Ramchandra Raut & Ors Vs. Mahadevo Vasudeo Joshi & Ors  INSC 397
(20 December 1990)
T.K. (J) Thommen, T.K. (J) Sahai, R.M. (J)
1991 AIR 700 1990 SCR Supl. (3) 577 1991 SCC Supl. (1) 321 JT 1991 (1) 19 1990
Act, 1893: Sections 2 and 3--Partition suit--Properties incapable of division
by metes and bounds Plaintiffs prayer for its sale and distribution of the
proceeds--Defendants willing to buy.
shares--Determination of valuation of plain- tiff's shares --What is relevant
date--Is it when the de- fendants sought leave of the court to buy plaintiffs'
shares or the date of the preliminary decree declaring the shares of the
respondents filed a suit for partition claiming together 2/3rd share while
admitting that the defendants together held 1/3rd share in the suit properties.
It was pleaded by the plaintiffs that the suit properties could not be
reasonably and conveniently divided and therefore had made a prayer for its
sale and distribution of the proceeds amongst the shareholders. The defendants proposed
to buy at a valuation the 2/3rd shares held by the plaintiffs and accordingly
made a request to the court under section 3 of the Act to direct a valuation of
the same. The plaintiffs tried to backtrack by asking for amendment of their
plaint to delete their averment that the properties could not be reasonably and
conveniently divided and for its sale and distribution of the proceeds. This
was disallowed by the trial court and appeal preferred against this rejection
learned single judge of the High Court after notic- ing that there was no
dispute between the parties as regards their shares nor was there dispute any
longer that the properties were incapable of division by metes and bounds they
had to be sold and the proceeds distributed according to their shares. But the
defendants being willing and actu- ally having sought leave of the court to
purchase the shares of the plaintiffs at a valuation, those shares had to be
valued as on the date leave to purchase was sought by them.
therefore, directed valuation of the properties so that shares of the
plaintiffs could be sold to defendants. The plaintiffs took an appeal before
the Division Bench which held that the present appellants who claimed to be the
legal representatives of the original defendants, had first to obtain probate
or letters of administra- 578 tion and thereafter a preliminary decree
declaring the shares of the parties has to be passed and the valuation of the
properties would have to be made with reference to the date of such preliminary
defendants have come in appeal challenging the correctness of this decision.
Allowing the appeal, setting aside the judgment of the Division Bench and
restoring that of the single judge, this Court,
It is the duty of the Courts to order the valua- tion of the shares of the
party asking for a sale of the property under Section 2 and to offer to sell
the shares of such party to the shareholders applying for leave to buy them in
terms of section 3 at the price determined upon such valuation. As soon as a
request for sale is made by a share- holder under Section 2, any other
shareholder becomes imme- diately entitled to make an application under Section
3 for leave to buy the shares of the former. The right to buy having thus
arisen and become crystallised, the date with reference to which valuation of
the shares in question has to be made is the date on which the right arose.
[581C-D] The fact that legal representatives representing the estate of a
deceased defendant had not yet obtained probate or letters of administration
did not mean that the right which arose in favour of that defendant during his
life when he sought leave under section 3 did not accrue to the bene- fit of
his estate, but was postponed till they obtained probate or letter of
administration. This right came to he vested in his estate. The valuation of
the shares has to he made as on the date of accrual of the right and valuation
being a fact finding process must be resorted to as soon as possible after such
accrual. [581E-G] Whenever the shares in question in the properties come to be
sold to the persons entitled to buy them under section 3, the price of those
shares will have to be determined on the basis of the valuation made with
reference to the time of accrual of the right. [582C] R. Ramatnunhi Iyer v.
Raja V. Rajeswara Rao,  2 SCC 721 at p. 727, followed.