "for completing the sale and giving delivery of possession by evicting the respondents".

So far as Property A is concemed, the Court found, for reasons which need not be repeated here, that they were "unauthorised occupants" and not "bona fide tenants in >occupation" and were, hence liable to be evicted. Likewise, in respect of Property B, the Court concluded that the cliams of tenancy put forwarel by respondents 6 & 7 "were frivolous". These were, there- ~- fore, not cases where tenants were held liable to be evicted and the order does not help the Manda/s to the extent claimed. Sri Kapur, however, relies strongly on two sets of observations in this order. The first reference by him is to an observation that any person claiming to have any interest in the property should file his claim within 30 days of the attachment and that any claim made beyond this period would be barred by limitation and hence cannot be -considered. The second reference is to an observation that the Court is 294 SUPRF. ME COURT REPORTS [1990] 2 S. C. R.

entitled to adjudicate upon all claims, even those of persons who claim to have any bona fide intermediate interests in the properties attached by the Commissioner. The Court observed: "In our opinion, therefore, once an attachment is effected by the Commissioner on the authority of his powers vested in him by the Supreme Court, not only persons claiming right, title and interest independent of Sanchaita Investments but also claiming any bona fide intermediate interest created by Sanchaita Investments in favour of the claimant should put forward to claim of objection. It was not the intention of the Supreme Court that there should be proliferation of litigation, result whereof would be that the insignificant part of the depositors' money which should be realised by the Commissioner would be wasted in litigation.

This position has been made clear by the Supreme Court when the Supreme · Court by a recent order upheld the view of the Bombay High Court that a claim of tenancy in respect of a property attached by the Commissioner must be lodged with this Special Bench and not before any ordinary Civil Court. The attachment made by the Commissioner cannot be equated with an attachment made by a Civil Court either prior to judgment or in execution since there what is attached is the right, title and interest of either the defendant on the judgment debtor. In the present case, however, on the Scheme framed by the Supreme Court what is being attached is the property itself so that any body having any lawful claim in whatever interesfheld by him, must put forward his claim before the Commissioner so that it can be adjudicated once for all in a proceeding before this Special Bench and thus avoid wasting litigation.

We do not accept for a moment that this court's jurisdiction is limited to adjudication of all ·claims preferred as against the attachment made by the Commissioner. The scope of our power must be determined wit~ reference to the intention of the Supreme Court referred to herein. Such power in our opinion covers adjudication of all sorts of claims or objections for the Commissioner's·attachment and sales of assets belonging to the beneficial ownership of Sanchaita Investment preferred or brought forward at any stage and also to make all inci· dental and consequential oraers as we may find necessary to assist the Commissioner in collecting the assets having regard to the resistance faced by him from persons putting forward any claim of his own. In that view we hold that our power covers a case like the present one where even after the objection has been overruled by this Court, others have come forward to resist the Commissioner from effecting sale by putting forward a claim of tenancy.

Such a claim in our opinion, is really an objection to the attachment when we consider it on its substance, that comes well within tjJ. e scope of our jurisdiction. It matters little whether such jurisdiction is invoked by the Commissioner or the claimant or the proposed purchaser. " He submitted, on the stren_gth of these passages, that the claims in the ~ pn;:sent case are liable to be dismissed (a) on the ground that they are time barred and (b) even if the claimants are found to be bona fide tenants in the property. We are unable to agree. While, no doubt, this Court had indicated that claims and objections to attachments should be filed within a period of thirty days, that period cannot be read as if were a rigid rule of limitation prescribed by law. The order also only says that, if - "'-· objections are not put forward within a month, the property inay be sold and does . not preclude objections being filed after the sale.

Indeed, the Division Bench did not rest its conclusion on this ground and proceeded to consider the objections on merits. We are also unable to read into the order any conclusion of the Division Bench that even bona fide tenants are liable to be evicted from the property. If that had been so, the Bench need not have gone into a detailed consideration of the merits of the claim of tenancy put forward by· the - _. Jo. ___ contesting respondents in that case. All that the Bench observed in the passage extracted above was that all claimants to the properties subjected to attachment by the Commissioner, whether as owners or as intermediate interest holders (like tenants) or otherwise, have to put forward their claims for adjudication by the Division Bench.

The Bench did not proceed to hold, as suggested by Sri Kapur, that the auction purchasers are entitled to get vacant possession of the property free from all encumbrances and that even bona fide tenants can be directed to be summarily evicted from the property in pursuance of the orders of this Court. We are unable to see in this order any observation that could legitimately have induced the Mandals to believe that they would be entitled to evict even lawful tenants from the property by purchasing it at the auction sale. In principle also, thi• contention is not well founded. The object of the directions given by this Court was to cut short the proliferation of litigation and to ensure that the Commissioner is abk to gather in . expeditiously the assets of Sanchaita which were dissipated or siphoned off by the persons in charge of the firm.

Thus, if the firm's moneys had been utilised to purchase properties in the name of various individuals benami such property had to be taken back by the Commissioner from such benamidars. Also, where the said benamidars or other persons put up frivolous claims to the property or its possession without the semblance of any legal title to its ownership or possession, such claims could and should be rejected by the Court. But this principie cannot apply to bona fide interests of others in the property. For instance, suppose Sanchaita's moneys had been advanced on the mortgage of an item of immovable property, all that the Commissioner would be entitled, legally and equitably, would be to call in the mortgage moneys (principal and interest) and not the entire property itself. An auction purchaser of such a property cannot get anything higher than the interest Sanchaita itself could have claimed in respect of the property.

Likewise, if Sanchiata's moneys had been invested in a property which had been bona fide let out to tenants, Sanchaita would have paid only the value of the property so encumbered and its rights in the property can only be subject to those tenancy rights. Sanchaita could not have a right in respect of the property superior to that which its vendor had. Similar would be the position where Sanchaita or its benamidars had, after acquiring a property, created a bona fide tenancy or other encumbrance in respect of that property, in respect of independant outsiders who acquire such interest for consideration. To say that Sarichaita, through the Commissioner, would be entitled to vacant possession even from such tenants, or free from such encumbrances, would result in its being able to realise a larger interest in the property than it acquired. Not only this, the result of any such conclusion would enure the benefit of, not Sanchaita, but of the auction purchaser of the property.

Having bid for and acquired the right, title and interest of Sanchaita in the property, he would be enable to get vacant possession which Sanchiata, even if it had continued to be active and properous, could not have got except by due process of law. PAUL BROS. v. A. K. MANDAL IRANGANATHAN, J. J 297 We have, therefore, no doubt \hat this Court, by its orders dated 4. 5. 83 and 27. 9. 83 intended only that the firm, or the auction purchasers at the sales effected by the Commissioners, should be able to clear the property of trespassers and unauthorised persons and not that even bona fide tenants could be got evicted straight away in pursuance thereof.

Normally, even trespassers and uuauthorised persons cannot be thrown out except by recourse to legal proceedings but, having regard to the large scale dealings, the special circumstances and the desperate situation, this Court made an exception and made it possible for the Commissioner to get false and frivolous claimants out of the way by a quick procedure but nothing more. We are, therefore, of opinion that if the Court, on a consideration of the materials placed by the claimants or objectors, comes to the conclu- sion that they are not mere stooges or false claimants but have a bona fide right to possession as against Sanchaita, it cannot direct their eviction but should leave it to the auctioin purchaser to initiate such eviction proceedings in the normal course and in accordance with law, as may be available to him against the claimants/objectors.

Sri Kapm laid considerable stress on the aspect that, unless vacant possess10n can be had, no one will purchase any property at the auction sales conducted by the Commissioner as no one would like to face further litigation to secure possession of the property. He submitted that the object which the Court had in mind was to effectuate sales of Sanchaita properties by assuring vacant possession with a view to secure maximum price therefor and to ensure expeditious return to the Sanchaita investors of as much of their deposits as possible and that this object would be totally frustrated if people were encouraged to put in hurdles in the way which will depreciate the value of the property. This contention proceeds, only partially, on a correct basis. It is true that there should be a quick and expeditious realisation of the .... >-properties that really belong to Sanchaita.

That is why the Court empowered the Commissioner to attach and sell properties that, in his opinion, really belong to Sanchaita though ostensibly held in the names of others and also devised a quick and summary method for adjudication upon claims and removal of obstructions. But this order cannot be availed of to ride rough-shod over the rights and interests of others in the properties which have been created bona fide. Third parties who have acquired real interests in the property, either independent of, or even through, Sanchaita cannot be called upon to give up their rights. To do so would be to do more than merely realise what rightfully belongs to Sanchaitas; it would amount to conferring on • Sanchaita a better title than it had, in fact, acquired. The depositors or investors in Sanchaita cannot claim any such rights.

It is, therefore, -rdifficult to accepf the ground urged by Sri Kapoor as entitling the Mandals to an interest that can ignore or override all manner of rights and interests in the auctioned properties. For the above reasons, we are unable to accept the plea that the Mandals are entitled to get vacant possession of the premises, irrespec- -·tive of the nature of the interests the claimants had therein and that, ):. on this ground alone, we should uphold the order of the Division Bench. We shall, therefore, proceed to consider how far the claim of each one of the appellants before us to continue in possession of the property, unless and until evicted in due course by process of law, is maintainable. 4 Though the High Court has set out in extenso the details of the claims put forward by the various claimants, we consider it necessa.

ry to set out, in some detail, the evidence put forward by the claimants as the principal complaint of every one of the claimants is that a considerable volume of evidence adduced by him has been summarily brushed aside by the Division Bench. We shall, therefore, proceed to do this: - ) - I. PAUL BROTHERS The petitioners in SLP 3258/59 have described themselves as "Paul Brothers". A complete paper book containing copies of a "' number of documents has been placed before us to substantiate their claim that they have been tenants in the premises since a very long ( . ~ """ time. These are: "(1) A letter addressed by one Ramakrishna Paul to Dilip Kumar Paul and Mihir Kumar Paul, Landlords, seeking permission to make some alterations in the Radio and Electrical shop and a reply thereto dated 8. 4. 75 by Dilip and a similar reply to Amar Nath Paul (Paul Brothers) in respect of the watch repairing shop; PAUL BROS. v. A. K. MANDAL [RANGANATifAN, J.

] 299 (2) A letter intimating "Amar Nath Paul (Paul Bros. ), Repairing Shop" that Satyanarayan Paul had died on 10. 8. 66 and that the four signatories AshoK Paul, Dilip Kumar Paul, Mihir Kumar Paul and Mrs. Suchitra Kundu had succeeded as landlords entitled to the rents thereafter; (3)(a) A stamped deed of partnership dated 14. 6. 61 drawn up by B. M. Motilal. Advocate, between Amar Nath Paul, Robindra Nath Paul. Abani Bhushan Paul. Arnn Kumar Paul, Kiron Chandra Paul and Gopal Chandra Paul (all sons of Mohni Mohan Paul) sharing profits equally. The firm is said to have started business in Watch Repairing and - Tailoring w. e. f. 14. 4. 61 at the suit premises under the name and style of Paul Bros. and is said to have been registered with the Registrar of Firms. (b) Three stamped deeds of partnership drawn by B. M. Motilal (Advocate) and dated 25. 4. 75 have also been produced.

The first of these, of Paul Brothers (Watch Division), Amar Nath Paul, Robindra Nath Paul, shows Abani Bhushan Paul and Rama Kishore Paul (sons of Mohni Mohan Paul) as having started and been carrying on business as watch d"alers and repairers since 15. 4. 74 in the premises sharing profits equally without a formal deed till then. The second is of Paul Brothers (Radio and Electrical Division) in which Kiron Chandra Paul, Amiya Kumar Paul, Samir Kumar Paul, Amar Nath Paul (sons of Mohni Mohan Paul) and Shyama Ranjan Paul (son of Lalit Mohan Paul) are partners with Amar Nath having a 10% share and the others 22. 5% share each. fhe deed recites that the above partnership started a business in radio and electricals on 15. 4. 74 at the suit premises as well as at 195/l, Mahatma Gandhi Road, Calcutta without a formal deed having been drawn up till that date. The third deed is between Arnn .

· Kumar Paul, Benoy Kumar Paul, Gopal Chandra Paul and Amar Nath Paul (all sons of Mohni Mohan Paul) in respect of Paul Brothers-Tailoring Division with Amar Nath Paul having a 10% share and the others 30% each. This deed also recites that the business had started earlier with effect from 15. 4. 74 but that no formal deed had been drawn up till then. (c) A deed of partnership dated 8. 5. 1980, also on stamp paper and witnessed by B. M. Motilal, is between Kirall Chandra Paul, Amiya Kumar Paul, Samir Kumar Paul (sons of Mohni Mohan Paul) and Promotho Nath Paul (son of Lalit Mohan Paul). By this deed Shama Ranjan and Amar Nath retire from Paul Brothers-Radio and Electri· cals w. e. f. 13. 4. 80 leaving the remaining four to share the profits equally. (4) More than 225 rent receipts in favour of "Amar Nath Paul", "Amar Nath Paul and others'', or "Amar Nath Paul (Paul Brothers)" have been produced.

They are spread over the period from 1962 to November 1987 (except October 1965 to March 1968). They are signed by S. N. Pal between May 1962 and September 1965, by Ashok Paul between April 1968 and October 1971, by Dilip and Mihir between October 1971 and September 1977 and by Mahamaya Devi from October 1977 onwards. Rent receipts from April 1962 to September 1987 in favour of "Amar Nath Paul", "Amar Nath Paul (P. ;i. ul Bros. ) Watch Makers Shop" have been produced. Also copies of rent receipts in favour of "Ramkrishna Paul", "Ramakrishna Paul and others" in respect of one shop room in the north west corner covering the period from March 1974 onwards signed by Dilip and Mihir and Mahamaya Devi are also produced. (5) Rent receipts and a deposit receipt showing that a third shop situated in the north west corner of the ground floor, previously occupied by one Tarak Nath Roy, was taken. over by the Paul Bros. at a rent ofRs. 75 p. m.

in December 1973 after purchasing the assets of the earlier tenant for Rs. 200. (6) Three electricity bills of October '69, January '75 and PAUL BROS. v. A. K. MANDAL IRANGANATHAN, J. } 301 May '88 in respect of the premises issued in the name of • one D. P. Paul, claimed to be an uncle of the Pauls and Electricity bills in_ the name of . Paul Bros Radio Division of April '80 and April '88 have also been produced. (7) Three telephone bills of 1969, 1973 and 1977 in the name of Paul Brothers (and three electricity bills of March '74, March '77 and February '88 in the name of Tarak Nath Roy) have been produced. (8) Receipts dated 2. 5. 61, 10. 5. 62, 7. 5. 63, 25. 3. 72 and 28. 12. 87 by the Corporation of Calcutta being fees in respect of the Tailoring Shop in the premises for the years 1961-62, 1962-63, 1963-64, 1971-72 and 1987-88 in favourof Paul Bros. (Partners Sri Arnn Kumar Paul and others).

Corporation Receipts (18 in number) for trade licence fees in respect of radio and watch business carried on in the premises covering the years 1962-63 to 1987-88 (except 1984-85, 1981-82, 1980-81, 1975-76, 1972-73 and 1971-72) in the name of Paul Bros. are produced. These describe the partners of the firm differently as "Amiya Paul and others", "Arnn Kumar Paul and others" and "Amar Nath Paul and others" 7 fee receipts for trade licences issued to the watch division of Paul Bros. covering the years 1987-88, 1986-87, 1985-86, 1983-84, 1982-83, 1981-82, 1980-81, 1979-80, 1978-79, 1977-78, 1976-77, 1975-76 and 1974-75 describe the partners as "Rabindra Nath Paul and others". There are also fee receipts in respect of licence fees for the years 1961-62, 1971-72, 1972-73, 1987-88 in respect of the watch repairing shop in the name of "Paul Bros. (Amar Nath Paul & Others)". (9) A letter dated 17. 7.

70 addressed by the Government of West Bengal to the Accountant General, copy endorsed to Mis Paul Brothers at the address of the suit premises and other correspondence between 1970 and 1973 with the tailoring division of the said firm at the same address. Copies of two letters addressed to the radio and watches shop of Paul Bros. at this address between July 1965 have also been produced. • (10) Challans for payment of self-assessment tax of Rs .. 190 for assessment year 1976-77 by Paul Brothers (Tailoring Division) on 12. 8. 76 from this address. Also produced are certificates from the Income Tax Department that the three ; .. Paul Bros. at the above address are being assessed to -vincome tax since assessment year 1975-76/1976-77. ... ,. _.. (11) Orders u/s 158 and demand notices u/s 156 of the Income-tax Act in respect of assessment years 1969-70, L 1968-69, 1967-68 have been produced, the former of which ~ evidences the constitution of Paul Bros.

A declaration have io _,,(_ been filed before a Presidency Magistrate, Calcutta, on 26. 8. 65 by some of the Pauls referred to above to the effect that they are the partners in the firm from 14. 4. 61 and that they have filed income-tax returns for three years. The declaration also states: "2. That we have been carrying on business as tailors, watch repairers and sellers of cut piece cloth and watches from ! st day of Baisakh, 1368 B. S. and also we have started radio manufacturing/sales/service department from second year of our business i. e. 1369 B. S. We have no other business save and except those mentioned in this paragraph, this is true to our knowledge". ' (12) . Documents showing the registration of the following firms with the Registrar of Firms: Date Firm 10. 1. 74 Paul Bros. (Watch) Division) 10. 6. '.! ilPaul Bros.. (Radio and Electrical Division) 20. 9. 61 Paul Bros. PAUL BROS. v. A. K. MANDAL IRANGANATHAN, J. ] 303 (13) A central excise licence dated 20. I.

1965 and a postal department licence of 24. 8. 62 in respect of the radio and electrical shop in the name of Paul Bros. with Shri Kiran Chandra Paul as a partner. (14) Several letters, notices, receipts etc. from the Incometax Department and Central Excise Department as well as correspondence from the Life Insurance Corporation of -y India and premium receipts have been produced but these i are not of much help except to show that they were addressed to Paul Bros. or Arun Kumar Paul or Rabindra Kumar ,- Paul or Amar Nath Paul or A. K. Paul or Amarendra Nath Paul and others or Abani Bhushan Paul or Kiran Chandra Paul, or Gopal Chandra Paul at the suit premises. (15) Extracts from the assessment registers of the Corporation of Calcutta for two years. The first of these shows the name of the owner as Avamoyee Paul and that of the occupier as Taraknath Roy and others. Endorsements thereon show the calculation of the annual value on the basis of the following rents: \...... Rs. p. m. "!

Tarak Nath Roy 25. 00 Panchanan Dutta 25. 00 (Watch Shop) 41. 00 ). (Tailoring Shop) 44. 00 7. 50 7. 50 ~ J.. _ II Phani ,Bhusan Ghose 45. 00 III Owner 45. 00 240. 00" ---- -_}( The second of these documents shows the name of the owner as "Estate of Avamoyee Paul Clo Shri Mihir Paul . .. attempted to be proved by producing even an affidavit from Dilip or Mihir or Prabir Kar. Even an affidavit from Mahamaya Devi is conspicuous by its absence. Above all, says Sri Kapur, the case of the claimants regarding the constitution and nature of business of Paul ,, Bros. and the evidence in support thereof as put forward at various stages bristles with inaccuracies and inconsistencies which justify its rejection. These were pointed out before the High Court in detail and have been set out in the judgment. Some of these are as follows: - > (1) The business has sometimes been described as one business (SLP and affidavit of 2. 11. 88,) and sometimes (affidavit of 14. 11.

87) as separate businesses with separate partners and separate deeds of partnership. The date of commencement of each of these businesses have been set out differently in the different affidavits and go back to 1958, 1959, 1962, and 1973. -""' These do not talks with the partnership deeds of 1974 which shows the businesses as having started only on 15. 4. 74 which in turn, is belied by the ;iroduction of a deed of 1961. The names of the partners are also not given consistently. While Ramakrishna Paul is a partner of the radio and tailoring firms as per the affidavit of 2. 7. 88, he is not one as per the affidavit of 14. 11. 87. So also K. C. Paul is a partner of the tailoring firm according·to t},;. e 1988 affidavit but is not, according to the earlier one; (2) In the affidavit dated 14. 11. 87, the claimants had stated that they had been able to locate, after great effort, a few municipal trade licences and produced eight of them.

But lat11r, with the second affidavit, they produced a few more. How this has been done has not been explained; (3) It is not explained how the electricity bills stand in the name of Taraknath Roy and D. P. Paul and how the electricity bill in the name of Paul Brothers dated 13. 3. 80 shows an electricity connection having been obtained for the premises only on that date though the claimants were said to have been running the business there since 1973; (4) The telephone bills again are not helpful. They contain the name of one M. S. Paul for which no explanation has been given. One of the bills shows the installation of telephone in the premises even in 1958 though according to the claimants the business in the premises started earliest, only in 1959. Also the bills give the number of the premises as No.

52/1/l and not 52/1/lB; (5) The rent receipts have been produced in driblets-six with the affidavit of 1987 and 44 with the affidavit of July 1988-while with the SLP only 17 rent receipts have been annexed. Some of the receipts date back earlier than 1974 though 0 according to the partnership deeds, the business of the firms commenced only in April 1974. The rent receipts bear almost continuous serial numbers. There are several discrepancies: for example, a receipt dated 6. 8. 77 bears no. 59 whereas one dated 10. 6. 77 bears no. 60 and there are two rent receipts for July 1977. The rent receipts in favour of Paul Bros. (Electricals) are in the PAUL BROS. v. A. K. MANDAL [RANGANA1HAN, J. ] 315 name of R. K. Paul who is not a partner therein according to the deed and who is referred to in the Corporation records as a goldsmith. There is no rent receipt from Avamoyee Paul or her estate and Satyanarayan Paul, Ashok Paul, Dilip Paul or Mihir Paul are not recorded as owners.

There is not a single affidavit by any of the signatories to the receipts vouching for their genuineness; (6) There is no effort by these three or the other claimants to pay the rents, after the attachment of the premises, either to the Commissioner or to the Mandals. Their case that they did not know about the attachments was false; (7) There is no difference between the case of the claimants in the cases of Amar Manda! and Jagdish Prasad Agarwalla and that of the various claimants herein. 6 We have carefully considered the contentions of the parties. It is true that, some of the grounds of criticism of the evidence produced by the claimants are valid. A certain amount of difficulty has been caused by the uncertainty as the natu_re of the proceedings conducted by the High Court in pursuance of the order of this Court.

It appears that the Court has produced to consider the issues in a summary manner on the basis of the affidavits of the claimants and on prima facie consideration of the documents formally as well as informally produced in support thereof. The enquiry has been somewhat analogous to the procedure which used to be adopted in disposing of petitions by obstructors under the Code of Civil Procedure, 1908, ·(before its amendment in 1976) which concluded in a tentative finding leaving it open to the parties to file a suit and establish their right to possession. On the other hand, if these are taken to be in the nature of proceedings for the execution of a decree under the amended code, there will have to be a more detailed trial with full opportunity to parties to lead evidence and to examine and cross-examine witnesses, as a finding reached in these proceedings would be final and conclusive. In the present case, the application has been disposed of somewhat summarily and informally.

At one stage, therefore, we were inclined to think that the matter, so far as the Pauls are concerned, should be remanded to the High Court for fresh disposal. But, on further consideration, we have come to the [1990] 2 S. C. R. conclusion tnat there is sufficient material placed on record oy the claimants to show that Paul Bros. have been in the premises as tenants since long aud that no such remand 1s necessary. Taking all the docu- r ments collectively, it is difficult tn say that one could reasonably arrive at the conclusion that the Pauls were trespassers or unauthorised occupants. The Mandals have doue nothing positive to establish this but to barely deny the genuineness of the various documents put forward on behalf of the claimants. y- One direct piece of evidence i . -