1. This is an appeal by the defendants vendees arising out of a suit for pre-emption brought on the basis of a sale deed dated 11th December 1929 executed by Chatur Singh and Tileshar Singh, defendants 1 and 2, in favour of Randhir Singh and Dasrath Singh, defendants 3 and 4. Defendants 5-7 have also been inpleaded on the allegation that they are members of a joint Hindu family with the vendees and are interested in this transaction. The plaintiff alleged in the plaint that in addition to this sale deed a fictitious document purporting to be a dead of exchange was also executed, but the entire property had been sold to the defendants and the vendors were not in possession of the property which they had purported to transfer under the deed of exchange and the plaintiff alleged that the said document did not confer an indefeasible right on the vendees because it was liable to be set aside by the other members of the joint family. The plain, tiff claimed preemption of the entire property mentioned in the sale deed, as well as the small fractional share mentioned in the deed of exchange. The defendants denied that the plaintiff had any right to preempt this property, set up the deed of exchange as conferring the rights of a coparcener on the defendants and also set up another unregistered sale deed as giving them a share in this village so as to make them co-sharers. Defendants 5-7 however did not claim any interest in the property and stated that they had no concern with the property sold. The learned Subordinate Judge did not frame any specific issue regards the fictitious nature of the deed of exchange. In summing up the pleadings, he mentioned in his judgment that the plaintiffs had alleged that one day before the sale deed a deed of exchange, which was farzi (fictitious) was executed, that the exchange was really part and parcel of the sale transaction and that defendants 3 and 4 contested the claim, their main pleas being that the exchange was not farzi and that the sale and exchange were separate transactions and the exchange conferred an indefeasible right on the defendants. The first issue framed by the learned Subordinate Judge was:
(1) Whether the sale deed and the exchange are separate transactions or they are one and the same transaction?
2. His findings are that the exchange and the sale are part and parcel of the same transaction. This is a finding in favour of the plaintiff, as that was the case put forward by him in his plaint. That finding on the facts is correct. The stamp-paper for the deed of exchange was purchased on 16th September 1929 and the document was executed on 10th December 1929 and presented for registration on the same day and was registered on 11th December. The stamp-paper for the sale deed was purchased on 11th December 1929 and the document was executed on the same date and presented for registration on the same day and was entered in by the Registrar the next day. The scribe of the two documents was one and the same person, and even the marginal witnesses and the identifying witnesses before the Sub-Registrar were identical persons. The deed of exchange purported to transfer a very small fractional share in 79.421 acres belonging to the vendors in village Sondhi in exchange for another very small fractional share in village Itauli. The sale deed specifically excluded from the transfer the small share in village Sondhi which had been previously transferred under the deed of exchange. The object of taking the deed of exchange, on the defendants' own showing, was to defeat the plaintiff's right of preemption and the two transactions were thought of together and indeed were insisted upon by the vendees. The defendants' evidence itself therefore shows that the idea of having these two documents arose at one and the same time and that these two transactions were part and parcel of the same transaction between the parties. In these circumstances, the finding of the lower Court that the exchange and the sale transactions were part and parcel of the same transaction must be accepted as correct.
3. As regards the unregistered sale deed which was set up by the defendants, it is said to have been executed on 10th August 1928, but was not registered. The question of this unregistered sale deed will be considered in the connected cases. The learned Subordinate Judge in the opening portion of his findings has remarked, that the mutation of names had been effected so far as the exchange was concerned. The defendant, Dasrath Singh, stated in his examination-in-chief that he had taken two annas land revenne property in Sondhi and gave to the vendors three annas land revenue property in Itauli, and that he was in possession of the property which he had taken and that mutation had been effected in his favour and that the same was the case with the other party with regard to the exchange. The khewat of village Sondhi (pp. 75-79) shows that mutation of names was effected in favour of Randhir Singh and Dasrath Singh on the strength of this deed of exchange in respect of the small fractional share. The khewat of Itauli was produced by the defendants at a rather late stage and was not admitted in evidence by the Court below but has been put on the record in a closed envelope. The learned Subordinate Judge has not remarked anywhere that the deed of exchange was a bogus or fictitious transaction, namely that it was not the intention of the parties thereto that the properties should pass from one to the other and that it was nothing more than a mere paper transaction without there being any intention of any transfer of any property at all. His sole finding is that the exchange and the sale were part and parcel of the same transaction, and there is a further finding that the defendants vendees have not acquired an indefeasible interest in the property because the vendors have sons who might impugn the transaction in future. It is on these findings alone that he has held that the plaintiff's claim should be decreed. The learned Subordinate Judge has given to the plaintiff not only a decree for the properties covered by the sale deed, but also with respect to the properties which have been given under the exchange, and has decreed the claim of the plaintiff for the amount which the defendants vendees had paid. The position therefore is somewhat inconsistent.
4. It seems to us that the defence cannot fail on the sole ground that the sale and the exchange are part and parcel of one and the same transaction. Indeed that finding would go against the plaintiff rather than the defendants. Under Section 11, Agra Preemption Act, the right of preemption accrues when a proprietary interest is 'sold' and does not arise in cases of other kinds of transfer. Section 4(10) lays down that in this Act 'sale' means a sale as defined in the Transfer of Property Act, 1882. Now 'sale' is defined in Section 54, Transfer of Property Act, as a transfer of ownership in exchange for a price paid or promised or part paid and part promised. On the other hand, 'exchange' is defined in Section 118 of the Act in the following words:
When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both things being money only, the transaction is called an exchange.
5. It follows that when neither of the two parties give money consideration only or when both the parties give money consideration only, the transaction is an 'exchange', whereas if one party gives property, whether with or without money and the other party gives money only, then the transaction amounts to a 'sale.' The word 'price' has not been defined in the Transfer of Property Act, but there is a definition of this word in the Sale of Goods Act, Section 2(1), where 'price' means the money consideration for a sale of goods. Reading Sections 54 and 118, Transfer of Property Act, there can be no doubt that where a party not only pays a cash consideration but also gives some property in addition, in lieu of property acquired by him, the transaction is not a sale within the meaning of Section 54 but is an exchange within the meaning of Section 118. This was the view expressed by a Bench of this Court in Rajjo v. Lajja : AIR1928All204 which has been followed in several cases. The pro-visions in Section 120, Transfer of Property Act, laying down that the rights and liabilities of the parties to an exchange are the same as would be of the parties to a sale, obviously refer to the rights inter se as was observed in Samar Bahadur Singh v. Jit Lal A.I.R. 1924 All. 390 at p. 360. That would not help the plaintiff in acquiring a right of pre-emption contrary to the provisions of Section 11, Pre-emption Act, which confines the right to a case where the proprietary interest has been sold and not to one where the property has been merely exchanged.
6. The other finding of the learned Subordinate Judge also cannot be accepted. There were two parties to this transaction of exchange, namely the vendors and the vendees. The vendees produced the other members of their family, who stated that they would not object to this exchange as they were separate and they had no concern with the property. It is also an admitted fact that Bandhir Singh, Dasrath Singh, and their brother Dilraj had no issue. The learned Subordinate Judge has himself found that 'thus from the side of the vendees there is no fear of any challenge'. He has, however, held that both Chatur Singh and Tilesar Singh have sons and therefore unless legal necessity or benefit to the estate is shown, the vendors' sons can successfully challenge the exchange. He has not attached any importance to the fact that under the sale deed some decree and previous secured and unsecured debts were to be paid off which would amount to payment of antecedent debts, if they were discharged. The learned Subordinate Judge has remarked that there is nothing to show legal necessity or benefit to the estate so far as the exchange is concerned. He has said:
It is futile to say that without the exchange there could have been no sale for the sale instead of being in favour of a stranger could have been to a person otherwise invested with the right of pre-emption as against a stranger.
7. This is a curious reasoning. What the defendants had said was that they would not take the sale deed unless and until the exchange also were to accompany it, in order that they might successfully defeat any claim of pre-emption and that no sale would have been effected if the contract for exchange also were not agreed upon. It is accordingly no answer to their point to say that the argument that without the exchange there could have been no sale was futile because the sale could have been made to some third party. The defendants were keen on acquiring the property themselves and it would have been no consolation to them if the property was sold to some third party or stranger. As regards the plaintiff's close relationship, the learned Subordinate Judge has not recorded any finding, considering that the question was immaterial, but he is not inclined to attach any importance to the evidence as he has remarked that the witnesses have made some muddle in their depositions. What the learned Sub-ordinate Judge has overlooked was that the evidence on the question of the nature of the property acquired by the vendees under the deed of exchange was one-sided. The plaintiff was challenging the deed of exchange on the ground that it did not confer any indefeasible interest on the vendees and was suggesting that the vendors' sons might in future challenge this deed of exchange. As far as we can see, no evidence was led on behalf of the plaintiff to show that the property transferred by the vendors under the deed of exchange was their joint ancestral property in which their sons had any interest whatsoever. There was only one vague statement made by Jaggan Nath Singh, witness for the plaintiff, that Ohatur Singh had ancestral zamindari in these two villages and also in Sondhi. The wit-ness did not refer to the other vendors and did not say specifically whether the property transferred under the deed of exchange was the ancestral property of Chatur Singh or not. He merely said that Chatcur Singh had some ancestral property in that village. On the other hand, the evidence led by the defendants was direct and positive. Dasrath Singh (p. 17) stated that
Chatur's and Tilesar's properties are self-acquired and not ancestral. Chatur, Tilesar and Nageshar are separate from one another, and they are the separate managers of their families.
8. Dasrath was supported by his witness Anrup Singh (p. 24), who also stated that the property sold and given in exchange was the self-acquired property of Ohatur, and Chatur had been in possession for about 20 years, having purchased the same from Jaijit Singh, and that Jaijit Singh's predecessors and Chatur's predecessors had been separate. Thus there was direct evidence to show that the vendors were the owners of their self-acquired properties and had every right to transfer the same. In the absence of any evidence to the contrary, it was clear that the deed of exchange in favour of the vendees was not liable to be challenged on behalf of the vendors' sons, and that there was no fear of the vendees losing their property as a result of such future suit. It therefore follows that the vendees have fulfilled the requirements of Section 20, Agra Pre-emption Act, by having prior to the institution of the suit acquired an indefeasible interest in the mahal by virtue of this deed of exchange, assuming that this was a genuine and real transaction. Unfortunately the point whish had been put forward, though somewhat vaguely, in the plaint that the document was really a fictitious document and which had been referred to in the summary of the pleadings by the learned Subordinate Judge was not made the subject matter of a specific issue, and there is no finding on this point at all.
9. It seems to us that if the parties did not intend that the small fractional share in Sondhi should pass to the defendants, vendees under this deed of exchange and the document was merely a fictitious and bogus transaction, a mere paper trasaction, without any real intention of any transfer of property, then it would not confer any rights on the defendants-vendees at all. But if, on the other hand, it was the intention of the parties that the small share should pass to the vendees in lieu of the small share transferred by the vendees to the vendors, then even though the professed object of the transaction was to defeat the plaintiff's right of pre-emption, the vendees would acquire rights there-under and become co-sharers so as to be placed on the same footing as the plaintiff. There is nothing illegal for a purchaser to acquire property by way of exchange which cannot be pre-empted, so as to be able successfully to defeat a claim for preemption brought against him with respect; to a subsequent sale deed to be taken by him. The mere fact that the share was small would not necessarily be sufficient to show that the transaction was a bogus one, when the intention of the parties might have been to have an exchange for the purpose of defeating a claim for preemption.
10. The learned Subordinate Judge has distinctly found in favour of the defendants that the plaintiff's argument that they have acquired only a petty proprietary interest is fallacious and not sound. The defendants did not under the deed of exchange acquire any specific plots in Sondhi, but acquired a fractional share, though a very small one, in that village. The share is described in the khewat as 3/5ths of 1/384ths of 4 annas 9 pies 17 krants and odd at serial number 1/2 in patti Ghatur Singh. This, in our opinion, is a definite fractional share in the undivided mahal and makes the vendees co-sharers. The learned Subordinate Judge has also erred in thinking that the area acquired by them would be represented by a few square feet only. It rather appears that the vendees have acquired 3/5ths of 1/384ths in 79.421 acres which would come to about 1/8ths of an acre, that is over 600 square yards, and not only a few square feet. The share therefore is not wholly negligible. As already remarked, mutation of names was effected in respect of this deed of exchange. As however the learned Subordinate Judge did not frame any specific issue on the question of the fictitious nature of this transaction of exchange and as there is a remote possibility that either party might have been prejudiced on account of the failure to frame such an issue, we think it would be just and fair to order the Court below to frame an issue and to determine it after giving the parties a fresh opportunity to produce any further evidence which they may be advised to produce.
11. If ultimately the finding is that the transaction was a genuine and real transaction under which the defendants acquired a share in the village, and this transaction on our finding was part and parcel of the sale transaction, then the plaintiff's right to preempt would be defeated. If, on the other hand, the finding were that the transfers of the two properties under the deed of exchange were not intended to be genuine and were really fictitious and unreal, then the plaintiff's right to claim pre-emption of the property covered by the deed of sale would be decreed, whereas the claim to pre-empt the property covered by the deed of exchange would fall to the ground. In this way the whole appeal would be finally disposed of. We accordingly send down the following issue to the Court below for determination : 'Was the deed of exchange dated 10th December 1929, between Chatur Singh and Tilesar Singh on the one hand, and Randhir Singh and Dasrath Singh on the other, a fictitious and unreal transaction in the sense that neither of the parties intended that any transfer of properties should really take effect, and that the transaction was a purely bogus and paper transaction, or whether it was a real and genuine transaction with the intention that the properties mentioned therein should pass from one party to the other, even though the object might have been to defeat any possible claim for preemption?'
12. The parties will be given an opportunity to produce fresh evidence, if so advised. The findings will be returned within four months of this date, and the usual ten days will be allowed for objections, if any.