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Wazir Ali Khan Vs. Zahir Ahmad Khan and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtPunjab and Haryana
Decided On
Reported inAIR1949P& H193
AppellantWazir Ali Khan
RespondentZahir Ahmad Khan and ors.
Cases ReferredIn Mohammad Afzal v. Ghulam Mohammad A.I.R.
Excerpt:
.....elimination of the stranger and the substitution of a person against whom plaintiff had not a superior right. bahri urged that a transferee from a vendee who, at the time he purchased the property as well as at the time of the subsequent transfer, had not a right of pre-emption' either equal or superior to that of a prospective pre-emptor, cannot defend a suit for pre-emption brought by the latter on the strength of any qualification possessed by himself and that in resisting such suit he is confined only to the pleas which could have been taken by such vendee. the right came into existence effectively only when it was successfully asserted followed by the payment of sale price into court and so long as it was inchoate it was liable to be defeated. it follows that so long as a..........of the plaintiff.7. it was held that except where he can show that he acquired his title to the suit property in enforcement, out of court, of a right of pre-emption superior to that of the original vendee the transferee cannot be permitted to resist the suit except on the pleas which were open to the original vendee. this is a necessary corollary of the application of the rule of lis pendens. anything said in the two judgments relied on by the learned counsel was not intended to have any application to cases not affected by the doctrine of lis pendens.8. in delivering the main judgment of the full bench in madho singh and another v. lt. james r.r. skinner and ors. a.i.r. 1941 lah. 433 din muhammad, j. observed at page 165 of the report:in my view, the right of pre-emption does not.....
Judgment:

Achhru Ram, J.

1. The facts of this case are given at length in my order of reference dated 25th April 1947 and need not be repeated.

2. The question that arises for decision is whether in every case where the vendee in a sale sought to be pre-empted has re-transferred the property purchased by him to another person having a right of pre-emption either equal or superior to that of the plaintiff who sues to preempt the sale, and the suit is resisted by such transferee on the strength, of his own preemptive right, the latter has got to show that the re-transfer in his favour had been made in recognition of such right. If this question is answered in affirmative, it must follow that if the re-transfer has been made otherwise than by re-sale the transferee cannot resist the suit on the strength of his own pre-emptive right. The right of pre-emption being a right of preferential purchase, a person acquiring title to the property forming the subject-matter of the sale otherwise than by purchase, e.g., by gift or by exchange, cannot be deemed to have done so in enforcement of such a right. I am not unaware of the fact that Mahajan, J. in delivering the judgment of the Letters Patent Bench in Mohammad Afzal v. Ghulam Mohammad A.I.R. 1944 Lah. 463 did visualize the possibility of a gift being made in recognition of the donee's superior right of preemption. His Lordship has drawn an analogy between such a gift and an offer by a vendee in a pre-emption suit to have a decree passed against himself without the plaintiff being required to pay or deposit the sale price. The observations made by his Lordship, however, appear to overlook the provisions of Order 20, Rule 14, Civil P.C., prescribing the form in which a decree in a preemption suit has got to be passed. The rule provides that where the Court decrees a claim to preemption in respect of a particular sale of property and the purchase-money has not been paid into Court, the decree shall specify a day on or before which the purchase-money shall be so paid, and direct that on payment into Court of such purchase-money, together with the costs (if any) decreed against the plaintiff, on or before the day fixed for payment, the defendant shall deliver possession of the property to the plaintiff but that, if the purchase-money and the costs (if any) are not so paid, the suit shall be dismissed with costs. The rule also provides that the title of the decree-holder is to be deemed to have accrued from the date of payment of the purchase-money into Court. If a vendee in a suit brought to enforce the right of pre emption admits the plaintiff's claim but offers to surrender the property to him without taking any price and the Court passes a decree for possession of the property in the plaintiff's favour without requiring him to pay into Court the purchase money and without otherwise complying with the provisions of Order 20, Rule 14, Civil P.C., the decree cannot be deemed to be a pre-emption decree and the title which the plaintiff will acquire under the decree cannot be regarded as a title acquired by enforcement of a right of pre-emption.

3. After hearing Mr. D.N. Aggarwal for the appellant and Mr. Som Datta Bahri who appeared as an amicus curio in support of the judgment of the learned Senior Sub-Judge, the respondent being unrepresented, I am inclined to take the view that the answer to the above question must in each case depend upon the answer to the question' whether the re-transfer was made before the institution of the suit for pre-emption or during the pendency of such suit. If the re-transfer took place before the institution of the suit, the transferee can resist the suit on the strength of his own pre-emptive right regardless altogether of the consideration whether the transfer in his favour was made in recognition of his superior pre-emptive right or could otherwise be regarded as having been made in recognition of such right. In the result, it should be immaterial whether the transfer took the form of a sale, a gift or an exchange. So long as the transferee can be shown to have acquired the full title of the vendee under the sale sought to be pre-empted he can resist the suit on all pleas which would have been open to him had the sale in the first instance been made in his favour. If, however, the re-transfer took place after the institution of the suit, the transferee can plead his own equal or superior preemptive right in bar of the suit only if the transfer in his favour can be held to have been made in recognition of such right. In such a case, the transfer in order to clothe the transferee with a right to resist the plaintiff's suit on the strength of his own qualification must take the form of sale and must have been made at a time when his right to enforce his pre-emptive right by means of an action was still subsisting. It is settled law that unless a transfer pendente lite can be held to be a transfer in recognition of a subsisting preemptive right, the rule of lis pendens applies and the transferee takes the property subject to the result of the suit during the pendency where, of it took place (vide Moolchand v. Ganga Jal A.I.R. 1930 Lah. 356 F.B. and Mt. Sant Kaur v. Teja Singh A.I.R. 1946 Lah. 142.

4. It is true that in some of the earlier cases where the vendee had, subsequent to the sale but before the institution of the pre-emption suit, conveyed the property to a person with equal or superior right to the plaintiff, in holding that the comparison of qualification had to be made between the plaintiff and the transferee, emphasis was laid on the fact that in such a case the first vendee should be considered to have made the re-transfer in recognition of a preemptive right superior to his own. However, in some cases a subsequent transferee was held en-titled to resist the plaintiff's suit on the strength of his own equal or superior right even though, strictly speaking he could not be deemed to have acquired title to the property forming the subject-matter of the suit in enforcement of a superior preemptive right For example, in Mughal v. Jalal and Ors. 69 P.R. 1898, the land in suit had in the first instance been sold to three persons of whom two were co-sharers in the joint holding but one was not Subsequently the stranger vendee sold his share to another co-sharer in the same holding; Some time after this another co-sharer in the holding brought a suit to pre-empt the original sale, although at the time when the suit was instituted the land was in the hands of three vendees against none of whom the plaintiff could assert a superior right. It was, however, contended on the plaintiff's behalf that regard must be had to the original transaction in which two vendees, who had equal rights with the plaintiff, had lost that right by joining with them, in the purchase, a third whose right was inferior to that of plaintiff, and that the right of pre-emption which the plaintiff would in consequence have had as against the original vendees could not be defeated by the subsequent elimination of the stranger and the substitution of a person against whom plaintiff had not a superior right. The Chief Court overruled this contention of the plaintiff and held that the three persons who were the vendees at the date of the suit could resist the plaintiff's claim on the strength of their having a right of pre-emption not inferior to his own. The re-sale by the stranger vendee of his share to a co-sharer in the holding could not strictly speaking be regarded as a sale in enforcement of a superior preemptive right because such right extended to the whole of the property forming the subject-matter of the original sale and the co-sharer in question could not be deemed to have enforced his pre-emptive right unless he had taken over the whole bargain and had himself substituted for all the vendees in the original bargain Hira and others v. Sardara and Ors. 37 P.L.R. 1921 and Abdul Aziz and others v. Abdulla and Ors. A.I.R. 1925 Lah. 413 are two cases decided by the High Court of Lahore in which similar situations arose and although at the time of the original sale the vendees had no right of pre-emption on the strength of which they could have resisted the plaintiff's suit inasmuch as while some of them had a right of pre-emption equal to that of the latter they had joined with themselves a person who had no such right, but the share of the stranger having before the institution of the suit passed to another person having a right of pre-emption equal to that of the plaintiff the new vendees were held entitled to resist the suit on the strength of the qualification possessed by them.

5. Whatever may have been the position when the view taken by the Chief Court of the Punjab and the High Court of Lahore was that a vendee could not by any improvement in his status subsequent to the sale defeat the suit of a plaintiff who had a superior right of preemption at the date of the sale and who retained the qualification which gave him such right on the date when he instituted the suit, there does not appear to be any reason why a person who became the owner of the property forming the subject-matter of a suit for pre-emption before the institution of such suit should not be able to resist the suit on the strength of his own equal or superior pre-emptive right merely because he derives his title to the property from the purchaser under the sale sought to be pre-empted who himself had no such right, now that it is settled law that a vendee can improve his status at any time before the institution of the suit and can successfully resist a suit brought to enforce a right of pre-emption in respect of the sale in his favour on the strength of such improved status. The position of a transferee from the vendee cannot be regarded as inferior in any manner to that of his transferor. As a result of the transfer in his favour he steps into the shoes of such vendee and is clothed with whatever right, title or interest in the property such transferor had. It cannot be contended that while the original vendee could defeat a suit brought to pre-empt the sale in his favour by means of a subsequent improvement in his status, provided such improvement took place before the institution of the suit, his successor-in-interest, deriving title from him either by means of a transfer or by devolution in the due course of law, cannot avail himself of any improvement in his own status before the institution of a pre-emption suit for defeating such suit. If he can avail himself of a subsequent improvement in his status for the purpose, there is no reason why he should not be entitled to take advantage of a qualification possessed by him at the time the title to the property forming the subject-matter of the suit passed to him.

6. Mr. Bahri urged that a transferee from a vendee who, at the time he purchased the property as well as at the time of the subsequent transfer, had not a right of pre-emption' either equal or superior to that of a prospective pre-emptor, cannot defend a suit for pre-emption brought by the latter on the strength of any qualification possessed by himself and that in resisting such suit he is confined only to the pleas which could have been taken by such vendee. For this contention of his he tried to find support from certain observations made by Dalip Singh, J. in delivering the judgment of the Divison Bench in Regular First Appeal No. 63 of 1941 and certain observations in my judgment in Mt. Sant Kaur v. Teja Singh A.I.R. 1946 Lah. 142. The observations to be found in Dalip Singh J.'s judgment or in my judgment in the Full Bench case had reference only to the position of a transferee pendente lite and can have no relevancy to the present case. What was held in the two cases was that where the property forming the subject-matter of a suit for preemption is transferred by the original vendee after the institution of a suit for pre-emption, the transferee from the vendee takes the transfer subject to the result of the suit unless he can show that he took the transfer in enforcement of a subsisting right of preemption equal or superior to that of the plaintiff.

7. It was held that except where he can show that he acquired his title to the suit property in enforcement, out of Court, of a right of pre-emption superior to that of the original vendee the transferee cannot be permitted to resist the suit except on the pleas which were open to the original vendee. This is a necessary corollary of the application of the rule of lis pendens. Anything said in the two judgments relied on by the learned Counsel was not intended to have any application to cases not affected by the doctrine of lis pendens.

8. In delivering the main judgment of the Full Bench in Madho Singh and another v. Lt. James R.R. Skinner and Ors. A.I.R. 1941 Lah. 433 Din Muhammad, J. observed at page 165 of the report:

In my view, the right of pre-emption does not exist independently of its exercise so as to invalidate transactions which take place in defiance of it. It is no doubt a right of preferential purchase but so long as it is held in abeyance, it is ineffective altogether.

The above observations are followed by the following observations appearing at page 171:

The preemptor's right was not such as to make a transaction in favour of a stranger void ab initio. The right came into existence effectively only when it was successfully asserted followed by the payment of sale price into Court and so long as it was inchoate it was liable to be defeated.

I am in respectful agreement with the observations quoted above. It follows that so long as a pre-emptor has not taken effective steps to enforce his right of pre-emption, the vendee is free to dispose of the property purchased by him in any manner that he pleases and any transfer of the property made by him while the title to such property remains in him will effectively pass the title to the transferee. If the transfer has been made by him before the commencement of an action for the enforcement of a right of pre-emption, the title must be deemed to have passed to the transferee as completely and as effectively as it would have passed if the property had in the very first instance been sold to him. In any action brought to dislodge him from the property he can defend his title on all grounds which give him a legal defence. If at the time of the institution of a suit to pre-empt the original sale, the plaintiff did not possess a right of pre-emption superior to that of the transferee, it is obvious that he can have no right to dislodge the latter who can resist the suit on the ground of himself having an equal or superior pre-emptive right.

9. On a closer examination of the judgment of the Letters Patent Bench in Munshi Ram v. Maghar Mal and Ors. A.I.R. 1921 Lah. 363. I am of the opinion that there is no real conflict between this judgment and the later judgment in Mohammad Afzal v. Ghulam Mohammad A.I.R. 1944 Lah. 463. In Munshi Ram v. Maghar Mal and Ors. A.I.R. 1921 Lah. 363 the sale sought to be pre-empted took place on 28th January 1919 and the suit for the enforcement of a right of pre-emption was brought by the plaintiff on 24th January 1920. It was on 25th January 1920, i.e., one day after the institution of the suit, that the original vendee transferred the property forming the subject-matter of the suit by exchange to Munshi Ram who sought to resist the suit on the strength of his own superior preemptive right. The learned Judge held that the transfer having been made pendente lite could not adversely affect the plaintiff s right as it existed at the time of the institution of the suit and that the transfer having not been made in recognition of a superior pre-emptive right the transferee could not plead his own pre-emptive right in bar of the suit. On its facts, this case was of course correctly decided by the Bench and the decision is quite in accordance with the view expressed by me in an earlier part of this judgment. In Mohammad Afzal v. Ghulam Mohammad A.I.R. 1944 Lah. 463 the transfer took place before the institution of the suit and, therefore, there could be no question of the application of the doctrine of lis pendens and the subsequent transferee had every right to resist the plaintiff's suit on the strength of his own superior pre-emptive right and it was not necessary for him to show that the transfer in his favour had been made in recognition of such right.

10. The exchange by which the title to the suit land was transferred by the original vendee Usman Khan defendant 2 to Wazir Ali Khan defendant 3 having taken place long before the institution of the suit, the rule of Us pendens is clearly inapplicable. Wazir Ali Khan, therefore, had a right to resist the plaintiff's suit on all the pleas which he could have taken had the original sale been in his favour. He cannot be denied this right on the ground that the transfer in his favour was not and could not be in recognition of a superior pre-emptive right.

11. For the reasons given above, I would allow this appeal and setting aside the judgment and the decree of the learned Senior Sub-Judge would restore the decrees of the learned trial Judge dismissing the plaintiff's suit with costs throughout.

Ram Lall, C.J.

I agree.

Bhandari, J.

I agree.


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