1. This is a second appeal by a plaintiff whose suit for pre-emption has been dismissed by the two lower Courts. The suit was brought in regard to a sale deed dated 25th November 1932 executed by defendant 3, Hira Lal, in favour of defendant 1, Baldeo Prasad, who is a co-sharer in the village, and defendant 2, Ram Chandra, who is not a cosharer. The son of Baldeo Prasad is married to the sister of Ram Chandra. The sale deed was for certain property of which one quarter was sold-jointly to defendants 1 and 2 for Rs. 3750 as set out in the sale deed, and the remaining three, fourths to other persons. The plaintiff was about to bring a suit for pre-emption which was actually filed on 25th November 1933 although it was not registered until a later date, 25th February 1935. A deed of gift was executed by defendant 1 to defendant 2 of a minute share of the zamindari with a revenue of Rs. 1-8-0 stated to be worth Rs. 45, bearing the date 30th October 1933 and registered on 18th December 1933. It was contended that the date of the deed was not correct and that it was really executed after the suit was filed, but the Courts below have found that the date of the deed of gift, 30th October 1933, was the correct date of execution. The claim of the plaintiff was that as the sale deed was in favour of two persons jointly against one of whom only there was a right of pre-emption, namely defendant 2, then the right might be claimed against both under Section 22, Agra Preemption Act, 11 of 1922. The claim of the defence was that defendant 2 had acquired an indefeasible interest in the mahal prior to the institution of the suit by the execution of the deed of gift of a small share in his favour. In regard to this defence which has been accepted by the Courts below, the appellant brings forward two points. Firstly, that Section 20 cannot be applied to a person who comes under Section 22, and secondly, that as the deed of gift was by Baldeo Prasad, the manager of a joint Hindu family, the deed of gift is liable to be defeated by a suit brought by other members of the family, one of whom at least, a grandson is a minor and therefore the interest acquired under it is not an indefeasible interest in the mahal within the meaning of the second part of Section 20.
2. As regards the first point learned Counsel for the respondents relies on a ruling Badri Pandey v. Parsotam Singh : AIR1928All697 . In that case there was a suit for pre-emption of a sale deed in favour of defendants 2 and 3 who were brothers and defendant 3 was a recorded cosharer and defendant 2 was not a recorded cosharer. Before the suit was brought, defendant 2 transferred his interest in the sale deed to defendant 3. A Bench of this Court held that the first part of Section 20, Pre-emption Act, applied although the claim of the plaintiff was brought under Section 22, Preemption Act, and therefore the claim could not be decreed. This ruling is an authority for the proposition that Section 20 can be applied as a defence in a suit brought relying on Section 22. No authority to the contrary has been shown. We consider that there is nothing in the wording of Section 22 which indicates that other provisions of Chap. 4 in which it occurs are not to be applied. The language of Section 22 is merely as follows:
Where property is jointly purchased or foreclosed lay two persons against one of whom only there is a right of pre-emption, such right may be claimed as against both.
3. The wording in this Section is that a right 'may be claimed.' The Section does not say that a decree may be granted or shall be granted. Obviously, the wording of Section 22 leaves it open to the defence to take advantage of any defence which may be brought under any portion of the Preemption Act. We consider therefore that the defence of Section 20 is not technically barred in the case of a suit brought under Section 22.
4. We now come to the main argument of learned Counsel which was that the deed of gift by Baldeo Prasad was liable to be defeated by a suit brought by minor members of the family or major members of the family on the ground that there was no legal necessity for the deed of gift. For this proposition learned Counsel relies on three rulings which are as follows: Firstly, Deo Narain Singh v. Ajudhia Prasad : AIR1927All575 , a ruling of the year 1927, in which there was a sale deed executed by a Hindu widow with the nearest reversioner of certain property belonging to her deceased husband's estate. A suit was brought to pre-empt the sale. During the pendency of the suit the widow alone without the concurrence of the reversioner executed a gift of property in favour of the vendee. The defence was claimed that the vendee had acquired an indefeasible title. As the gift was made after the institution of the suit, it was claimed that this defence would lie under Section 19, Pre-emption Act. The Court held that as the gift might be defeated by a suit of the reversioner therefore the title of the vendee under the gift was not an indefeasible title. The next ruling is in Govind Singh v. Manglu : AIR1929All703 . That was a case of pre-emption of a sale deed and during the pendency of the suit the vendor, a Hindu father, made a gift of a share to the vendee. On p. 1113 the ruling laid down as follows:
Under the Hindu law, with the exception of certain specified oases, a father cannot alienate family property except for legal necessity or in lieu of his antecedent debt. There can be no legal necessity for a gift in favour of a stranger when no questions of the gift being made to a near relation or at the time of marriage or for the purposes of conferring spiritual benefit or for religious purposes arise. Such a transfer is obviously without authority and can be upset as soon as it is challenged.
5. The third ruling on which reliance was placed was Kundan Gir v. Jaswant Singh : AIR1929All765 . The facts in that case were similar. There was a gift by the vendor, a Hindu father, to the vendee during the pendency of the pre-emption suit. It was held that this case could not defeat the claim of the pre-emptor because an indefeasible title had not been acquired. All these three rulings differ, from the present case in the following points : Firstly, in the three rulings the gift was by a vendor. Now the vendor had completed his transaction of the sale deed and he had no further interest in the matter and it was not the concern of the Hindu joint family of which he was the manager as to whether the vendee should remain as vendee or whether the pre-emptor should be substituted as vendee. In neither case would the interests of the joint family which was the actual vendor be affected. For this reason the rulings all considered that the case of a gift made by the vendor under such circumstances was the case of a gift which prima facie and on the face of it was without any legal necessity whatever and therefore liable to be defeated by a suit by any of the members of the joint family concerned. On the other hand in Ram Ugrah Rai v. Ram Samaj Rai : AIR1931All211 , in regard to a deed of exchange executed by a manager of a joint Hindu family in favour of the defendants vendees to a suit for preemption the Court held as follows:
The learned advocate for the respondents however urges that this deed of exchange is of joint family property executed by only a few members of a joint Hindu family and therefore does not confer an indefeasible right on the defendants. It seems to us that it is impossible to say that every deed of exchange executed by a manager of a joint Hindu family is necessarily defeasible. Whether it can or cannot be avoided by the other members of the family will depend on its special circumstances. Even if the other members of the family are not parties to the suit, it is open to the defendant-vendees to lead evidence in order to satisfy the Court that circumstances exist which make this document binding on the family, and it therefore confers an indefeasible interest on them. That finding would bind the parties to the suit and would be sufficient for the purpose of disposing of this appeal.
6. We may mention that Sir Shah Sulaiman was a member of the Bench in this case Ram Ugrah Rai v. Ram Samaj Rai : AIR1931All211 and in all the other three cases mentioned, and therefore apparently he considered in this case that it was necessary to examine the question as to whether there would be or would not be a valid exchange. Before we deal with the facts of the present case we may mention the two other points distinguishing the three rulings on which learned Counsel for the appellant relies : secondly that the gifts in those rulings were made during the pendency of the pre-emption suit and therefore Section 20, Pre-emption Act, was not treated as a defence. Thirdly, in our opinion, as we have recently expressed in a ruling of this Court, S.A. No. 962 of Bhola Nath v. Shiv Singh Reported in : AIR1939All253 all these three gifts were invalid for defence on the simple ground that the Legislature has provided in Section 20 a certain criterion by which such a defence shall be valid, namely that the acquisition of the indefeasible interest must be prior to the suit and by implication, in our opinion, the Legislature intends that an acquisition of an interest during the pendency of the suit shall not be valid as a defence in a suit for pre-emption.
7. We now come to the circumstances under which the deed of gift in the present case was executed by defendant 1, Baldeo Prasad on 30th October 1933. Prior to that time he was one of the vendees in the sale deed of 25th November 1932 along with defendant 2. Some argument has been made about the legality of Baldeo Prasad acquiring property under that sale deed. We do not think that a sale deed to the manager of a joint Hindu family can be challenged by a minor member and we have not been shown any authority for such proposition. The argument was made that it was unwise to acquire zamindari property where there might be a suit for pre-emption. We do not think that this argument is sound and we may mention that Baldeo Prasad was a co-sharer in the mahal in which the property was acquired and not being able to raise the whole amount of the consideration himself he obtained some of the consideration from his connexion Ram Chandra and by this transaction he was investing joint family funds and acquiring a larger share in the mahal in which the joint family already had an interest.
8. Now when the time came when he became aware that a suit for pre-emption was likely to be brought by the plaintiff he was faced with the fact that if such a suit were decreed, as would obviously happen under Section 22, Pre-emption Act, the joint family would have to pay the costs of the suit. He was further faced by the fact that the plaintiff intended to claim that the sale deed was executed for a less amount than the amount entered in the sale deed. The amount entered for the one-fourth share is Rs. 3750. The plaintiff actually claimed in his plaint that the real consideration was Rs. 2500 and the Courts below have found that the correct consideration was Rs. 3000. The plaintiff therefore desired to deprive the joint family of Rs. 750 of the money which the Courts below have found was actually paid. From these considerations both of the costs and of the claim to reduce the sale, consideration beyond the true amount, and still more beyond the amount entered, it is apparent that Baldeo Prasad had the legal necessity of defending the joint family property; that is, it was necessary for him to take some action to prevent this suit being decreed against the joint family property which would result in loss to the family. Under these circumstances Baldeo Prasad made this gift to his co-vendee. It cannot be said that he was causing any loss to the joint family by the transfer of this minute portion which is valued in the gift at only Rs. 45. The sums which the joint family would have lost had he not made this gift were much larger, namely the costs of the suit and the possible allowance of a claim of the plaintiff for a consideration below the amount held by the Courts below. In this connexion we would refer to the following rulings : Jagat Narain v. Mathura Das : AIR1928All454 for a definition of the term 'benefit to the estate.' At p. 975 a quotation is made from their Lordships of the Privy Council in Sahu Ram Chandra v. Bhup Singh (1917) 4 A.I.R. P.C. 61 as fol. Iowa:
In all of the cases where it can be established that the estate itself that is under administration demanded, or the family interest justified, the expenditure, then those entitled to the estate are bound by the transaction.
9. On p. 978, the Full Bench ruling laid down in effect that the judgments of their Lordships of the Privy Council showed that if the transaction was to the benefit of the estate and was such as a prudent owner would have carried out with the knowledge that was available to him at the time, the transaction could not be set aside by anybody. We also refer to Ram Nath v. Chiranji Lal : AIR1935All221 , where it was laid down as follows:
The view that 'benefit' is something different from 'compelling necessity' finds some support from the remarks of their Lordships in Pichappa Chettiar v. Chokalingam Pillai . It seems to follow that the question whether the particular transaction in dispute was for legal necessity or was for the benefit of the estate and the joint family, is something more than the mere question whether the money borrowed was required for the purposes of a new business. The fact that it was required for a new business would not be any justification. If in addition thereto, it could be shown that there was either a pressure or necessity to continue that business, as it was the mainstay of the family or that the particular transaction was at the time beneficial to the family and the family estate, the transaction would be supported but, of course, on the latter ground. The question whether the transaction was for such benefit or not is a question of fact depending on the circumstances of the case, and it is for the Court to decide whether it was so beneficial and was such as an ordinary prudent manager would have entered into in the interest of the family.
10. In view of these rulings we consider that in the present case the established facts show that it was for the benefit of the estate that defendant 1 made this deed of gift to defendant 2. The gift is therefore one which could not be set aside by a member of the joint Hindu family of defendant 1 and we consider therefore that the gift did convey an indefeasible interest in the mahal to defendant 2. Under these circumstances the suit for pre-emption does not lie as provided in Section 20. We consider that the decrees of the Courts below were correct and we dismiss this second appeal with costs.