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Dol Singh and ors. Vs. Khub Chand and ors. - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported inAIR1921All97; 64Ind.Cas.408
AppellantDol Singh and ors.
RespondentKhub Chand and ors.
Excerpt:
.....by vendee to sell to vendor and to no one else on price paid--restraint on alienation--agreement not valid. - - the court of first instance, without taking any further evidence in the case, held that the suit should fail for three reasons. it held that the covenant was bad for remoteness, presumably meaning that it was indefinite in point of time. it held that the agreement was not bad for remoteness. it seems to us, however, that the suit must fail because practically the two documents of 1878 read together constitute a transfer of property subject to a limitation absolutely restraining the transferee from parting with or disposing of his interest in the contract. we think that on this ground alone the suit should fail and the appeal, therefore, must fail......or his heirs wanted to sell any portion of the share of the two villages, he or his heirs would sell it to ganga din or his heirs and that when ganga din or his heirs did not care, then under such circumstances putti lal or his heirs will be entitled to mortgage or sell to other persons. as a matter of fact the deed does not give the transferee this option at all. he is by the . agreement tied hand and foot. it is impossible for him to transfer except at the will of the transferor ganga din or his heirs and then only if the latter are willing to take it for rs. 400, it may be said that in form the deed does not absolutely restrain the transferee from parting with or disposing of his interest, but in substance we think that it does and it is to the substance of the agreement that we.....
Judgment:

1. The facts of the case out of which this appeal has arises are briefly as follows:

On the 6th of June 1878 Ganga Din, father of the plaintiffs appellants before us, sold to Putti Lal, the father of the defendants Nos. 1 and 2, respondents, a Zemindari share in village Dharmangadpur and another share in village Raipure, in the Cawnpo for the sum of Rs. 400, According to the plaint the price was a low price by reason of the relationship between the parties On the same date the vendee Putti Lal executed a separate document in which he made the following agreemet:--'I, the executant, promise and execute this document in proof of my promise that when I the purchaser or my heirs want to transfer the shares in the two villages, then I will sell them to Ganga Din or his heirs for the sum of Rs. 400 and will not sell them to anybody else. If perchance I the purchaser or my heirs shall sell or mortgage the property elsewhere, the document effecting such a sale or mortgage will be illegal.

2. On the 14th of July 1915, some 37 years afterwards, defendants Nos. 1 and 2, who are the sons of Putti Lal, executed a sale-deed of the share of Mauza Raipura in favour of defendants Nos. 3 to 7 for a sum of Rs. 1,650. The plaintiffs have now some into Court and they seek to enforce the agreement of 1878 and demand that 'both' properties shall be sold to them by the first two defendants for the sum of Rs. 400, and they seek to set aside the sale in favour of the defendants Nos. 3 to 7. It is admitted that the properties which they seek to obtain are of the value at least of Rs. .3,200 according to paragraph 7 of the plaint. The Court of first instance, without taking any further evidence in the case, held that the suit should fail for three reasons. It held that the covenant was bad for remoteness, presumably meaning that it was indefinite in point of time. It also held that the eovenant was oppressive and unconscionable and ought not to be enforced. It held that the two documents read together could not constitute a mortgage. That was in reference to the plea raised by the plaintiffs that they may be treated as mortgagors and be allowed to redeem, This plea has been subsequently dropped and we are no longer concerned with it. The lower Appellate Court held that the covenant could not merely on the face of it be held to be unreasonable. It held that the agreement was not bad for remoteness. It then went on to hold, however, that it contravened the terms of Section 14 of the Transfer of Property Act in that it violated the rule against perpetuity. 04 that ground it upheld the decree of the Court of first instance. It seems to us that Section 14 of the Transfer of Property Act laying down the rule of perpetuity has nothing to do with the case. A contract for sale in this country does not convey any interest in property. It seems to us, however, that the suit must fail because practically the two documents of 1878 read together constitute a transfer of property subject to a limitation absolutely restraining the transferee from parting with or disposing of his interest in the contract. If we examine the agreement of 1878, it will be seen that the transferee of the property was absolutely forbidden to mortgage the property to anybody. Further, that he was forbidden to sell to anybody except to the transferor, and then only for the exact sum of Rs. 400. It nowhere compelled the transferor to accept the property if the transferee wished to part with it. Practically the effect of the agreement was to prevent the tranferee from ever transferring his property at all to anybody except to the vendor Ganga Din himself or his heirs and only if the latter cared to take it at the time. In paragraph 2 of the plaint the plaintiff said that the meaning of the deed was that whenever Putti Lal or his heirs wanted to sell any portion of the share of the two villages, he or his heirs would sell it to Ganga Din or his heirs and that when Ganga Din or his heirs did not care, then under such circumstances Putti Lal or his heirs will be entitled to mortgage or sell to other persons. As a matter of fact the deed does not give the transferee this option at all. He is by the . agreement tied hand and foot. It is impossible for him to transfer except at the will of the transferor Ganga Din or his heirs and then only if the latter are willing to take it for Rs. 400, It may be said that in form the deed does not absolutely restrain the transferee from parting with or disposing of his interest, but in substance we think that it does and it is to the substance of the agreement that we have to look and not so much to the form. We think that on this ground alone the suit should fail and the appeal, therefore, must fail. We accordingly dismiss it with costs, including fees on the higher scale. The two sets of defendants will be entitled to their separate costs.


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