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Mahpal Bahadur Singh Vs. Beni Shankar Shelhat and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad High Court
Decided On
Judge
Reported in(1887)ILR9All480
AppellantMahpal Bahadur Singh
RespondentBeni Shankar Shelhat and ors.
Excerpt:
pre-emption - co-sharers--recorded co-sharers--benami purchase of shares--sale by co-sharer--claim for pre-emption resisted by person alleging himself to be co-sharer by virtue of benami transaction--equitable estoppel. - - but we may add that even if there had been better reason for thinking that the purchases of the tiwaris in 1873 and 1882 had been benami for the defendants, we should have hesitated very much in holding that such covert and undisclosed interests in an estate should be regarded as the co-sharership therein contemplated by the wajib-ul-arz provisions and the muhammadan law in respect to the right of pre-emption. but it appears to us that it would be unjust from many points of view to allow an otherwise unquestionable right of pre-emption to be defeated by a stranger..........they contend that on various occasions they purchased shares in the farzi names of their gomashta bisheshar tiwari and his brother baldeo tiwari. for example, they allege that on the 20th december 1873, in execution of a decree obtained on the 29th march 1866, by bisheshar tiwari against babus ram narain singh and jagdeo bahadur singh, they bought these judgment-debtors' shares in chainpur, pal chandbha, and karsand. again, on the 20th february 1882, they profess to have similarly acquired shares in dhekwari and parasrampur, and on the same date, in masaha and pairahi. likewise, on the 20th december 1882, they claim to have become sharers in ujraon, tilokha, nagra, deokali, and other villages, and lastly, they boldly state that when the present vendors, fakir chand and moti lal, in.....
Judgment:

Straight and Tyrrell, JJ.

1. The facts of this case can be stated without many words. The plaintiff is a recorded sharer in the villages Nagra, Deokali, Dhekwari, Chaehia, Pairahi, Parasrampur, Pal Chandbha, Gothba, Masaha, Ahirauli, Tilokha, Chainpur, and Karsand. Two other sharers in the same, namely, Babus Fakir Chand and Moti Lal, sold their interests therein on the 21st March 1883, to the two answering defendants Bhawani Shankar Shelhat and Beni Shankar Shelhat. On the 1st May 1883, the plaintiff, learning of the sale, preferred his claim of pre-emption. The defendants defended the action on the main and practically the single ground that they were co-sharers in the villages in question, and, as such, being in the same relation to the vendors as the plaintiff, were unassailable by way of pre-emption. It is true that other pleas were raised, but in fact the case was fought, and must be decided, on this issue only. It is admitted that the defendants have never been recorded shareholders in any part of the estate in question, but they contend that on various occasions they purchased shares in the farzi names of their gomashta Bisheshar Tiwari and his brother Baldeo Tiwari. For example, they allege that on the 20th December 1873, in execution of a decree obtained on the 29th March 1866, by Bisheshar Tiwari against Babus Ram Narain Singh and Jagdeo Bahadur Singh, they bought these judgment-debtors' shares in Chainpur, Pal Chandbha, and Karsand. Again, on the 20th February 1882, they profess to have similarly acquired shares in Dhekwari and Parasrampur, and on the same date, in Masaha and Pairahi. Likewise, on the 20th December 1882, they claim to have become sharers in Ujraon, Tilokha, Nagra, Deokali, and other villages, and lastly, they boldly state that when the present vendors, Fakir Chand and Moti Lal, in 1877, purchased the properties they are now transferring, they purchased them not for themselves only, but, to the extent of the two parts out of three, for the present vendees, the defendants and appellants before us. By virtue of all these transactions the defendants claim to be substantial co-sharers in all the villages in suit, no less than the plaintiff, although they have to admit that on every occasion their acquisitions were benami, under cover of the name of Bisheshar Tiwari, who, with his brother Baldeo, in all the proceedings, was the ostensible and only apparent creditor, suitor, decree-holder and vendee of the original shareholders Ram Narain Singh and Jagdeo Bahadur Singh. On these pleadings two issues arose-one of fact, whether Bisheshar Tiwari was the farzi purchaser, the real purchasers being the defendants-appellants; the other of law, whether in the event of its being found that the defendants were the real vendees on the various occasions above mentioned, they may not be equitably estopped from pleading these covert acquisitions in defeasance of the plaintiff's open and unquestionable rights and privileges as a duly recorded shareholder. The question of fact formed the subject of the seventh issue tried by the Subordinate Judge, who decided that Bisheshar Tiwari was not the farzi of the defendants-vendees in his acquisitions of the estate of Ram Narain Singh and Jagdeo Bahadur Singh, or in the agreement he made on the 13th August 1874, with Fakir Chand and Moti Lal.

2. Their Lordships proceeded to consider the correctness of this finding upon the evidence, and while not agreeing with the Court below that Bisheshar Tiwari had no business relations as gomashta or other servant with the defendants' firm, concurred in holding that he was not proved to have lent the defendants his name for benami purposes on the occasions and to the extent asserted. After dealing with matters of evidence upon this point, which are not material to the purposes of this report, the judgment continued as follows:

3. This finding would suffice to dispose of the defendants' case. But we may add that even if there had been better reason for thinking that the purchases of the Tiwaris in 1873 and 1882 had been benami for the defendants, we should have hesitated very much in holding that such covert and undisclosed interests in an estate should be regarded as the co-sharership therein contemplated by the wajib-ul-arz provisions and the Muhammadan Law in respect to the right of pre-emption. Under the Revenue Act of 1873, a co-sharer to be qualified to assert pre-emption at a sale of an undivided estate in satisfaction of a claim for revenue must be 'a recorded sharer.' This is mentioned by way of analogy only; but it appears to us that it would be unjust from many points of view to allow an otherwise unquestionable right of pre-emption to be defeated by a stranger asserting that, by subterranean proceedings and carefully preserved incognitos, he had been in fact a sharer in the dark for a period long enough to baffle any action to get rid at law of his unauthorised acquisitions. The act of transfer, it is true, is that which furnishes the bond fide shareholder with the occasion to claim his pre-emptive right, but it is the disclosure of that transfer, whether by way of physical seizure or of registration of the instrument of sale, that is held to afford not only the terminus a quo but also the complete cause of action for the pre-emptor's suit. The principle of natural equity laid down in Ramcoomar Koondoo v. Macqueen, L. R., I. A. Sup. Vol. p. 40, is applicable to this case. It suited the defendants to conceal their alleged acquisitions of shares in the plaintiff's villages, which he might have hindered ad the time if he could have known of them: and they cannot now be allowed upon these secret titles to defeat his right of pre-emption, which he asserted at once at their first appearance as purchasers in his villages in their true character. For it cannot be held that there is any sufficient evidence, or indeed even plausible grounds, for suggesting that the plaintiff had direct notice, or anything amounting to constructive notice of the farzi nature of Bisheshar's interference in the village management, collections, and affairs generally; or that there were any circumstances connected with Bisheshar's original dealings with the Babus, or with his appearances against them in Courts, his purchases of their shares, the consequent mutations of names, or the personnel of his local agents and servants, to put him on inquiries that, duly prosecuted, should have led him in Ghazipur to discover that Bisheshar and Baldeo were mere ism-farzi for the stranger-bankers at Benares, the Shelhatjis.

4. Some objections were filed on behalf of the respondent; but his learned Counsel declined to support them. We accordingly disallow the objections. And dismissing the appeal of the defendants, we direct that they pay all the costs of the appeal.


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