1. The property to which this litigation relates is a nine pies share in mauza Makhapur, of which the plaintiff and the defendant, Khurshed Jahan, were co-sharers. On the 21st May 1885, Khurshed Jahan executed a sale-deed in favour of Ram Din and other defendants, whereby he sold the above mentioned nine pies share for a price which is stated in the sale-deed to be Rs. 825.
2. The plaintiff thereupon instituted this suit to enforce her right of pre-emption in respect of the above mentioned sale, and in her claim she alleged that the sum of Rs. 825 had fraudulently and collusively been entered in the sale-deed to defeat her right of pre-emption; that the price actually paid was only Rs. 350; that according to the pre-emptive clause of the wajib-ul-arz of the village the right of pre-emption could be enforced on payment of such sum of money as would represent the 'kimat-i-muravvajah,' that is, price according to current rates; that such current rate was to calculate the price at 8 annas per cent profit; and to support her contention she produced a bujharat of 1292 fasli, showing that the annual profits of the nine pies share amounted to Rs. 21-1-8.
3. The suit was resisted by the vendor, Khurshed Jahan, defendant, on the allegation that he sold the property for Rs. 825 after the plaintiff had refused to purchase the share. Ram Din and others, vendees-defendants, took the same plea, and they further pleaded that the market value of the property in suit was Rs. 825, which they had paid as the consideration of the sale.
4. The Court of First Instance held that refusal by the plaintiff to purchase the property was not proved; that the plaintiff had failed to prove either that the market-value of the property was only Rs. 350 or less than Rs. 825; that this last sum must, therefore, be taken as the 'correct amount of the consideration-money and the same should be paid by the plaintiff.' The Court accordingly decreed the claim for pre-emption subject to payment of Rs. 825.
5. From this decree the plaintiff appealed to the Lower Appellate Court upon grounds which impugned the judgment of the first Court as to the amount of purchase-money and the principle upon which it should be calculated. The learned Judge of the Lower Appellate Court dismissed the appeal, and the main part of his judgment is thus worded:
The lower Court did not hold the wording of the wajib-ul-arz as binding upon the parties; and I agree in this view of the lower Court; besides this, there is no reliable evidence that only Rs. 350 were paid, so if plaintiff wishes to buy the property, she must do so for Rs. 825.
6. The plaintiff has preferred this second appeal, contending that in determining the price of the property in suit the Lower Appellate Court has erred in not following the terms of the wajib-ul-arz as to the 'kimat-i-muravrajah' or the current rate; and that that Court has omitted to decide the exact amount of the price actually paid for the property in suit.
7. Mr. Abdul Majid, in supporting the appeal, has confined his argument to these two points, and contends that the decision of the Lower Appellate Court must be taken to proceed upon the preliminary point that the terms of the wajib-ul-arz as to the assessment of the price were not binding upon the parties, and that therefore that Court has not tried the case upon the merits. On the other hand, Mr. Moti Lal, who appears for Mr. Juala Prasad, on behalf of the respondents, argues that the judgment of the Lower Appellate Court must be read so as to incorporate the findings and conclusions of the first Court, and so read, the case must be treated as having been tried upon the merits, leaving; no room for second appeal.
8. I am of opinion that the appeal has force and that the ease has not been tried upon the merits by the Lower Appellate Court, as that Court's judgment proceeds upon the view that the terms of the wajib-ul-arz as to the assessment of the price for pre-emptive purposes were not binding upon the parties. The question is no doubt one not altogether free from difficulty, when regarded as a general question of law, whether such covenants run with the land so as to bind purchasers who may or may not have notice of such covenants. The covenant may amount only to an obligation annexed to the ownership of immoveable property, but not amounting to an interest therein, and in this light the covenant would fall under the class of obligations which have been well described in the second paragraph of Section 40 of the Transfer of Property Act (IV of 1882), or, to use the language of jurisprudence, the right created by such a covenant would fall under the category of jus ad rem as distinguished from jus in rem: and if it be so, then the equitable doctrine of notice would come into play in dealing with such questions where bona fide transferees for value are concerned.
9. I am, however, relieved from entering into this somewhat difficult question by a long course of decisions in respect of such covenants when found in the pre-emptive clause of the wajib-ul-arzes in these Provinces. In Chotey v. Bulla, N.-W. P. S. D. A. Rep., 1865, part i, p. 163; Hakeem Maher Ali v. Premsookh, N.-W. P. S. D. A. Rep., 1865, part i, p. 365, and Balesur Aheer v. Pudarut Singh, N.-W. P. S. D. A., 1865, part ii, p. 104, the late Sadar Diwani Adalat of these Provinces laid down the rule that a condition in the wajib-ul-arz securing to co-sharers a right of pre-emption at a fixed sum per bigha, without reference to the actual price paid by a stranger, however unusual land inexpedient, must be enforced, when its enforcement is claimed by a co-sharer. In laying down this rule the learned Judges do not seem to have considered how far the doctrine of notice would affect the question when raised against bona fide transferees for value, and I can well imagine why in Akbar Singh v. Juala Singh, Weekly Notes, 1885, p 216, in dealing with a similar covenant, my brothers STRAIGHT and TYRRELL confined the effect of such covenants only to disputes as to price between the pre-emptor and the vendor, and would not extend the effect of such covenants to bona fide purchasers for value.
10. The case-law stood thus when a Full Bench of this Court in Karim Bakhsh v. Phnla Bibi I. L. R., 8 All., 102, had to consider the same question, and they unanimously arrived at the conclusion that covenants in the wajib-ul-arz as to the assessment of price for purposes of pre-emption run with the land so as to bind purchasers, that a pre-emptor co-sharer could enforce such a covenant both against the vendor and the vendee, and that if the stranger vendee had paid more than was payable according to the wajib-ul-arz, he was entitled to recover the surplus from the vendor. In delivering his judgment in that case my brother TYRRELL distinguished the ruling in Akbar Singh v. Juala Singh, Weekly Notes, 1885, p. 216, to which I have already referred, and he adopted the Full Bench ruling in Hasrat Khan v. Jeobadh Upadhia, Weekly Notes, 1887, p. 76, which is, so far I am aware, the latest ruling on the subject.
11. In none of the cases to which I have referred (and I am not aware of any other ruling) does the exact nature of the right created by covenants in the wajib-ul-arz as to the assessment of price for pre-emptive purposes appear to have been either argued or considered, with reference to the applicability of the equitable doctrine of notice to bona fide transferees for value, nor does it appear that the question how far such covenants are enforceable in law as opposed to public policy in consequence of derogating from the value of immoveable property was considered or decided; and I confess that if the matter was res integra I should have considered it my duty to have considered these points before giving such unqualified effect to covenants as to price contained in the wajib-ul-arz as against transferees for value, the more so as I cannot help feeling that such covenants are opposed to the very nature of the right of pre-emption.
12. The matter, however, as I have shown is not integra and the balance of authority of the case law which culminated in the Full Bench ruling of this Court in Karim Bakhsh Khan v. Phula Bibi, I.L.R., 8 All., 102, is entirely in favour of the appellant's case, for it goes the length of holding that irrespective of notice such covenants in the wajib-ul-arz run with the land and are enforceable against bona fide purchasers for value, whose only remedy is to recover the surplus from the vendor, that is, such money as may have been paid by the vendee over and above the price assessed according to the wajib-ul-arz. The ruling is binding upon us, and in accordance therewith I hold that the learned Judge of the Lower Appellate Court was wrong in law in holding that the terms of the wajib-ul-arz as to the enforcement of pre-emptive right on payment of price at the current rate was not binding upon the parties, and that he should have tried the case upon the merits with reference to the terms of the wajib-ul-arz above mentioned. In other words, he should have gone fully into the merits of the whole case in order to ascertain the exact current rate at which such property is sold. The circumstance that the defendants-vendees paid any particular sum as the price of the property may no doubt forth an element of consideration as to the exact market-value of the property with reference to the current rate at which such property is sold. But according to the Pull Bench ruling above mentioned, the circumstance that the defendants-vendees actually paid Rs. 825 or even a lesser sum, as the price of the property, would not per se render the decree for pre-emption subject to payment of the price actually paid.
13. The Lower Appellate Court has not tried the case upon the merits with reference to these considerations, and under the circumstances I would decree this appeal, and setting aside the decree of the Lower Appellate Court, remand the case to that Court for trial upon the merits. Costs to abide the result.
14. For the reasons stated by my brother Mahmood I concur with him in allowing the appeal, in setting aside the decree of the Lower Appellate Court, and in remanding the case to that Court for trial upon the merits.