1. The question which is raised for decision in this second appeal is whether the plaintiffs pre-emptors were liable to pay Rs. 8,750 for the property sought to be pre-empted or only Rs. 5,500 as found by the Courts below.
2. Ordinarily, the question as to the price which was paid for properties sought to be pre-empted is a question of fact, which cannot be considered in second appeal. In this case, however, it is alleged that, the law as laid down in Section 17 of the Agra Pre-emption Act, has been misapplied and that the judgment of the Courts below cannot be accepted.
3. We think it advisable, therefore, in the first instance to consider the provisions of Section 17 above mentioned. It is not to be denied that the section is unfortunately worded and obscure. Sub-section (1) states that where in any suit on the basis of the sale, the Court finds that the plaintiff has a right of pre-emption but that the ostensible price was not the actual price, it shall proceed to ascertain the actual price and shall pass a decree for pre-emption on payment of such price.
4. Sub Section (2) lays down that in such a case the burden of proving the actual price shall lie on the vendee, and, in the absence of satisfactory proof, the Court must proceed to ascertain the market value of the property and to pass a decree for pre-emption on payment of the value so found.
5. If sub-s (1) of Section 17 is literally interpreted it is difficult to see how the provisions' of Sub-section (2) can be given effect to, for under Sub-section (1) the Court finds that the ostensible price was not the actual price and then proceeds to call upon the vendee to prove what the actual price was. If the Court for example, in a case where the ostensible price was not the price mentioned in the sale-deed, namely, Rs. 10,000, finds that this ostensible price was not the actual price, how is it possible for the vendee then to try and prove the case that the price mentioned in the sale-deed, i.e., Rs. 10,000, was the price actually paid? We think, therefore, that the word 'finds' as used in Sub-section (I) does not mean that the Court must come to a definite conclusion that the ostensible price was not the actual price, but that the meaning is that, some evidence must be given by the plaintiff in order to raise a presumption that the ostensible price was not the price actually paid, A presumption of this kind having been raised in favour of the plaintiff, the burden of proof then shifts to the vendee and he has to satisfy the Court that the price shown in the deed was the price actually paid by him.
6. If he fails to satisfy the Court then all the Court can do is to enter into the evidence regarding the market value of the property and pass a decree for pre-emption on payment of the market value so found.
7. In the present case the property which was sold consisted of two shares situated in a village called Jalalpurwari. According to what is stated in the plaint, these two shares amounted to 3 annas, 7 pies and 15 karants, and in the plaint it was stated that the revenue payable in respect of this property was Rs. 82 odd per annum.
8. According to the sale-deed which is dated the 1st April, 1924, the price which the vendees paid for these properties was Rs. 8,750. According to what is stated in the deed and in the endorsement, Rs. 500 had been, paid as earnest money and it was represented that Rs. 8,250 were actually paid to the vendors in the presence of the Sub-Registrar.
9. The plaintiffs came into Court and stated that this price of Rs. 8,750 was wholly fictitious and that, as a matter of fact, the money which was paid to the vendors was Rs. 4,000 and no more. In para. 3 of the plaint it was stated that the market price of the property sought to be pre-empted does not exceed Rs. 4,000 and 'as a matter of fact the property has been sold for that sum'.
10. Before the trial began the plaintiffs' Pleader was asked to elucidate the meaning of this plea and his statement was to the following effect: 'Plaintiffs' Pleader states that only Rs. 4,000 were paid before the Sub-Registrar. The vendors counted the money before the Sub-Registrar and informed him that they had received Rs. 8,250. There was a fraud on the Sub-Registrar.'
11. We may now mention that no attempt was made to support the case thus stated by the plaintiffs' Pleader. The case for the defendants was that, as a matter of fact, the price was Rs. 8,750, namely, Rs. 500 paid as earnest money before the execution of the deed and Rs. 8,250 paid to the vendors in the presence of the Registering Officer.
12. The issue raised in the trial Court relating to the price was issue No. 5, what is the sale consideration? The Subordinate Judge thought that the provisions of Section 17, Sub-section (2) applied. He was of opinion that the burden of proving the actual price was shifted to the vendees. We do not think that the Subordinate Judge was wrong in laying the burden of proof upon the vendees, for it is clear from all the evidence on the record that the price alleged to be given in this particular instance was a very high price indeed. The Subordinate Judge refers to the evidence of the patwari, who stated that the net profits of this property came to Rs. 56 a year only. On this matter we are inclined to believe that these profits which the Patwari appears to have abstracted from the village papers, are unreasonably low. It was the plaintiffs' case, (and the Patwari admits it) that the land revenue of the property sold comes to Rs. 82 odd, and it seems to us very absurd to think that a property which pays this revenue, should bring in a profit of Rs. 56 only. The patwari in giving evidence admitted that he had not taken into consideration the income from certain dhak trees. It appears that there are 22 bighas of these trees in this village and it is reasonable to suppose that they brought in some income, and the patwari admits that this income was not included in his statement of the profits. While, however, we are not prepared to accept this evidence as being an accurate representation of the profits, we are of opinion that even on the basis that the profits were equal to the amount of revenue assessed upon it, the price was an exceptionally high one.
13. The Subordinate Judge then having shifted the burden of proof on to the vendees, proceeds to dispose of their evidence with the remark that it is of no value and no reliance can be placed upon it. He does not examine the evidence in any detail, nor criticise it, nor again does he make any reference to the fact that the statement of the purchasers is corroborated by a certificate of the Sub-Registrar in the registration endorsement. That endorsement is admissible under Section 60 of the Registration Act for the purpose of proving the truth of the statement contained in it. All that the Subordinate Judge says is this: The defendants have examined one of themselves Abdul Ghafur, Khwaja Hasan and others, but the evidence of none of them is of any value and no reliance can be placed upon it'.
14. He then proceeds to discuss certain documents which were produced by the parties, sale-deeds which were put forward for the purpose of showing what the rates of purchase are in this village. He does not seem to have drawn any definite conclusion from these documents. All he remarks is that from the deeds produced it appeared to him that the market price could not be more than Rs. 100 per pie, i.e., about Rs. 4,375 in respect of the share in dispute. This, however, is not the value which the Subordinate Judge has placed upon the property. He relied upon the evidence of a witness named Ibad-Ullah, who was called on behalf of the plaintiffs. Ibad-Ullah attested the sale-deed in suit and he made a variety of statements when examined as a witness. The Subordinate Judge has fastened upon one of these statements which apparently he was prepared to accept. This statement was altogether inconsistent with other statements made by Ibad-Ullah. Ibad-Ullah at the conclusion of his evidence stated that the sale was settled for Rs. 5,500. This is the statement which the Subordinate Judge has accepted and consequently he came to the conclusion that the pre-emptors would have to pay Rs. 5,500. It is to be noticed, therefore, that although the Subordinate Judge was of opinion that the vendees had not produced satisfactory proof of the actual price and although it was his duty under those circumstances to decide the case on the basis of the market value, he has not given his decision on this latter basis, but has accepted the evidence of Ibad-Ullah that Rs. 5,500 was the price arranged. The case came up in appeal before the District Judge. He refers in the first instance to the case which was presented to the trial Court in the statement made by the plaintiffs' Pleader and observes that no effort was made or indeed could have been made to support this case. The learned District Judge states that the Sub-Registrar's endorsement is in favour of the defendants' case and that there was also other evidence in the defendants' favour. He then goes on to point out that the first Court had found Rs. 5,500 to be the highest price, a price which gave an interest of one per cent, per annum on the capital invested. The Judge also referred to certain evidence given by the defendants themselves showing that property in the neighbourhood sold at from 20 to 100 years' purchase of the profits. He goes on to say that it was contrary to common sense to suppose that property sells at these high rates, except under very extraordinary circumstances, and being of opinion that the defendants had made no attempt to explain what he calls 'the amazing price', he upheld the order of the Subordinate Judge.
15. We have already discussed the construction to be placed on Section 17 of the Act, and we think, in the circumstances indicated, it is now proper for us to examine the evidence for ourselves. We may mention, in the first place, that it is very difficult to understand how the Subordinate Judge came to rely on the evidence of the witness Ibad-Ullah. Ibad-Ullah undoubtedly was an attesting witness to the sale-deed. This is what Ibad-Ullah says in his evidence when he was examined as a witness for the plaintiffs: 'I was in Sirathu Tahsil when the sale-deed was written. Aziz and the others sold the property for Rs. 8,750. A rukka for Rs. 200 and Rs. 500 in cash were given before the sale-deed was executed. Rupees 8,250 in cash were paid in the presence of the Sub-Registrar.' He said again, 'The rukka was for Rs. 2,000. The earnest money was Rs. 500. Rupees 8,250 in cash were paid in the Registration Office, The money was not counted before the Sub-Registrar. The Sub-Registrar enquired from the vendors if the money had been paid in full. Aziz answered, the money has been paid in full.' It was after this that Ibad-Ullah made the statement that the sale was settled for Rs. 5,500. In cross-examination, after admitting that he had witnessed the sale-deed, Ibad-Ullah stated that he had not gone inside the Registration Office, but was standing outside at the time when the deed was registered. We do not understand on what principle the Subordinate Judge picked out one solitary statement of Ibad-Ullah's in order to support a case which was not put forward even by the plaintiffs themselves. It is clear from what has been said above that Ibad-Ullah himself stated that Rs. 8,250 were paid in the presence of the Registering Officer. He made that statement twice and, of course, it may be that both statements are absolutely false. We have noted that in cross-examination he stated that he was not inside the Registration Office, but stood, outside. As Ibad-Ullah was making these conflicting statements, we think the duty of the Subordinate Judge was to reject his evidence altogether. We do not know why his statement that the sale was settled for Rs. 5,500 should be preferred to the other statement, namely, that the property was sold for Rs. 8,750. It was, we think, the duty of the Subordinate Judge to explain the reasons for his making a selection of this particular passage in Ibad-Ullah's evidence. The District Judge in appeal does not discuss the evidence of Ibad-Ullah. All he says is that no cross-objection has been taken to the finding that Rs. 5,500 was the actual price. He had no occasion to interfere.
16. Let us now examine the evidence in detail, which was put forward by the defendants. There has been no reasoned discussion of it in the judgment of either of the Courts below and it is for us to find whether any sufficient grounds have been made out for rejecting it. One of the purchasers was examined at great length. He deposed that Rs. 500 had been paid as earnest money and that Rs. 8,250 had been paid before the Sub-Registrar. He swore that no portion of this money had been returned to him: He gave in his examination-in-chief, various reasons why he was prepared to give a high price for the property. He said that the land was good land. He referred to the fact that the share included some 20 or 23 bighas of cheol trees, that there was canal irrigation in the village and he declared his readiness to purchase other lands in the village at even a higher rate. His cross-examination was lengthy and speaking of what took place in the Registrar's Office, he described how the money was counted in the presence of the Sub-Registrar. He said that he had paid Rs. 1,000 in notes and that the rest of the money was paid in cash. The money was placed in heaps on the floor. He says that the Sub-Registrar counted the heaps and then asked the vendors to count for themselves. He says that the vendors did so and then informed the Sub-Registrar that the money had been received in full. He said that the rupees had been placed in piles of Rs. 100 each. He further stated that the Sub-Registrar counted some of the money. He altered his statement then and said that the Sub-Registrar had counted all the money. He was pressed to say why he was so anxious to purchase the land in dispute. To this question he gave no very satisfactory answer. He first of all said that he had no need to buy the property, then he stated that he had need to buy it. Then he said that he had bought it because it was near to his own property.
17. Another witness called Khwaja, supports this evidence. He said that the entire money was paid. He also says that the Sub-Registrar looked at the bundle of notes and afterwards told the vendors to count the money, which they did. The witness in cross-examination made a different statement regarding the manner in which the heaps were arranged. He says that the money was piled up in the piles of Rs. 20 each. The Sub-Registrar, he says, counted a few of the piles and made an estimate. He also deposes to the fact that the vendors after counting the money told the Sub-Registrar that the price had beed received in full.
18. We have already mentioned that the endorsement of the Sub-Registrar is to the effect that the money was counted in the Registration Office and that the vendors stated that they had received the entire sum paid there, namely, Rs. 8,250. For what reason then are we to hold that this evidence is not reliable. In the first place, there is no direct evidence to contradict it, and if we were to rely upon the evidence of Ibad-Ullah, the witness whose statement the first Court accepted, we should have to hold that his statement corroborated the statements of the defendants' witnesses, for Ibad-Ullah also stated that the sum of Rs. 8,250 changed hands in the Registration Office. For the reasons we have given, however, we think that Ibad-Ullah's evidence ought to be ignored altogether. It is said that the plaintiffs are in great difficulty in a case of this kind inasmuch as they cannot be expected to contradict evidence, by the vendees for the purpose of showing what took place at the time of registration. That, however, is a difficulty which cannot be avoided from the nature of the case though we may remark incidentally that it did not present itself as a difficulty to the plaintiffs in this case, for, as we have pointed out, the case which their Pleader stated that he was going to prove was that, as a matter of fact, only Rs. 4,000 was paid in the presence of the Sub-Registrar. That case has failed and there is no support for it whatever. The fact that it is difficult for a plaintiff to rebut evidence given by the purchaser, must not be treated as sufficient reason for holding that, as a matter of fact, the price set out in the sale-deed is fictitious. It is quite clear to us that property in this village does sell at a high rate, and it is for this reason that we are disposed to think that the profits as stated by the Patwari, are not the actual profits. It may be remembered that when he was giving his evidence, Abdul Ghafur stated that he was willing to offer the plaintiffs even a higher rate for the land in their possession. That sort of an offer perhaps may be treated merely as a piece of bravado, but we were informed by the learned Advocate for the pre-emptors at the time of the hearing of the case that the plaintiffs would in no circumstances sell their ancestral property, that is to say, they would not accept any price howsoever high. We gather from this, that the value of property in this village must be extremely high and the plaintiffs, therefore, cannot complain if they have to pay a high price in the present suit. On a review of the whole of the evidence we are of opinion that there is no sufficient reason shown why the evidence put forward by the defendants in this case should not be accepted. Plaintiffs in preemption suits are very apt to imagine that they can acquire property at what they are pleased to call the market rate. It would be a mistake if pre emptors were encouraged in the motion that they can compel vendors to accept any price they may choose to offer for property which is being sold. The true market price of ordinary property is not easily to be ascertained and we think that if it is shown, as we think that it was shown in the present case, that the money set out in the sale-deed has actually changed hands, the plaintiffs must pay that sum if they desire to get that property by preemption. We have already stated that the plaintiffs came into Court with a case which they could not support and it is also shown how that they have succeeded on a case which was not put forward by them. They did not at any time plead that the actual price paid for the property was Rs. 5,500. On the contrary they stated that it was Rs. 4,000 only. The result of all this is that we are prepared to hold that the plaintiffs have failed to sustain the burden of proof which was laid upon them, and we are of opinion that the Courts below were wrong in giving a decree either on the basis on the market value or on the basis of some actual price which was deposed to by a witness whose evidence was unworthy of belief. We may observe here that a rival pre-emption suit was brought by the defendants No. 7--11. We understand, however, that these people have dropped out and have failed to take advantage of the decree passed in their favour in the Court of first instance.
19. We allow this appeal, set aside the decree of the Court below and order a decree to be prepared for pre-emption on payment by the plaintiffs of Rs. 8,750. That money must be paid into Court within three months from the date of this Court's decree. If so paid the plaintiffs' claim will be decreed with costs in all Courts including fees in this Court on the higher scale. In case of default, the plaintiffs' suit will stand dismissed in all Courts with costs including fees in this Court on the higher scale.