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Gayasi Ram and ors. Vs. ShahabuddIn and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1935All493; 157Ind.Cas.897
AppellantGayasi Ram and ors.
RespondentShahabuddIn and ors.
Excerpt:
- - that is a perfectly harmless and natural mutual arrangement, very common in india, quite intelligible, the object being that so long as the parties to the transaction preferred to keep out third persons from the body of co-sharers, they should have a right of veto......of the equitable rule of 'analogy to the statute' to pre-emption contracts, that is he treated the present contract as one of pre-emption. the second point on which the full bench ruling is distinguishable is that in no part of that ruling has any reference been made to section 10, t.p. act. the case was not put forward that the contract in that ruling would amount to an absolute restraint on alienation. as the case was not argued on that ground i consider that it cannot be held that the ruling is an authority for the proposition that section 10 does not apply to a contract of that nature. it should further be noted that in the ruling the case was one between co-sharers in a village. in. the present case the property in suit is not zamindari property, but a house and the parties are in.....
Judgment:

Bennet, J.

1. This is a Letters Patent appeal by the plaintiffs who have lost their suits in both the lower Courts and before the learned Single Judge of this Court. On 3rd July 1912, Bhuja Ram, father of the plaintiff, Gayasi. sold a house to Nanhu, the father of Ramsaruip, defendant 3, for the sum of Rs. 150. In that sale-deed there was a clause providing that the vendee would not transfer the house by mortgage, gift or self to anyone excepting the vendor or his heirs; that if the house were sold by auction-sale the sale would be invalid; and that if the house were transferred in contravention of the said terms then the vendor or his heir would have a right to get back the house by paying Rs. 175. On 13th April 1928, Ramsarup, son of the vendee sold the house to defendant 2, Raja Ram, for Rs. 1,000. On 3rd April 1929, Raja Ram, sold the house to defendant 1, Shahabuddin, for Rs. 800. On 12th April 1929, the plaintiffs have brought the present suit against all the defendants claiming possession, of the house on payment of Rs. 175 to defendant 1. The Court is below dismissed the suit on the ground that the condition was contrary to Section 10. T.P. Act as amounting to an absolute restraint on alienation. That view has been upheld by the learned Single Judge of this Court. Learned Counsel in Letters Patent appeal relies on certain rulings which he claims will show that in similar cases it has been held that such conditions are not contrary to Section 10, T.P. Act. The first ruling on which he relied is a Full Bench ruling in Aulad Ali v. Athar 1927 All. 170. Learned Counsel points out that the contract in that case quoted in the foot-note at the bottom of p. 530 (of 49 All 527), amounts in effect to the same result as the contract in the present case. The contract in that case is as follows:

I, Saiyid Muhammad Razi, cannot transfer the said share by sale or mortgage. If I, Saiyid Muhammad Rani, wish to transfer the remaining one pie (English) share or if I, Sheikh Nasiruddin, wish to transfer the whole or part of my share in mauza Gurdih aforesaid, wo can transfer it among ourselves, that is, one executant can transfer it to the other. In case of transfer to another person, the other executant will acquire it by pre-emption on payment of consideration at the rate of Rs. 8-5-4 for each pie (English) in case of sale and on payment of Rs. 4-2-8 for each pie (English) in case of other transfers.

2. I would, note firstly that the contract in the ruling differs because it does not state that alienation shall not take place. It sets out that a transfer may be made between the parties and further provides that if a transfer is made to another person then the opposite party will acquire the property by preemption. The pre-emption differs from the usual contract for pre-emption because the rate at which the purchase is to be made is fixed by the agreement. But in dealing with this case the Full Bench did mot lay any stress on this particular condition that the price was fixed. On the contrary the Full Bench treated the case as one of a contract creating a right of preemption. On p. 530 the acting Chief Justice stated, after quoting the contract and stating that it gave the right to pre-emption:

That is a perfectly harmless and natural mutual arrangement, very common in India, quite intelligible, the object being that so long as the parties to the transaction preferred to keep out third persons from the body of co-sharers, they should have a right of veto.

3. On p. 528 it is stated that each of the parties was the owner of an eight anna share in a certain village and one party transferred all his eight-anna share with the exception of a one pie share to the other. Again at the bottom of p. 532 the learned acting Chief Justice objected to the application of the equitable rule of 'analogy to the statute' to pre-emption contracts, that is he treated the present contract as one of pre-emption. The second point on which the Full Bench ruling is distinguishable is that in no part of that ruling has any reference been made to Section 10, T.P. Act. The case was not put forward that the contract in that ruling would amount to an absolute restraint on alienation. As the case was not argued on that ground I consider that it cannot be held that the ruling is an authority for the proposition that Section 10 does not apply to a contract of that nature. It should further be noted that in the ruling the case was one between co-sharers in a village. In. the present case the property in suit is not zamindari property, but a house and the parties are in no sense co-sharers, nor can there be any question of pre-emption by a contract. The next ruling on which learned Counsel relies is a ruling of their Lordships of the Privy Council reported in Mahomed Raza v. Abbas Bandi 1932 P.C. 158. That ruling sets out that on 19th September 1870, there was a compromise which stated:

It has been settled that both wives should, in accordance with this agreement, in their capacity as wives, from this time be declared permanent owners of a moiety each of the entire mahal Shadipur.... The said females shall not have power to transfer this property to a stranger.

4. In accordance with this contract their Lordships observed on p. 712 of 1932 A.L.J.:

In compromise of their conflicting claims what was evidently a family arrangement was come to, by which it was agreed that she should take what she claimed upon certain conditions. One of these conditions was that she would not alienate the property outside the family. Their Lordships see no reason therefore to hold that the provision in the compromise agreement that Sughra Bibi should not have power. to transfer the properties in suit to a stranger was otherwise than binding upon her.

5. Their Lordships come to the conclusion that Section 10, T.P. Act, did not make any change in the law prior to its enactment in 1882 and that the arrangement before their Lordships was an arrangement which would not be contrary to the provisions of Section 10. But I consider that the present case is very different from the family arrangement which was before the Privy Council. In the present case there is an absolute restraint on alienation to anyone other than the vendor or Ms heirs. In the case before their Lordships of the Privy Council their Lordships held that it was open to Sughra Bibi to make an alienation to anyone she desired within the family circle. Further the case before their Lordships was one in which provision was made for the wives of the person executing the agreement. In the present case the sale-deed which gave rise to this case is a sale-deed between strangers and cannot be considered parallel to a family arrangement.

6. On the other hand I consider that there are three rulings in which the principle has been laid down in favour of the defendants-respondents. The first of these rulings is Dal Singh v. Khub Chand 1921 All. 97. In that ruling there was a sale with a condition that the vendee or his-heirs should sell to the vendor or Ms heirs for the same price and to no one else. It was held that this would amount to an absolute restraint on alienation and that this clause was not enforceable. In Asghari Begam v. Maula Bakhsh 1929 All. 381 there was a condition against the transfer of an allowance by way of maintenance which was a charge on immovable property and the condition forbade making the transfer during minority or after minority. It was held that this was an absolute restraint on alienation and was void as contrary to the principle of Section 10, T.P. Act. In Gomti Sigh v. Anari Kuar 1929 All. 492, there was a case of a settlement between a husband and. his two wives by way of the execution of a document styled a Tamliknama in which it was held that the property should be held by the husband of the two wives and that neither he nor his wives could transfer separately and the transfer could be made only when all combined. It was held that this was an absolute restraint on alienation so far as the one-third share of the (husband was concerned and that this condition was not valid as it violated Section 10, T.P. Act, so far as that one-third share was concerned. Following those three rulings I hold that the condition in restraint of alienation in the present case is contrary to Section 10, T.P. Act, and therefore void.

7. Accordingly I hold that the suit of the plaintiffs fails and I dismiss this Letters Patent appeal with costs.

Sulaliman, C.J.

8. I concur. As laid down by their Lordships of the Privy Council in Mahomed Raza v. Abbas Bandi 1932 P.C. 158, the prohibition contained in Section 10 is operative against an absolute restraint on alienation only and not against partial restraints. But in order to see whether there is absolute restraints or not one has to examine the effect of all the conditions and find whether for all practical purposes alienation is prohibited. The mere fact that there may be some remote contingency in which there may be a possibility of an alienation taking place would not necessarily take the case out of the prohibition contained in Section 10. For instance, if the condition is that the property shall not be transferred without the consent of the other party, it may be argued that' there is a remote possibility when the promisee agrees that a transfer can take place. But obviously such a condition is for all practical purposes a complete prohibition against a transfer, unless the promisee gives his consent. On the other hand where there is no prohibition against the transfer itself, but a right of preemption is conferred on the promisee to take the property from a stranger vendee. Section 10 would be inapplicable.

9. The only difficulty which I have felt in this case is on account of a similarity between the conditions which were to be found in the document considered by the Full Bench in Aulad Ali v. Athar 1927 All. 170. and the present one. The mere fact that in that document there was no sentence laying down that the property shall not be transferred except to the executant, whereas there is a sentence in the present argument, is not, to my mind, of very great importance. My conclusion would not have been different even if in the present deed that sentence has not found a place. In both the documents there was a provision that in case of transfer to another person, the other executant would acquire the property on payment of a consideration at affixed rate and1 not on payment of the price paid by the purchaser. But I agree with my learned brother that the Full Bench; case cannot be treated as an authority, for the proposition that Section 10 does not apply to such cases because the point was never argued by counsel before the learned Judges and there is nothing in the judgment to indicate that their attention was drawn to the contention. We cannot therefore presume from the mere fact in the similarity of the language of the two documents that this point was necessarily decided by the Full Bench. Looking at all the conditions entered in the document prohibiting transfer by mortgage, gift or sale to anyone 'except the promisee and his heirs and entitling the latter to recover it for Rs. 175 only, no matter for how much more it may be sold, and even prohibiting an auction-sale for more than Rs. 175 and all this for all generations to come there is no doubt that for all practical purposes there is an absolute restraint on alienation and the conditions are void.


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