1. This is a plaintiff's appeal arising out of a suit for pre-emption. The sale which forms the basis of the suit was made by Harakha Chand, defendant No. 1, in favour of the defendants Nos. 2 to 7 on the 16th of March 1928. The property transferred consisted of shares in two villages. After the date of the sale, that is, on the i5th of April 1929, one Jaganath, a tenant of one of: the vendees, brought a suit against Kalap Nath, plaintiff No. 2, a minor, for a sum of money, and obtained a degree. In execution of this decree for money Kalap Naih's property in the two villages in suit was sold by auction on 21st August 1929 and was purchased by defendants 2 to 7. The sale was confirmed and possession was delivered to them on the 19th and 20th of October 1929. On the 23rd October 1929 in application was made on behalf of Kalap Nath for setting aside the sale. The application purported to be made under Order 21, Rule 90, but subsequently it was settled that the application must be understood to have been made under Order 21, Rule 89. Kalap Nath applied to deposit the purchase money under Order 21, Rule 89, but he made his application after a period of 30 days and asked for permission to extend the period on the ground that the sale proceedings and sale itself had been kept concealed from him by fraud. The decree in the pre-emption suit was passed on the 23rd November 1929. On that date, the learnad Subordinate judge held that plaintiff No. 2 had no subsisting title in the villages in suit and therefore had no right of pre-emption. The property to plaintiff No. 2, in the villages in suit had been sold to defendants 2 to 7 by the auction-sale on the 21st August 1929 and the sale had been confirmed. Although an application had been made by plaintiff No. 2 on the 23rd Oetober 1929 for setting aside the sale, no order had been passed by the learned Munsif before the 23rd of November. On that date, therefore, the trial Court found that the plaintiff No. 2 had no subsisting right of pre-emption and accordingly dismissed the suit.
2. Subsequently, that is on the 20th of August 1930, the learned Munsif set aside the auction-sale, finding that the proceedings were tainted by fraud. The Munsif's order was upheld on appeal by the learned Subordinate and on second appeal by the High Court. It is argued for the plaintiff-appellant No. 2 that as the auotion.sale by which he was alleged to have lost his title had been set aside, he never lost his proprietary right which entitled him to sue for pre-emption. The respondent has relied upon the ruling of a Bench of this Court in Umrao v. Lachh-man A.I.R. 1924 All. 448. That was a converse case; but it was held that in pre-emption suits an appellate Court should pay no regard to any event which happened subsequent to the date of the first Court's decree. That was a case where the plaintiff had a subsisting right at the date of the trial Court's decree; but owing to a subsequent decree he lost the status of a co-sharer. It was held that the plaintiff's right cannot be defeated by reason of some event which happened subsequent to the first Court's decree. If the same principle is followed in this case, it should be held that although the auction-sale has been set aside subsequent to the date of the first Court's decree, that event would not affect the plaintiff's right to obtain a preemption decree. As the case before us is the converse case of that dealt with in the ruling cited, and we feel that the question raised is of some difficulty, we dircet that the case be laid before the Chief Justice for being decided by a larger Bench.
3. This reference arises out of a suit for pre-emption.
4. On 16th March 1928 Harakh Chand, defendant 1, sold certain shares in two villages, to defendants M to 7. On 10th September 1928 Mt. Balkesha Kuar and Kalap Nath Singh instituted their suit for pre-emption against Harakh Chand and his vendees. On that date the plaintiffs wore co-sharers in the villages, while some of the defendants-vendees were mere rangers, so the plaintiffs had a right of pre-emption.
5. During the pendency of the pre-emption suit one Jagannath obtained a decree for money against Kalap Nath Singh (plaintiff 2) and in execution of his decree ' ho entire proprietary interests of Kalap Nath Singh in the two villages were sold by auction on 21st August 1929 to the defendants-vendees. This sale was confirmed, and possession was delivered to the auction-purchasers on 20th October 1929. On 23rd October 1929 the judgment-debtor, Kalap Nath Singh, made an application to the execution Court praying that the sale be set aside upon his depositing in Court the sum required under Order 21, Rule 89, and he deposited that num. The auction-purchasers objected that the application and deposit under Order 21, 11. 89 wore time-barred, as having been made more than 30 days from the date of wale. The applicant claimed the benefit of Section 18, Limitation Act, on the ground that ho had been fraudulently kept in ignorance of the auction-sale and had only become aware of it on 20th October 1929 when possession of the property was delivered by the amin. This application was still pending in the execution Court when the learned Subordinate Judge pronounece judgment in the pre-emption suit. He hold that, by reason of the confirmation of thus auction sale, plaintiff 2 had ceased in lie a co-sharer in the village, while the defedants-vendoqa had become co-shair. Plaintiif 1 also lost her right of pre-emption as she was suing jointly with plaintiff No. 2 who had become a mere sit ranger. It was admitted that an application for setting aside the auction-sale was ponding, but the trial Court held that it oould not take into account the possibility that the auction-sale might be set aside at Home future date. The trial Court oould only consider whether the plaintiffs have a subsisting right of pre-emption upto the date of passing the decree. On that date the plaintiffs had no subsisting right of pre-emption and therefore their suit must be dismissed. The trial Court's decree, dismissing the suit, is dated 23rd November 1929.
6. The plaintiffs appealed against this decree and during the pendency of the appeal the execution Court set aside the auction-sale on 20th August 1930. This order has been upheld by the Subordinate Judge on appeal and by the High Court in revision.The question for our consideration is what is the effect, if any, of the setting aside of the auction sale after the date of the decree in the pre-emption suit.
7. As we considered it necessary, for the purpose of deciding this appeal, to know the result of Kalap Nath Singh's application for setting aside the auction-sale, we permitted the appellants to file certified copies of the Munsif's order dated 20th August 1930 and of the Subordinate Judge's appellate order dated 21st March 1931. The Munsif found that the applicant, Kalap Nath Singh, was unaware of the sale and was undoubtedly 'kept out of its knowledge fraudulently by the auction-purchasers and their co-adjutor the decree-holder.' He held therefore that under Section 18, Limitation Act, the application and deposit under Order 21, Rule 89 were made within limitation, and he ordered accordingly that the sale be set aside.
8. It is argued for the appellants that the effect of this order was to set aside the auction-sale ab initio,so that the plaintiff No. 2 never lost his title and remained a co-sharer throughout. For the respondents, on the other hand, it is contended that when the auction-sale was confirmed the title passed to the auction-purchasers. Even though the sale has' been set aside by a subsequent order of the execution Court, that order should not be interpreted as having any retrospective effect; so the auction, purchasers did not lose their title until 20bh August 1930, long after the date of the decree in the pre-emption suit, and the plaintiffs therefore had no subsisting right of preemption on that date.
9. In my opinion, the appellants' contention must prevail. When Kalap Nath Singh's property was sold by auction he had a right to get the sale set aside within 30 days by making an application and deposit under Order 21, Rule 89. If he had dona so the sale would not have been confirmed and no title would have passed.
10. He was fraudulently kept in ignorance of the sale and therefore could not make his application within 30 days. When he became aware of the sale he promptly made his application and deposit. I think it is immaterial whether the decree-holder alone was guilty of the fraud or whether the auction-purchasers were also accessories to the fraud. It has been finally hold in the execution proceedings that by reason of the fraud practised upon the judgment.debtor he was entitled under Section 18, Limitation Act, to make the application and deposit under Order 21, Rule 89 when he did, and toget the sale set aside under the provisions of Rules 89 and 92(2). This means that the auction-sale, and the order confirming the sale, have been set aside ab initio. In other words, no title has passed and the sale must be treated as absolutely void, as if it had never taken place and as if no order of confirmation had ever been passed. The auction-purchasers cannot base any title upon the order of confirmation which has obviously been set aside along with the sale. To construe the order of 20th August 1930 as setting aside only the sale, while leaving the order of confirmation in force, would amount to depriving the former order of all meaning. I am quite unable to hold that the order of 20th August 1930 set aside the sale with effect from that data only, and not with effect from the date of the sale itself.
11. If my view is correct, ifc follows that on the date of the decree in the pre-emption suit the plaintiff's had a subsisting right of pre-emption, as required by Section 19, Agra Pre-emption Act, Although plaintiff No. 2 had apparently lost his proprietary rights and had apparently ceased to be a co-sharer, nevertheless in reality he remained a co-sharer, just as if no auction-sale had taken place.
12. Dr. Katju, for the respondents, has relied strongly upon the case of Umrao v. Lachhman A.I.R. 1924 All. 448, for the proposition that it is not competent to an appellate Court to pay regard to any events which may happen subsequent to the date of the trial Court's decree. In that case the pre-emptor's claim was founded upon a sale-deed executed in his favour by one Jawahir on 10th January 1919. During the pendency of the pre-emption suit the sons, of Jawahir filed a suit for setting aside that sale, and that suit was pending when a decree in the plaintiff's favour was passed in the pre-emption suit. Three months-after the pre-emption decree Jawahir s sons succeeded in getting the sale of 1919 set aside and this decision was affirmed in appeal. The result was that the plaintiff lost his right of pre-emption by reason of a decree passed after the date of the preemption decree. The question arose whether the appellate Court could set aside-the decree for pre-emption on the strength of the subsequent decree. the learned Judges referred to Baldeo Misir v. Ram Lagan Shukul A.I.R. 1924 All. 82 and made the following observations:
We held in that case, and we hold in this-case , that it is not competent to Courts in appeal to pay regard to any events which may happen subsequent to the date of the first; Court's decree; if on that latter datethe plaintiff has a subsisting right to pre-empt, he is entitled to succeed and his suit cannot be defeated because, by reason of some event which has happened subsequent to the date of the first Court's decree, he has lost the status of a co-sharer.
13. There is nothing in the judgment to show whether the decree in favour of JawahirV sons set aside the sale with effect from the date of the sale, or from the institution of their suit, or from the date of the-decree in their suit, or from some subsequent date. In a suit of that kind it may be that the decree for setting asida the sale was made upon the condition that the plaintiffs should deposit some portion of the sale consideration which was held to be binding upon the family on the ground of legal necessity, and that the sale should be set aside with effect only from the date of such deposit. We do not know the terms of the decree but if seems to have been assumed that the sale was set aside with effect from the date of the decree or some subsequent date. Om that assumption the ruling was, if I may say so with all respect, obviously correct. The plaintiff's right of pre-emption was subsisting at the date of the pre-emption decree and could not be affected by the loss of his interest occurring after the data of his decree.This is clearly laid down in. Section 19, Pre-emption Act. But on that assumption the present case is easily distinguishable. In the present case the-plaintiff No. 2 did not acquire any fresh title after the date of the preemption decree, but it was finally decided after that date that he had never lost his title and that his right of pre-emption was subsisting, although apparently lost, on that date.
14. The language used in Umrao's case A.I.R. 1924 All. 448 is certainly very wide and general but I do not think the learned Judges meant to lay down a general proposition that when a question of title vitally affecting a claim for pre-emption is 8ub judice in a suit or appeal between the same parties in some other Court on the date when the decree is passed in the pre-emption suit, then the appellate Court hearing the appeal against the decree in the pre-emption suit must invariably disregard the decision on the question of title. In my opinion, the subsequent decision cannot be disregarded. If the effect of the subsequent decision is that the plaintiff had or had not a subsisting right of pre-emption on the date of the decree in the pre-emption suit then the appellate Court should give effect to it by reversing the decree if necessary. In the present case the question whether plaintiff 2 had ceased to be a co-sharer was being litigated in execution proceedings, and not in a regular suit, but I think the same principle will apply. If it were held that a judicial determination of a question of title must be invariably disregarded in an appeal against a decree in a pre-emption suit, if the determination is made after the date of such decree then I think it would be necessary to issue general instructions to Courts hearing pre-emption suits not to pass any decree until the question of title has been finally decided. This would mean great delay in the disposal of pre-emption suits as the question of title might have to be finally decided in appeal to the Privy Council. It is undesirable to keep pre-emption suits panding so long, and it is unnecessary if the Court hearing the appeal from a pre-emption decree can give effect to the decision of a question which was sub-judice in some other Court on the date of the decree. I think this Court can and should give effect to the decision arrivod at in the execution proceedings which set aside the anction-sale ab initio and thus established the plaintiffs' subsisting right of pre-emption on the date of the trial Court's decree in the preemption suit.
15. I would allow the appeal and decree the plaintiffs' claim for pre-emption with costs in both Courts.
16. I agree, and have nothing to add.
17. I agree, and would like to add only a few words. Section 19, Agra Pre-emption Aot, requires that the plaintiff must have a subsisting right of preemption at the time of the decree. It means that he must have a continuous-and unbroken preferential right over the vendee from the time of the sale-deed till the date when the decree comes to be passed, if he had a subsisting right at the time of the decree then the mere fact that he lost it afterwards would not affect his claim. On the other hand, if he did not have a subsisting right on the date of the decree and came to acquire it subsequently, it would not help him. It follows that one of the crucial dates is the date of the decree. Events which happen after the decree cannot betaken into account. Where, however on the date of the decree in the pre-emption suit another decree or order exists which makes the pre-emptor lose his status as a co-sharer then his claim would fail. But if that decree or order were subsequently set aside either on appeal, or review or by a separate suit, the question, whether he should be deemed to have still had a subsisting right on the date of the decree-in the pre-emption suit, would depend on the form of the decree or the order, as the case may be. If the subsequent decree or order is given a retrospective effect so as to vacate the previous decree or order then it must be held that he never lost his right and that he continued to have a subsisting right. On the other hand, if the subsequent decree or order takes effect from any date subsequent to the date of the previous decree or order, then obviously the pre-emptor had lost his status at least for a time and his suit must fail.
18. Where a suit is brought for the cancellation of a previous transfer on the ground that it is voidable, it is possible to conceive of a period during which the' option has not been exercised, and the deed would not be cancelled with affect from any date previous to the exercise of such option. It is also conceivable that the Court may cancel the deed with effect from the date of its own decree or in some cases with effect from some future date when a condition is imposed for being fulfilled. In such a case the subsequent decree does not make the transfer void ab initio; it merely sets aside or cancels it with effect from a later date.
19. In the present case when the execution Court itself extended the time for the application under Order 21, Rule 89 on being satisfied that fraud had been committed, and accepted the deposit, it set aside its own order of confirmation and necessarily set aside the sale. Without having set aside the confirmation order it could not have entertained the application at all. It therefore follows that the Court actually vacated its previous order, and so the subsequent order setting aside the confirmation and the sale must necessarily have a retrospective effect and date back to the previous date. The result is as if in the eye of the law no confirmation order had ever been passed and the sale had never been confirmed and therefore the pre.emptor had never lost his status as a co-sharer at all. It is inconceivable that an order setting aside the confirmation of a sale in such circumstances should have effect from any subsequent date. When we take into account such a subsequent order we are not really giving effect to any subsequent event that happened after the first Court's decree, but we are merely receiving evidence to show that the right of the plaintiff had in fact never been lost and it had been subsisting all along, and that an order had been obtained fraudulently and was in reality not binding on the plaintiff and was of no effect against him was subsequently revoked.
20. With regard to the case of Baldeo Misir v. Ram Lagan Shukul A.I.R. 1924 All. 82, decided by a Bench of which I was a member, I would only add that that was a case not governed by the Pre-emption Act but was decided on the principles of the Common Law of the Province. It was assumed in that case that the decree in favour of the sons setting aside the sale was effective from its own date. When a separate suit is brought for setting aside a sale, the decree may not necessarily be given a retrospective effect particularly if the option to avoid it was exercised after some interval of time. But where the decree or order is vacated by a subsequent decision which binds the parties and operates as res judicata, it is not as if a new event has happened subsequently, but only that it is decided subsequently that the right had never in fact been lost. The setting aside of the previous order has necessarily a retrospective effect and the position is as if the previous order had never existed.