Skip to content


Narayana Menoki Vs. Karthiayani - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKerala High Court
Decided On
Case NumberSecond Appeal Nos. 362 and 363 of 1957
Judge
Reported inAIR1962Ker122
ActsLimitation Act, 1908 - Schedule - Article 10
AppellantNarayana Menoki
RespondentKarthiayani
Appellant Advocate K. Muhammed Naha,; C.J. Antony and; P. Muhammed, Adv
Respondent Advocate V. Balakrishna Eradi and; K.P.G. Menon, Advs.
DispositionAppeals allowed
Cases ReferredToldi Narain Puri v. Ram Rachhya Singh
Excerpt:
(i) property - pre-emption rights - article 10 of schedule to limitation act, 1963 - suit for redemption of mortgage - mortgagee assigned her rights to another persons - mortgaged property sold - assignee of property claimed their pre-emption rights - whether assignee entitled to preemption rights - assignee not entitled to preemption rights. (ii) bar of limitation - article 10 of schedule to limitation act, 1963 - respondent mortgagee of property - whether respondent entitled to right of preemption - mortgagee can exercise her right of preemption within one year - in present case respondent did not exercise her rights within one year - respondent not entitled to right of preemption. - - and dismissed the suit for redemption while observing that the mortgage debt should have been.....m. madhavan nair, j.1. these appeals arise from two suits o. s. nos. 285 of 1953 and 38 of 1954, on the file of the, addl. district munsiff of kozokode. as the two suits have been tried and disposed of jointly by one judgment, it is convenient to refer to the parties with reference to one of the suits; and hereinafter they will be referred to by their rank in the first-mentioned suit.2. the material facts of the cases are as fo-low:-o. s. no. 285 of 1953, is a suit for redemption of a mortgage. the property originally belonged to the tarwad of the 2nd defendant. on march 12, 1877, the then kaniavan of the tarwad mortgaged the same to kunhitheyi amma as per an 'otti' deed (ext. b-1). by assignment the mortgage became vested in the 1st defendant. the 2nd defendant having become the last.....
Judgment:

M. Madhavan Nair, J.

1. These appeals arise from two suits O. S. Nos. 285 of 1953 and 38 of 1954, on the file of the, Addl. District Munsiff of Kozokode. As the two suits have been tried and disposed of jointly by one judgment, it is convenient to refer to the parties with reference to One of the suits; and hereinafter they will be referred to by their rank in the first-mentioned suit.

2. The material facts of the cases are as fo-low:-

O. S. No. 285 of 1953, is a suit for redemption of a mortgage. The property originally belonged to the tarwad of the 2nd defendant. On March 12, 1877, the then kaniavan of the tarwad mortgaged the same to Kunhitheyi Amma as per an 'Otti' deed (Ext. B-1). By assignment the mortgage became vested in the 1st defendant. The 2nd defendant having become the last survivor in his tarwad, sold the property to the plaintiff on March 2, 1953, as per Ext. B-2. The plaintiff issued a notice on March 6, 1953 to the 1st defendant demanding surrender of the property on redemption of the mortgage, and instituted the suit on March 14, 1953.

The 1st defendant was personally served with summons on March 27, 1953; but she remained ex parte. On July 6, 1953, she assigned her mortgage to defendants 3 and 4, who got themselves impleaded as supplemental defendants in the suit. On November 18, 1953, the 1st defendant applied for setting aside the order declaring her ex parte the same was allowed on December 7 1953, on which day, she and her assignees filed written statements in the case asserting a right of preemption and consequent non-liability to surrender the property to the plaintiff.

O. S. No. 38 of 1954, is a suit for pre-emption instituted on January 25, 1954, by the defendants 1, 3 and 4, in O. S. No. 285 of 1953 against the plaintiff and the 2nd defendant therein to enforce pre-emption in respect of the sale to the plaintiff (under Ext, B-2). The basis of their claim for the preferential right was the Otti morgage in favour of the 1st defendant which has been assigned by her to defendants 3 and 4.

3. The learned Munsiff decreed the suit for pre-emption in favour of defendants 3 and 4 directing them to deposit in Court before March 30, 1955, for payment to the plaintiff the consideration he had paid for the sale; and dismissed the suit for redemption while observing that the mortgage debt should have been deemed discharged entirely, under Section 9-A of the Madras Agriculturists' Relief Act, 1938, by the enjoyment of the property by the mortgagee for over 30 years wherefore the plaintiff would have been entitled to a decree for redemption without payment, but for the enforcement of pre-emption in the connected suit

The appeals preferred by the plaintiff before the Subordinate Judge, Kozhikode met with no success.

Hence these Second Appeals.

4. The material question that arises in these appeals is the right of an Otti mortgagee for preemption in respect of the mortgaged properly, and the conditions for its enforcement.

5. Etymologically, the word 'Otti' means 'gave place to another'. In law of property, Otti is a kind of usufructuary mortgage, current through-out the State of Kerala and the adjoining districts of the States of Madras and Mysore, under which the mortgagee is given possession of the mortgaged property to realise the interest on the mortgage money from the income of the property. In the southern districts of Kerala, it is nothing but a usufructuary mortgage with a personal covenant for repayment of the mortgage money. The entire usufruct of the property involved in the Otti is in-viriably taken by the mortgagee in satisfaction of the interest on the mortgage amount; and the transaction is redeemable on demand, except in the case of wet lands which can be redeemed only on the interval between the commencement of an agricultural year and the harvest of the previous crop (See Bhagavati Narayani v. Valliamma Kaliyam-ma, 14 Trav LR 218 and Korathu v. Cheria, 12 Trav LR 111.)

But in the northern districts (which constituted the District of Malabar in the State of Madras before 1956) an Otti implied a term of 12 years, involved an obligation on the part of the mortgagee to pay some nominal rent to the mortgagor (as is usual in Kauom demises) and carried with it a right of pre-emption to the mortgagee in case of disposition of the property by the mortgagor (See Rajaraja Varman Thirumalpad v. Krishnan Nair AIR 1958 Mad 117.)

6. The origin of the right of pre-emption conceded to Otti mortgages in Malabar is shrouded in mystery. It is often said to be an evolution of custom in the area.

7. The fact that this district was under the, sway of the Mohammedan Kings of Mysore for about three decades before 1800 A. D. probabilises its origin being the Mohammedan law then administered in the region. In Audh Behari Singh v. Gajadhar Jaipuria, AIR 1954 SC 417 a Constitution Bench of our Supreme Court observed:-

'The Privy Council has said in more cases than one ..... that the law of pre-emption was introduced in this country (India) by the Muham-madans. There is no indication of any such conception in the Hindu Law and the subject has not been noticed or discussed either on the writings of the Smriti writers or in those of later commentators.....

During the period of the Mughal emperors the law of pre-emption was administered as a rule of common Jaw of the land in those parts of the country which came under the domination of the Muhammadan rulers, and it was applied alike to Muhammadans and Zimmees, (within which Christians and Hindus were included) no distinction being made in this respect between persons of different races and creeds ......

In course of time Hindus came to adopt preemption as a custom for reasons of convenience and the custom is largely to be found in provinces like Bihar and Gujarat which had once been integral parts of the Muhammadan empire .....

Since the establishment of British rule in India, the Muhammadan law ceased to be the general law of the land and as pre-emption is not one of the matters respecting which Muhammadan law is expressly declared to be the rule of decision where the parties to a suit are Muhammadan' the Courts in British India administered the Muhammadan law of pre-emption as between Muhammadans entirely on grounds of justice, equity and good conscience.

Here again there was no uniformity of views expressed by the different High Courts in India and the High Court of Madras definitely held that the law of pre-emption, by reason of its placing restrictions upon the liberty of transfer of property could not be regarded, to be in consonance with the principles of justice, equity and good conscience. Vide 'Krishna Menon v. Keshayan ILR 20 Mad 305. (See Alabi Koya v. Mussa Koya, ILR 24 Mad 513 at p. 520). Hence the right of pre-emption is not recognised in the Madras Presidency at all even amongst Muhammadaris except on the footing of a custom.'

In Jadulal Sahu v. Janki Koer, 39 Ind App 101 (PC) where all the parties (the pre-emptor, the vendee and the vendor) were Hindus, and the contention was the non-applicability of Muslim law of pre-emption to non-Muslims, the Judicial Committee of the Privy Council observed:-

'The law of pre-emption, under which the plaintiff claims the right, was introduced into India with the Mahommedan government. The Province of 'Behar, to which the district of Chumparan appertains was an intergal part of the Mahom-medan Empire, and consequently it would not he surprising to find that in Behar the right of preemption is enforceable irrespective of the persuasion of the parties concerned.'

8. In the State of Madras, however, pre-emption did not attain currency. In Ibrahim Sahib v. Muni Mir Udin Saib, 6 Mad HCR 26 Holloway Ag. C. J, examined the ground on which the Mahommedan law of pre-emption was founded and came to the conclusion that it was manifestly opposed to both (equity and good conscience) and that no such obligation in this Presidency binds a Mahomedan or any one else.' (See also Mulla's Mohammedan Law, paragraph 227).

9. Thus while pre-emption was well known in North India which was under the Mahomedan rule for about six centuries of the Medieval. Period it was scarcely recognised in South India. It is not surprising therefore to find the early decisions in the Madras High Court straying far and wide on this subject.

10. The earliest of such decisions are summarised in Moore's Malabar Law and Custom (3rd Edn. 1905), at page 251, thus:-

'The right of pre-emption was first recognised by Mr. Cook as sub-Judge of Calicut in 1854 and again by Mr. Holloway in the same Court in Chaten v. Banian Nayar, (1856) where he held that, till the ottidar refused to purchase to no other person could the jenm right by the custom of Malabar be sold.' The Sudder Court (Hooper and Goodwyn) confirmed this decision and laid clown that the jenmi, having parted with his unfettered right of sale and retained only a conditional right to sell on the ottidar's refusal to purchase at a certain fixed amount, the jenmi's sale to a third party was an infraction of his contract to the otti-holder and consequently invalid. (Sudder Deci-sions, 1857, p. 121.)'

Here, we find an unmistakable recognition of a right of pre-emption in the Otti mortgagees in Malabar. But the Sudder Court of Madras seems to have taken it as a contractual right and held its violation by the mortgagor as 'an infraction of his contract to the Otti holder.'

The observation of Mr. Holloway, who was no mean authority on the customs of Malabar, 'Until the refusal of the Otti holder to purchase to no other purchaser could the jenm right by the custom of Malabar be sold,' and, the direction he gave to the transferee of the equity offened aption with notice of the Otti to transfer the same to the otti holder on receipt of the price manifest a correct view of the right of pre-emption. But when the matter went in appeal before the Sudder Court of Madras, the decision of Mr. Holloway was set aside and the Ottidar was allowed to avoid the sale without offering himself to become the purchaser.

In Amhu v. Raman, ILR 9 Mad 371 a puisne mortgage executed without notice to the prior Otti mortgagee and without giving her an opportunity for making the further advance, was held unenforceable against the properties, as it was vio-lalive of the Ottidar's right of pre-emption.

In Chathu Nair v. Soolapani Variar, (1911) I Mad WN 263 an Otti mortgagee sued to set aside a puisne otti mortgage executed without his consent; and it was declared that the puisne mortgage was 'invalid as against the plaintiffs Otti right and cannot affect it'.

As observed in Sankaran Moosad v. Ussain Haji, JLR 30 Mad 388, the effect of the decisions was to convert the right of pre-emption 'from a right of election (for substitution) to a right of veto'.

11. However, in Vasudevan v. Keshayan, ILR 7 Mad 309 the holder of a 'Veppu' mortgage (which was equivalent to an Otti) sued to set aside a puisne mortgage executed without his consent, and an execution sale of the equity of redemption on the ground that his right of pre-emption was injured thereby. It was held: 'The veppu holder was not entitled to have either the jenm pana-yam (puisne mortgage) or the auction sale set aside'. His right was only to claim a transfer to himself of the rights of the transferees thereunder.

12. In Cheria Krishnan v. Vishnu, ILR 5 Mad 198 the right of pre-emption was held available against a Court auction purchaser of the pre-emptional property and a good defence to a claim for redemption of the otti by such purchaser.

Kanharankutti v. Uthotti, ILR 13 Mad 490 reiterated the above dicta and held that such defence would not fail by lapse of time or get extinguished under section 28 of the Limitation Act.

In Ukku v. Kutti, ILR 15 Mad 401 the Courtauction purchaser sued to redeem a kanom; but itappeared that the defendant (the kanomdar) hadan earlier Otti on the land and had not waivedhis right of pre-emption as an Ottidar. It was heldthat on payment by the defendant of the purchasemoney to the plaintiff, the latter was bound toconvey the property to the defendant, and thatplaintiff could claim to redeem the kanonidar onlyif the latter refused to pre-empt within the timeallowed by Court.

Thus, we find in these cases the Ottidar being allowed to enforce his right of pre-emption even against an auction-purchaser of the equity of redemption in execution of a decree against the mortgagor.

13. This view came to be rectified in Vasudevan Moosad v. Ittirsrichan Nair, ILR 41 Mad 582 : (AIR 1919 Mad 1173) (FB). which laid down:-

'A Malabar Otti mortgagee has no right of pre-emption against a purchaser in Court auction of the mortgaged property'.

In laying down the above rule their Lordships were only following the well-considered dictum of Mahmood, J., in Baij, Nath, v. Sital Singh, ILR 13 Ali 224 at p. 230:-

'A compulsory sale, such as a sale in execution of a decree or a sale under an authoritative order of the revenue authorities for arrears of government revenue does not render pre-emption en-forcible, whether such right is claimed under Moharnmadan law, the terms of the Wajib-ul-arz or on the ground of local custom or private contract'.

14. In ILK 20 Mad 305 the suit was by the purchaser of the equity of redemption under an instrument executed 16 years before date of suit to redeem the Otti on the property and it was held.

'The defendant Ottidar's right of pre-emption was not extinguished under the Limitation Act, Section 28 and that they were not precluded from asserting it by Article 10 owing to a lapse of time'.

Hence the right of pre-emption was a good defence to a claim for redemption by an assignee of the equity of redemption which could be availed of without any fear of a bar by the law of limitation,

This view was dissented from in ILR 30 Mad 388 by Sir Arnold White C. J. and Miller J. who observed:

'In our Opinion the Ottiholder's right cannot be placed as a bar to the plaintiffs right to re-deem without an offer to purchase that right. The second defendant has not even now offered to do this and we do not think that even if he did so we could give effect to his offer in this suit. Sir Bhashyam Ayyangar in Ramaswami Pattar v. Chin-nan Asari, ILR 24 Mad 449 at p. 465 has pointed out that the decree in ILR 15 Mad 401 gives relief to the Otti-holder as if in a cross suit, and he suggests that that may be an irregular way of dealing with a suit for redemption (vide at page 465 of the report) and since that case a Full Bench of this Court has held that such counter-claims cannot be entertained in this country. (Kurri Veera-reddi v. Kurri Bapireddi, ILR 29 Mad 336).

15. I could not escape wonderment (may I be forgiven for saying so) when I read the dictum in In re Kunni Moideen, AIR 1953 Mad 519 to the effect;

'The Ottidar is entitled to a right of pre-emption by paying a reasonable price to the mortgagor selling the properties, and the piles need not be the price which is offered by a stranger'.

Obviously this means that even if there be higher offers to the mortgagor he is bound to sell the property to the Otti-mortgagee at a price which the court may Gx as reasonable, for the properly. This is not pre-emption but a right of compulsory purchase.

16. In Gobind Dayal v. Inayatullah ILR 7 All 775 (FB) Mahmood J. (with whom the other four learned Judges concurred) observed:

'The right (of pre-emption) ..... is not free from definite qualifications, among which the most important is that the pre-emptor complaining of the intrusion of the purchaser should place himself absolutely in the position of the purchaser with reference to the terms of the contract of sale, such as the amount and payment of price, etc. It is obvious, then, that before a pre-emptor can make up his mind to assert his pre-emptive right, he must ex necessitate rei, know definitely who the purchaser is and under what terms he has purchased the property, because it may well be that, on the one hand, he may have no objection to such purchaser, and On the other hand even if he does object, he may not be in a position to pay the price which the purchaser has paid'.

17. In another part of the same decision, the-learned Judge held :

'It (right of pre-emption) is simply a right of substitution, entitling the pre-emptor, by means of a legal incident to which sale itself was subject, to stand in the shoes of the vendee in respect of all the rights and obligations arising from the sale, under which he derived his title. It is in effect, as if in a sale deed the vendee's name was rubbed out and pre-emptor's name inserted in its place'.

This passage was cited with absolute approval by our Supreme Court in Bishan Singh v. Khazan Singh, AIR 1958 SC 838.

18. In the face of the above clear dictum, which was accepted by the Supreme Court, it becomes quite unnecessary to advert to the several decisions of the High Courts on the matter. The right of pre-emptor is to be simply substituted in the place of the vendee in respect of all the rights and obligations arising from the impugned sale. It is as if the sale deed that was executed was really in favour of the pre-emptor. The pre-empting Ottidar has therefore to pay the price whch is the consideration for the offending sale Or which is offered by any third person for the property, and cannot insist for a sale to him 'at a reasonable price'.

19. In order to have a correct idea of the right, of pre-emption, a little analysis of its nature becomes necessary.

The right of pre-emption has apparently two distinct phases :

(i) the primary or substantive right and

(ii) the secondary or remedial right.

The primary right of pre-emption is the right to have the first offer of an intended sale; so that a sale to a stranger, without making the first offer to the pre-emptor, would be an infringement of this right. The remedial right of pre-emption is a right to be substituted in the place of the vendee who made the offending purchase. The primary right exists before the sale takes place; the remedial right arises when the sale has taken, place. The primary right avails against the owner of the pre-emptional property; the remedial right avails against the purchaser of the pre-emptional property. The primary right is inherent to the pre-emptive property, and passes along with it to the assignee thereof; in other words it runs with the pre-emptive property.

The remedial right inheres only in the person who is the owner of the pre-emptive property a the time of the sale which gives rise to the exercise of pre-emption; it is more or less personal to him; a transfer of the pre-emptive property after the offending sale has taken place will not transfer the right to enforce pre-emption to the transferee. (See Sheo Narain v. Hira, ILR 7 All 533 (FB) and Jasudin v. Sakhatam Ganesh, ILR ;30 Bam 139).

Thus the two rights are entirely distinct rights, though sometimes they are loosely described as two aspects of the same right. To make the distinction obvious, certain authors call the primary right as ''the right of pre-emption', while the remedial right is called 'the right to pre-empt'. (See the Law of Pre-emption by Dr. M. L. Agarwala, 6th Edn. P. 35).

20. The distinction between the primary right and remedial right was noticed by our Supreme Court in AIR 1958 SG 838. In defining 'the material incidents of the right of pre-emption' their Lordships quoted 'the concise but lucid statements of the law' given by Plowden, J. in these words:

'A preferential right to acquire land, belonging to another person upon the occasion of a transfer by the latter, does not appear to me to be either a light to or a right in that land. It is jus ad rem alienum acquirendum and not a jus in re aliena ...... A right to the offer of a thing about to be sold is not identical with a right to the thing itself, and that is the primary right of the pre-emptor. The secondary right is to follow the things sold, when sold without the proper offier to the pre-emptor, and to acquire it, if he thinks fit, in spite of the sale made in disregard of his preferential right, and held:The aforesaid passage indicates that a pre-emptor has two rights : (1) inherent or primary right, i.e., right to the offer of a thing about to he sold and (2) secondary or remedial right to follow the thing sold.

21. When our Supreme Court in AIR 1954 SC 417 at P. 423 observed :

''the right of pre-emption ..... is an incident of property and attaches to the land itself'

Their Lordships were referring to the primary right of pre-emption only. The contention before their Lordships was that 'even if there was a custom of pre-emption (in Banares) it could not be availed of in a case where neither the vendors nor the vendee were natives of or domiciled in Banares but were residents of a different province', the property concerned being situate in Banares. Obviously, this contention relates to the existence of a right of pre-emption in respect o the property concerned and not to the enforcement of a conceded right. The right in question in such a case can only be the primary right.

22. Courts are mostly concerned with the remedial right of pre-emption only, unless the case be for an injunction to restrain a proposed sale offending one's right of pre-emption.

23. In the earlier paragraphs I have attempted a narration of the various decisions of the Madras High Court concerning the right of preemption of an Otti mortgagee in Malabar. It is to be noted that none of those rulings has laid down how exactly the right is to be enforced in a suit or dealt with the conditions of its enforceability.

24. In Jagmohan Prasad v. Brijendra Bahadur Singh AIR 1924 All 523 Sulaiman J. (with the concurrence of Kanhaiya Lal J.) has observed :

'Where we have the existence of a right of pre-emption without specifying how that right is to be enforced, or exercised or without laying down the full particulars of that custom, the presumption is that that right of pre-emption is in accordance with the rights allowed by the Muhammedan law. This view has been laid down in a number of cases of this court, Jagadam Sahai v. Mahabir Prasad, ILR 28 All 60 and Zamir Abmad v. Abdul Razzak, ILR 37 All 472 : (AIR 1915 All 260). These cases have also been followed in subsequent cases.'

In Jagannath v. Inderpal Singh, AIR 1935 All 236 which is a case among Hindus, it is held:

'In the absence of proof of modification, if a custom of pre-emption is proved to exist the custom must be in accordance with Mohammedan Law'.

In laying down this dictum. Their Lordships freely relied, on Zamir Husain v. Daulat Ram, ILR 5 All 110 and Ram Prasad v. Abdul Karim, ILR 9 All 513 and observed :

'In ILR 5 All 110 it was held by a Bench of this Court that where the custom of pre-emption exists it must be presumed to be founded on, and co-extensive with the Mohammadan law upon that subject, unless the contrary be shown; that the court may, as between Hindus, administer a modification of law as to the circumstances under which the right may be claimed, if it is shown that the custom in that respect does not go the whole length of the Mohammadan law of pre-emption, (p. 1.13):

'It may therefore be safely laid down that in all cases in which the right of pre-smption is claimed, the courts in administering equity will. In analogy follow the rules of the Mohammedan law of pre-emption even in cases where the right is not claimed under that law but under local usage or custom. The rules of customary pre-emption no doubt depend upon the custom itself, but where such custom is silent upon any particular point, the rule of the Mohammedan law of pre-emption upon that point must by analogy be taken to be the rule of decision.' In ILR 9 All 513 it was held that in the absence of any special custom different from, or not co-extensive with, the Mohammedan law of preemption that law must be applied to the case.'

25. Adverting to the Mohammedan law on the subject, all authorities are agreed that the right of pre-emption is an exceedingly feeble right, not at all favoured by law; and therefore any One seeking to enforce it must prove that he has strictly complied with all the requirements of law for its enforcement

'Pre-emption is not favoured by the law..... The right of shufa (pre-emption) is but a feeble right, as it is a dis-seizing another of his property, merely in order to prevent apprehended inconveniences.'

(Tyabji, Mohammadan Law, 3rd Edn. P. 725, also Hamilton's translation of the Hedaya).

'The right of pre-emption, ..... is an exceedingly feeble right; it gives One the power of dis-seizing another who has acquired properly in a bona fide manner for good value; and if it is to be exercised, the ritual of the talabs (demands) must be observed to the letter. The right is strictissimi juris and the slightest deviation from the formalities required by law will prevent its accrual.'

(Ahdul Rasheed v. Md. Idris Chowdhury, AIR 1946 Cal 35.)

'The right of pre-emption is a very weak right. It interferes with the freedom of contract and is opposed to a progressive state of society. It can therefore be enforced only if it is clearly established'

Durga Singh v. Girwar Dutt Joshi, AIR 1938 All 191, (a case among Hindus)

'It is also well settled that the pre-emption is a weak right and the rules have therefore to be strictly enforced.'

Badri Dutt v. Shrikishan, AIR 1954 All 94.

''The right of pre-emption is in derogation of the common law and even where it is recognised, it is ad miseri cordiam ..... There must be clear proof of the observance of formalities prescribed.'

Jagarinath. Rugbainath v. Ranchhod Chansiram, AIR 1950 Madh B 40 (a case among Hindus).

In the words of Vivian Bose, J.

'The right of pre-emption is a very special right. It displaces ordinary legal rights and places restrictions upon normal rights of conveyance. Consequently, a person, who wishes to avail himself of such a right must exercise that upmost vigilance and take care to see that he complies strictly with all the conditions imposed on him.'

(Keshav v. Krishna, AIR 1939 Nag 107).

Thus it is clear that to enforce a right of preemption it is not enough if one proves the existenceof the right in one but must also prove that onehas strictly observed all the conditions of its enforcement.

26. The conditions of enforceability of aright of pre-emption in Mahomedan Law are detailed in Mulla's Mahomedan Law, Paragraphs 233,236 and 241 thus :

'233. Ground of pre-emption must continue until the decree is passed.-- The right in which preemption is claimed ..... must exist not only at the time of sale, but at the date of the suit for preemption, and it must continue up to the time the decree is passed. But it is not necessary that the right should be subsisting at the date of the execution of the decree or at the date of the decree of the appellate Court. The reason is that the crucial date in these cases is the date of the decree of the Court of first instance.'

'236. Demands for pre-emption. -- No person is entitled to the right of pre-emption unless--

(1) he has declared his intention to asserb the right immediately on receiving information of the sale. This formality is called talab-i-mowasibat (literally, demand of jumping, that is, immediate demand); and unless

(2) he has with the least practicable delay affirmed the intention, referring expressly to the fact that the talab-i-mowasibat had already made, and has made a formal demand--

(a) either in the presence of the buyer, or the seller, or on the premises- which are the subject of sale, and

(b) in the presence at least of two witnesses. This formality is called talab-i-shhad (demand with invocation of witnesses).'

'241. Bight lost by Joinder of plaintiffs not entitled to pre-empt--If plaintiff who has a light of pre-emption joins with himself as co-plaintiff a person who has no such right, he is not entitled to claim pre-emption, and the, suit must be dismissed.'

27. In AIR 1950 Madh B 40, though the parties were Hindus, the observance Of the formalities prescribed by Mohammedan law for enforcement of a right of pre-emption was held essential to entitle the plaintiff to a decree for redemption ;

'There must be clear proof of the observance of formalities prescribed, It is time that the two demands may in certain circumstances be combined; but in the latter case the correct principle .....is .....that when a second demand is made after invoking witnesses, a mention of the first demand is necessary in order to inform the vendee that it was property made as required by law.... Judged in this light, there is no proof of the plaintiff having affirmed in the presence of the vendor and the witnesses that he had made a talab-i-mowasibat and the combination of the demands even if it were justified in this case does not help the plaintiff.''

28. Sir D. F. Mulla has observed in his 'Principles of Mohammedan Law', para 229:

'The right of pre-emption is recognised by custom among Hindus ..... and it is governed by the rules of Mohammedan Law of pre-emption except in so far as such rules are modified by such custom.'

29. Our Supreme Court has held in, AIR 1954 SC 417 at p. 422:-

'The Privy Council in 39 Ind App 101 (PC) expressly laid down that when a custom of preemption is established by evidence to prevail amongst non-Muslims in a particular locality,

'it must be presumed to be founded on and co-extensive with the Mohammedan Law on that subject unless the contrary is shown; that the court may as between Hindus administer a modification of the law as to the circumstances under which the right may be claimed when it is shown that the custom in that respect does not go to the whole length of the Mohammedan Law of pre-emption, but that the assertion of right by suit must always be preceded by an observance of the preliminary forms prescribed in the Mohammedan Law which forms appear to have been invariably observed and insisted on through the whole of the cases from the earliest times of which we have record.' In the case before us no attempt was made by the defendants to show that the custom of preemption set up and proved by the plaintiff was of a character different from that which is contemplated by Mohammedan Law.'

30. In fact their Lordships' quotation is really of a passage that was in the judgment of Sir Barned Peacock C J. in Fakir Rawat v. Sheikh Emambaksh, Beng LR Sup Vol 35 (FB), where His Lordship held that

'..... a right Or custom of pre-emption is recognised as prevailing among Hindus in Behar, and some other provinces of Western India; that in districts where its existence has not been judicially noticed, the custom will be a matter to be proved; that such custom when it exists must be presumed to be founded on and co-extensive with the Mohammedan law upon that subject, unless the contrary be shown; that the court may, as between Hindus, administer a modification o that law as to the circumstances under which the right may be claimed when it is shown that the custom in that respect does not go the whole length of the Mohammedan law of pre-emption, but that the assertion of the right by suit must always be preceded by an observance of the preliminary forms prescribed in the Mohammedan law, which forms appear to have been invariably observed and insisted on through the whole of the cases from the earliest times of which we have record.'

In the judgment of the Judicial Committee of the Privy Council the above dictum of Sir Bames Peacock C. J. was 'conclusive of the point' and applying the same to the case at hand in which 'all the parties in the transaction, namely, the pre-emptor, the vendee and the vendor, are not Mohammedans,' their Lordships held :

'The Mussalman law insists that the first formality technically called 'the immediate demand' should be observed by the pre-emptor or some one on his behalf immediately on receipt of the news of the sale, otherwise the right of pre-emption falls to the ground. The second formality consists in the repetition of the 'demand' with as little delay as possible under the circumstances, in the presence of witnesses either before the vendor or the vendee or on the premises. The courts in India have found that the ceremonies were duly performed by the manager in accordance with the prescriptions of the law. Had he failed in performing either of the ceremonies, he would have caused irreparable loss to the plaintiff, as her right would have been absolutely defeated by his laches. In their Lordships opinion, Mr. Lewis, as manager of the plaintiffs' estate, was competent, ..... to observe the formalities on her behalf.'

31. In AIR 1954 SC 417 at p. 423 it is held: When the right (of pre-emption) is created by custom it would be, as the Privy Council has said, co-extensive with the right under Muhammadan law unless the contrary is proved. This means that the nature and incidents of the right are the same in both cases.'

32. Thus it is clear that, even if all the parties concerned were Hindus (as was the case in 39 Ind App 101) and the pre-emption was a matter of local custom, the principles of Mohammedan law of pre-emption have to be applied, unless a custom to the contrary is established in the case. I may at once say that there is no such proof or even an averment that the custom as to the pre-emption of ottidars in Malabar is anyway different from the general law of pre-emption.

33. There is no proof of any demands having been made in the case. On the other hand the 1st demand for pre-emption ever made by the defendants was only in their written statements filed on December 12, 1953 which cannot satisfy the requirements of law mentioned in paragraph 26 above. For several months after the 1st defendant was served with a copy of the plaint, in which the sale by the mortgagor in favour of the plaintiff has been expressly mentioned, the 1st defendant made no attempt to assert her rights. More than three months after the receipt of such information, she executed an assignment of her otti in favour of defendants 3 and 4; and it is only thereafter that we find the 1st defendant raising a claim for pre-emption. It follows therefore that for want oil observance of the essential formality of an 'immediate demand' the 1st defendant had lost her right to pre-emption in this case.

34. Further, as mentioned above, for a Plaintiff to succeed in a suit for pre-emption, he must show that the right was in him at the time of the sale, at the date of the suit and it continued in him till the decree is passed by the primary court.

In AIR 1954 All 94 it is observed:

'The consistent view, however, of this court has been that a pre-emptor must have a right of pre-emption on three dates; firstly the data of sale secondly the date of suit, and thirdly the date of the decree. It is also well settled that the pre-emption is a weak right and the rules have therefore to be strictly enforced.'

In Harbhagavan Das v. Pratap Singh, AIR 1938 Lah 242 it is observed :

'There is overwhelming authority in support of the proposition that a pre-emptor in order to succeed in his claim must not only possess a superior right at the time of the sale but must retain the superiority on the basis of which he claims to pre-empt also at the stage of the suit and the stage of the decree.'

In Salamat Ali v. Nur Muhammad, AIR J934 Oudh 303 it is observed :

'It is true..... that the right of a plaintiff to enforce pre-emption must exist not only at the time of the sale but also at the time of the institution of the suit to enforce that right, and that if the plaintiff loses that right, after the sale or at any time after the institution of the suit and before the decree for pre-emption can be passed in his favour, he is put out of court and no relief could be granted to him.'

(See also Hans Nath v. Ragho Prasad, AIR 1932 PC 57, Gaya Prosad v. Faiyaz Hussain, AIR 1930 Oudh 274 (FB) Mohammed Ibrahim v. Zahur Ahmad, AIR 1931 Oudh 281 (FB) and Mohd Zafar v. Mt. Taj Bibi, AIR 1936 Oudh 250).

In Rani Manraj Kuer v. Basant Rai, 171 Ind Cas 891 (Oudh) it was held that if the plaintiff in a suit for pre-emption gives away the property, that qualified him to exercise the right of pre-emption, 'at any time after the institution of the suit and before a decree for pre-emption is passed in his favour, he is put out of court and no relief can be granted to him'. He had no locus standi to prosecute the suit after he had lost the property the possession of which gave him the title to preempt the sale.

35. In this case it is evident that the 1st defendant had lost her right of pre-emption by the assignment of her Otti in favour of defendants 3 and 4 before she entered appearance in the suit and has therefore disentitled herself to pre-emption and defendants 3 and 4 having come in the field only long subsequent to the offending sale bad no right to any pre-emption at the time of the sale and as such cannot claim it in this suit.

36. Hamilton's translation of Hedaya shows that:

'...... the cause of foundation of the right of pre-emption is the conjunction of the pre-emptive tenement with the pre-emptional tenement, that it object is to obviate the inconvenience or disturbance which would arise by the introduction of strangers, .....Mohammedan Law, nowhere recognizes any right of veto in the pre-emptor, nor does it impose any positive legal disability on the vendor in this respect ..... The object of the right is to prevent the intrusion, not of all purchasers in general, but only of such as are objectionable from the pre-emptor's point of view.'

The right of pre-emption conceded to ottidars must be based on the inconvenience arising from his ouster by a stranger. Even though the right is not claimed under Mahommedan law but under a local custom recognised by precedents, the rules of the Mohammedan law must, as observed by the Supreme Court, be applied by analogy, because the only system of law to which we can look for guidance in the matter is the Mahommedan law which brought this right to India, As observed by Mah-mood J. in ILK 7 Ali 535 :

'Under that law, when the ownership of the pre-emptive tenement is transferred..... the trailsfer ..... passes pre-emption to the person in whose favour the transfer ...... takes place; but the rule is essentially subject to the proviso that such person cannot enforce pre-emption in respect of any sale which took place before such transfer ..... The reason why, although the right of pre-emption runs with the land, the plaintiff ...... cannot be allowed to enforce it, is that to rule otherwise would in effect be to allow a 'stranger' to oust one who was not a stranger at the time of the sale.'

Applying the above principles to the present case, we find that on July 6, 1953 when the 1st defendant assigned her Otti to defendants 3 and 4, the latter were strangers to the property, and plaintiff was the owner of the property. Defendants 3 and 4 by their purchase of the Otti right on July 6, 1953 cannot acquire a preferential right to the property which had already vested in the plaintiff by the conveyance of March 2, 1953 from the lawful owner thereof. As between defendants 3 and 4 on one hand, and the plaintiff on the other, the preferential right to the property must naturally be on the plaintiff only. Hence defendants 3 and 4 who came by the otti mortgage only on July 6, 1953 cannot have any right of pre-emption in respect of the sale on March 2, 1953 which is an earlier interest than their Own.

37. No doubt, on the date when the plaintiff purchased the property, the 1st defendant had a right of pre-emption which she could very well have asserted against the plaintiff. But, she did not choose to exercise that in time. Even after receipt of the copy of the plaint in the case on March 27/1953 carrying express information of the plaintiff's purchase, she kept quiet till December 7, 1953 without claiming any pre-empfion. Not having made the ''demands' which are essential pre-requisites of the right, she lost her right. The right of pre-emption once lost cannot revive.

38. The learned counsel for the respondent contended that the law of limitation allows one year for exercise of the right of pre-emption, and the claim having been put forth by the 1st defendant on December 7. 1953 in respect of the sale of March 27, 1953 the right is alive to her. This is not correct approach to the question. To entitle the pre-emptor for an exercise of the right, he has to observe the formalities of demands as laid down by law. They have to be observed very diligently. Having observed those formalities duly and completely, the title to the exercise of the right becomes vested in. the pre-emptor. Thereafter, he can afford to take his own time, subject to the law of limitation to institute a suit in court to enforce the same. The period of limitation prescribed in the Limitation Act is only for the institution, of the suit, and not for the observance of the pre-requisites of an exercise of the right. As the 1st defendant failed to make the demands for a period of four months after she had notice of sale of the property to the plaintiff, she had lost her light of pre-emption.

39. There is still one other disqualification for the 1st defendant to claim the right of preemption in this case. As observed by Sir D. F, Mulla (See paragraph 26 supra), if a plaintiff entitled to pre-emption joins with himself as co-plaintiff a person who has no right thereto, the suit has to be dismissed. Very probably, this is to assure that the right of pre-emption is not passed to strangers through the process of a, suit.

'If a plaintiff who has a right of pre-emption associates with himself persons who have no such right, he becomes disentitled from claiming preemption.'

Dwarka Singh v. Sheo Sankar Singh, AIR 1927 All 168.

'It is well settled that if a person entitled to claim pre-emption joins with himself as co-plaintiff a person who has no right, he forfeits his own preemptive right and the suit must be dismissed as against both.'

Toldi Narain Puri v. Ram Rachhya Singh, AIR 1925 Pat 743.

Hence, even if the 1st defendant had a right of pre-emption 'in respect of the sale to plaintiff since she had associate herself in her assertion of, a preferential right with defendants 3 and 4, who had nothing to do with the property at the time of the concerned sale, she has forfeited her right and is not entitled to a decree in her favour .

Thus, on all the conditions for enforcibilty of a right of pre-emption, the defendants have failed miserably. They are therefore not entitled to any pre-emption in this suit.

40. In the result, the second appeals are allowed; and O. S. No. 38 of 1954 is dismissed and O. S. No. 285 of 1953 allowed, with costs of O. S. No. 38 of 1954 throughout. As the questions raised in both the suits are identical, costs throughout in O. S. No. 285 of 1953 are directed to be borne by the respective parties.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //