1. This is a plaintiff's appeal arising out of a suit to recover a sum of Rs. 1,625 by sale of certain mortgaged property. The plaintiff also claimed a personal decree for recovery of the same amount against defendant 1, Mt. Fasihunnisa.
2. Mt. Fasihunnisa, defendant 1, is the daughter of Fatma Bibi. On 29th of October 1919, Mt. Fasihunnisa and some other persons mortgaged certain immovable property for a sum of Rs. 20,000 in favour of Madho Prasad and Manmohan Das. On 16th February 1920 Mt. Fasihunnisa sold a certain share of the mortgaged property to one Siddiq Ahmad. No portion of the sale consideration was left ; with the vendee for payment to the mortgagees. It was agreed that the vendor herself should pay Rs. 1,000 out of the sale consideration to the mortgagees in satisfaction of the mortgage debt so far as the property sold was concerned. On the same day Mt. Fatma Bibi executed security bond in favour of Siddiq Ahmad undertaking to indemnify him in case he lost any part of the property sold to him, or had to pay any part of the mortgage money due from Fasihunnisa. In these events the vendee was entitled to recover the sale price or the damages, from the property which Fatma Bibi mortgaged as security.
3. The plaintiff Sheikh Moin Uddin brought a suit for pre-emption against Siddiq Ahmad in respect of the property sold and obtained a decree for pre-emption on payment of Rs. 1,450. The plaintiff paid up this sum and obtained possession. Subsequently the mortgagees sued upon the mortgage bond of 19th October 1919, and obtained a decree for sale on the 1st December 1925. The property was sold and one Sheikh Hayat Ullah purchased the property at auction and obtained possession over it on 2nd December 1928. The plaintiff having been dispossessed on 2nd December 1928, by the auction-purchaser has brought this suit to recover the amount which he had to pay to obtain possession of the property under the preemption decree together with interest. Ho brings the suit not only against Mt. Fasihunnisa personally but against the property which was mortgaged by Mt. Fatma Bibi on the very same day as the execution of the sale-deed, namely, on 16th February 1920, as security in favour of the purchaser Siddiq Ahmad in case he should be deprived of possession of the property sold or should have to pay anything on account of the mortgage charge upon that property. Mt Fatma Bibi bad executed a Wakfnama, of the property which the had mortgaged to Siddiq Ahmad, in favour of Maqbul Alam and others who are defendants. Mt. Fatma Bibi no longer retained any interest in the property which has now passed to the donees under the Wakfnama.
4. The main point for decision in this appeal is whether the pre-emptor plaintiff is entitled to the benefit of the indemnity bond executed by Mt. Fatma Bibi in connection with the sale of the property by Mt. Fasihunnisa to Siddiq Ahmad on 16th February 1920, or whether the pre-emptor is entitled only to the benefit of any covenants contained in the sale deed itself. The trial Court took the view that the sale deed and indemnity bond were parts of the same transaction and that the pre-emptor stood in the shoes of the purchaser Siddiq Ahmad and was entitled to the benefit of the indemnity bond executed in favour of Siddik Ahmad.
5. The lower appellate Court has taken a contrary view. The learned Subordinate Judge holds that the security bond or indemnity bond did not contain a covenant that it would run with the vended property. The bond was executed by Fatma Bibi for the sole purpose of persuading Siddiq Ahmad when no one else had even the inclination to buy.
6. It was to Siddiq Ahmad alone that. Fatma Bibi was to be liable on the occurrence of certain specified events. On this view therefore the security bond imposed' only a liability upon Fatma Bibi in favour of Siddiq Ahmad personally, and the pre-emptor was not entitled to avail himself of the benefit of the bond.
7. It has been urged for the plaintiff appellant that the plaintiff as pre-emptor was substitued for the vendee Siddiq-Ahmad and that any covenant relating to the sale of which the vendee could derive benefit enured also for the benefit of the pre-emptor. The Court below has relied upon the case of Natesa Vanniyan v. Gopalaswami Mudaliar A.I.R. 1928 Mad. 894. In that case where on the sale of certain lands a security bond was executed by a third party to the vendee undertaking to compensate the latter with equivalent lands in case the vendee or his representatives should be deprived of the possession of the land sold to him, and an auction-purchaser in execution of a decree against the vendee sold them to the plaintiff, and the latter being deprived of his possession in execution of a decree obtained by a person who claimed adversely to the original vendor, sued on the security bond for the recovery of equivalent lands from a purchaser of the same from the surety, it was held that the covenant under the security bond was only a covenant for indemnity, and not a covenant for title; that a covenant for indemnity is not one running with the land; and that consequently the plaintiff was not entitled to enforce the bond against the defendant and recover possession of equivalent lands. In our opinion, this ruling can be distinguished on two grounds. The question for consideration in that case was what interests passed to an auction-purchaser. The question before us is what interests passed to a pre-emptor under a pre-emption decree. Another distinguishing feature is that in the case before us Mt. Fatma Bibi did not only undertake a personal liability to indemnify the vendee upon the occurrence of certain events but she mortgaged certain immoveable property as security for the fulfilment of her undertaking. In the Madras case it appears that no property was hypothecated as security and the third party only entered into a personal covenant.
8. It is clear that under the law of preemption the pre-emptor is substituted in place of the vendee and prima facie we must hold that all the rights attaching to the vendee in respect of the property should also pass to the pre-emptor. It is clear that in the present case Siddiq Ahmad would, in the present circumstances, have been entitled to sue upon the mortgage bond executed by Mt. Fatma Bibi. It is difficult to see why the pre-emptor should not be entitled to institute a similar suit. In our opinion, however, it is not necessary to go further into this question as we prefer to base our decision upon another ground. There is no doubt that the contract of sale and the contract of indemnity were closely connected and, in our opinion, they can be considered to be party of one transaction. This was the view taken by the trial Court and, in our opinion, it is correct. The Court below has expressly stated that the security bond was executed by Fatma Bibi for the sole purpose of persuading Siddiq Ahmad to buy the land. The sale deed and the security bond were executed at the same time and on the same day. The marginal witnesses of the two deeds were also the same and the person in whose favour they were executed was also the same. We have no doubt that substantially these two documents do form part of one transaction and that the execution of the indemnity bond by Mt. Fatma Bibi was an important factor in the contract of sale. As found by the Court below Siddiq Ahmad would never have purchased the property unless he had obtained the indemnity bond from Fatma Bibi. On the view that these two documents evidence part of one and the same transaction the position is clear. The pre-emptor is certainly entitled to take the benefit of any covenant forming a part of the contract of sale. We hold, therefore, that the pre-emptor is entitled to sue upon the indemnity bond. We accordingly allow the appeal, set aside the decree of the Court below and restore the decree of the trial Court with costs throughout.