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Mahabir Prasad Vs. Smt. Chanda Devi and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Arbitration
CourtAllahabad High Court
Decided On
Case NumberSecond Appeal No. 3537 of 1966
Judge
Reported inAIR1979All167
ActsArbitration Act, 1940 - Sections 13 - Order 1, Rule 13; Specific Relief Act, 1963 - Sections 21
AppellantMahabir Prasad
RespondentSmt. Chanda Devi and ors.
Appellant AdvocateRadha Krishna, Adv.
Respondent AdvocateJagdish Misra, Adv.
DispositionAppeal allowed
Excerpt:
.....- condition of pre-emption introduced in award - challenged as out of arbitrators purview - right of pre-emption incidental to ownership - held, award incorporating pre-emption within arbitrators' purview. - - the crux of the whole thing is that the benefit as well as the burden of the right of pre-emption run with (he land and can be enforced by or against the owner of the land for the time being although the right of the pre-emptor does not amount to an interest in the land itself. (6) the right being a very weak right it can be defeated by all legitimate methods, such as the vendee allowing the claimed of a superior or equal right being substituted in his' place. the learned counsel also wanted to raise the plea that rival preemptors were not made parties and the suit must..........disability upon the ownership of a property to the extent that it restricts the owner's unfettered right of sale and compels him to sell the property to his cosharer or neighbour as the case may be. the person who is a co-sharer in the land or owns lands in the vicinity consequently gets an advantage or benefit corresponding to the burden with which the owner of the property is saddled, even though it did not amount to an actual interest in the property sold. the crux of the whole thing is that the benefit as well as the burden of the right of pre-emption run with (he land and can be enforced by or against the owner of the land for the time being although the right of the pre-emptor does not amount to an interest in the land itself.' 6. the true content of the right of preemption has.....
Judgment:

Deoki Nandan, J.

1. This is a plaintiff's second appeal in a suit for pre-empting the sale of a house at Etawah for Rs. 1,200/- by a sale deed dated 29th April, 1968 made by defendant No. 2 in favour of defendant No, 1. The defendant No. 2 is the uncle of the plaintiff. The right of pre-emption was claimed on the basis of a condition contained in a registered award dated 14th July, 1946, whereby the immovable properties of the joint family to which the plaintiff and the second defendant belonged, were partitioned. The condition was in these words.

'Agar koi Shales fariken apne kure ki jaidad farokhat karna chahe to badast hissedar bai kare ba Surat Karne inkar badast gahir bai jaiz hoga.'

2. The trial Court held that the award was valid and it contained the said condition, that Yogya Swarup and Kishan Swarup the sons of defendant No. 2, were born after the making of the award and consequently the fact that they were not parties to the reference to arbitration did not vitiate the award, that it was not necessary to get the award made a rule of court as it was made prior to the coming into force of the Arbitration Act, 1940. However, holding that it was not competent for the arbitrators to incorporate the said condition in the award and that at any rate the condition was only directory and not mandatory, and was vague and did not confer any right to sue for pre-emption, the learned Munsif dismissed the suit on the ground that the condition was not enforceable. The learned Munsif also held that it could not be said that the first defendant had no notice of the condition in the award as it was made by a registered instrument and she could not, therefore, be a purchaser without notice. It is not necessary to refer to the other findings of the learned Munsif.

3. On first appeal to the District Court, which was heard and decided by the Court of the Temporary Civil and Sessions Judge, Etawah, it was held that although the condition seems to be a condition conferring a right of pre-emption the arbitrators had no right to incorporate such a condition in the award, nor could the award be considered to be a family arrangement, and therefore, the condition could not be enforced. In the result, the appeal was dismissed.

4-5. Mr. Radha Krishna learned counsel for the appellant, has contended before me that the view adopted by the two courts below about the jurisdiction of the arbitrators to incorporate the aforesaid condition in the award, is erroneous on its face. I agree. The award might not have been a family arrangement, nevertheless, the sanction behind the award was the agreement between the parties. It is undisputed that it was acted upon and was the instrument of partition between the parties. The arbitrators were undoubtedly given authority to make a partition on the reference of the dispute between the members of the family relating to partition of their immovable properties being made to them. It is not unusual to impose a restriction by way of easement on the enjoyment of property while making a partition of immovable properties among co-sharers. During the days when the dispute was referred to the arbitrators the right of preemption was a customary right widely practised in this part of the country. The source and the nature of the right of pre-emption was examined in some details by the Supreme Court in Audh Behari Singh v. Gajadhar Jaipuria : [1955]1SCR70 . The Supreme Court defined the right of pre-emption thus (at 422 para, 16) :--

'In our opinion it would not be correct to say that the right of pre-emption under Muhammedan law is a personal right on the part of the pre-emptor to get a re-transfer of the property from the vendee who has already become owner of the same. We prefer to accept the meaning of the word 'Tajibo' used in the Hedaya in the sense in which Mr. Justice Mahmood construes it to mean and it was really a mistranslation of that word by Hamilton that accounted to a great extent for the view taken by the Calcutta High Court. It is true that the right becomes enforceable only when there is a sale but the right exists antecedently to the sale, the foundation of the right being the avoidance of the inconveniences and disturbances which would arise from the introduction of a stranger into the land. We agree with Mr. Justice Mahmood that the sale is a condition precedent, not to the existence of the right but to its enforce ability. : 'We do not however desire to express any opinion on the view taken by the learned Judge that the right of pre-emption partakes strongly of the character of an easement in law. Analogies are not always helpful and even if there is resemblance between the two rights, the differences between them are no less material. The correct legal position seems to be that the law of pre-emption imposes a limitation or disability upon the ownership of a property to the extent that it restricts the owner's unfettered right of sale and compels him to sell the property to his cosharer or neighbour as the case may be. The person who is a co-sharer in the land or owns lands in the vicinity consequently gets an advantage or benefit corresponding to the burden with which the owner of the property is saddled, even though it did not amount to an actual interest in the property sold. The crux of the whole thing is that the benefit as well as the burden of the right of pre-emption run with (he land and can be enforced by or against the owner of the land for the time being although the right of the pre-emptor does not amount to an interest in the land itself.'

6. The true content of the right of preemption has been defined thus in Bishan Singh v. Khazan Singh : [1959]1SCR878 :--

'(1) The right of pre-emption is not a right to the thing sold but a right to the offer of a thing about to be sold. This right is called the primary or inherent right. (2) The pre-emptor has a secondary right or a remedial right to follow the thing sold. (3) It is a right of substitution but not of re-purchase i. e. the pre-emptor takes the entire bargain and steps into the shoes of the original vendee. (4) It is a right to acquire the whole of the property void and a share of the property sold. (5) Preference being the essense of the right the plaintiff must have a superior right to that of the vendee or the person substituted in his place. (6) The right being a very weak right it can be defeated by all legitimate methods, such as the vendee allowing the claimed of a superior or equal right being substituted in his' place.'

7. While dealing with the question whether the law of a pre-emption imposes an unreasonable restriction on a citizen's right to acquire, hold or dispose of the property guaranteed under Article 19(1)(f) of the Constitution the Supreme Court in Bhau Ram v. Baij Nath Singh : AIR1962SC1476 held that while the law conferring the right of preemption on account of vicinage imposes an unreasonable restriction on the said fundamental right and was consequently void, the same could not be-said of the law conferring a right of preemption among cosharers. It observed (at p. 1483):--

'If an outsider is introduced as a co-sharer in a property it will 'make common management extremely difficult and destroy the benefits of ownership in common. The result of the law of pre-emption in favour of a cosharer is that if sales take place the property may eventually come into the hands of one-co-sharer as full owner and that would naturally be a great advantage. The advantage is all the greater in the case of a residential house and Section 16 is concerned with urban property for the introducing of an outsider in a residential house would lead to all kinds of complications. The advantages arising from such a law of pre-emption are clear and in our opinion outweigh the disadvantage which the vendor may suffer on account of his inability to sell the property to whomsoever he pleases. The vendee also cannot be said to suffer much by such a law because he is merely deprived of the right of owing an undivided share of the property. On the whole it seems to us that a right of pre-emption based on co-sharership is a reasonable restriction on the right to acquire, hold and dispose of property and is in the interest of the general public.'

It would thus appear that the right of preemption was an incident of the ownership of joint property by all co-sharers in this part of the country. While dividing the property among co-sharers on a partition among them, the aforesaid condition incorporated in the award did not introduce anything new or something which was not in the contemplation of the parties when they made a reference of their dispute to the arbitrators. I am accordingly unable to hold that the condition was beyond the scope of the authority of the arbitrators to impose. In my view, the incorporation of the said condition in the award was within the scope of their authority.

8. The other grounds on which the aforesaid condition was held to be unenforceable by the trial court have already been negatived by the lower appellate court, and I need not go into the same.

9. The learned counsel for the defendant-respondent urged that the condition in the award had not been acted upon in the past, inasmuch as some other properties had been sold to strangers without objection, and that at any rate the condition cannot be specifically enforced, the only remedy being damages for breach thereof. The learned counsel also wanted to raise the plea that rival preemptors were not made parties and the suit must fail on account of non-joinder of necessary parties. As this last plea was not raised at the trial nor was any issue raised, the defendants could not be permitted to defeat the suit on this ground according to Order 1, Rule 13, C. P. C. and I did not therefore, permit the learned counsel to raise this plea at this stage.

10. With regard to the first point raised by the learned counsel for the defendant respondents it is essential for the continued existence of the right of pre-emption in case it was conferred by the aforesaid condition on the co-sharers, to have exercised it in the case if any transfer in the past for there is no obligation on a co-sharer to pre-empt any and every sale.

With regard to the second point, suffice it to say that the right of pre-emption is not in the nature of a right of a specific performance of a contract to sell property and the principle behind Section 21 of the Specific Relief Act cannot be applied to a suit for pre-emption. The decision of the Madras High Court in V. Alagarsami Naidu v. Kathia Goundan : AIR1931Mad799 cited by the learned counsel in this context is distinguishable and has no applicability to the facts of the present case.

11. The result is that the appeal must succeed and is allowed with costs. The plaintiff's suit for pre-emption in respect of the house described at the foot of the plaint by sale deed dated 29th April, 1963, registered on 30th April, 1963 for Rs. 1,200/- by defendant No. 2 now represented by defendant respondents Nos. 2 to 5 in favour of defendant respondent No. 1 is decreed with costs throughout on condition that the plaintiff appellant shall deposit the sum of Rs. 1,200/- in the trial Court within three months from today and on such deposit being made the defendant respondent No. 1 shall deliver possession of the house to the plaintiff appellant whose title thereto shall be deemed to have accrued from the date, of such payment but, if the said amount is not so deposited within the time limited hereby the suit shall stand dismissed with costs throughout.


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