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Chinna Kunji, Kadukayil Vilakathu Veedu and ors. Vs. Kesavan Kochukrishnan and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKerala High Court
Decided On
Case NumberSecond Appeal No. 755 of 1961
Judge
Reported inAIR1966Ker260
AppellantChinna Kunji, Kadukayil Vilakathu Veedu and ors.
RespondentKesavan Kochukrishnan and ors.
Appellant Advocate P. Subramaniam Potti,; K. Sudhakaran and; S.A. Nagendra
Respondent Advocate T.K. Narayana Pillai (N) and; D. Narayanan Potti, Advs.
DispositionAppeal allowed
Cases ReferredNuri Mian v. Ambica Singh
Excerpt:
.....against the vendee and there was no infirmity in the title of the owner restricting his right of sale in a certain manner a 'bona fide' purchaser without notice would certainly obtain an absolute title to the property, unhampered by any right of the pre-emptor and in such circumstances there could be no justification for enforcing the right of pre-emption against the purchaser on grounds of justice, equity and good conscience on which grounds alone the right could be enforced at the present day. hence a pre-emptor's attendance at the auction and failure to offer an amount equal to the highest bid and subsequent silence for nearly a year does not amount to waiver. 9. true it is that the right of pre-emption is a weak right and may be defeated by any lawful means. i would say.....m. madhavan nair, j. 1. this second appeal is in a suit to enforce pre-emption. 2. the suit property is a part of a non-residential building that belonged to the tarwad of plaintiffs 1 and 2 and defendants 1 and 3 before it was partitioned under ext. p-1 dated october 15, 1949. there is a covenant in the partition deed that if any sharer of the building, who took under the partition, were to sell his share at any time, it must be offered to the other parties to that deed for a fair price and only after they have refused in writing to purchase can it be assigned to a stranger the 4th defendant instituted a suit o. s. no, 1447, of 1950 on november 25, 1950 on certain promissory-notes executed by defendants 4 and 2, got a decree on january 22, 1952, charged on the suit property, and,.....
Judgment:

M. Madhavan Nair, J.

1. This second appeal is in a suit to enforce pre-emption.

2. The suit property is a part of a non-residential building that belonged to the tarwad of plaintiffs 1 and 2 and defendants 1 and 3 before it was partitioned under Ext. P-1 dated October 15, 1949. There is a covenant in the partition deed that if any sharer of the building, who took under the partition, were to sell his share at any time, it must be offered to the other parties to that deed for a fair price and only after they have refused in writing to purchase can it be assigned to a stranger

The 4th defendant instituted a suit O. S. No, 1447, of 1950 on November 25, 1950 on certain promissory-notes executed by defendants 4 and 2, got a decree on January 22, 1952, charged on the suit property, and, executing the same, purchased it on October 14, 1954, for Rs. 775 As. 2. That sale has been confirmed on July 14, 1955. The 4th defendant has assigned his title to the 5th defendant.

This suit has been instituted on November 7, 1955, to enforce the covenant for pre-emption in Ext. P-1. The Courts below found the covenant to be valid in law but unavailable against a court-auction purchaser and therefore dismissed the suit. The 1st plaintiff and the legal representatives of the 2nd plaintiff have come up in second appeal.

3. The legal validity of the covenant for pre-emption made in the aforesaid partition deed is not disputed before me. The contentions are firstly that it is not available against the 4th defendant who purchased at an involuntary sale or his assignee, and secondly that the right has been lost to the plaintiff by their waiver of the right and acquiescence in the court-sale.

4. As regards availability of the right of pre-emption against involuntary sales, there is no precedent in this Court and the precedents in other High Courts are not uniform. In Cheria Krishnan v. Vishnu ILR 5 Mad. 198 and Vasudevan v. Keshavan, ILR 7 Mad 309 at p. 314 the right has been held available against purchasers in court sales and in Baij Nath v. Sital Singh, ILR 13 All. 224 the contrary. Counsel for defence relied on Ghulam Mohi-ud-din Khan v. Hardeo Sahai, ILR 42 All. 402: (AIR 1920 All. 219 (2)) also as an authority; but that decision has been reversed by the Privy Council in Sheobaran Singh v. Mt. Kulsum-un-nissa, 54 Ind App, 204: (AIR 1927 PC 113). (The corresponding AIR report in AIR 1927 PC 113 may not show that the decision reversed therein is that in ILR 42 All. 402: (AIR 1920 All. 219 (2)); but the Indian Appeals report is clear in that regard).

5. In Audh Behari Singh v. Gajadhar Jaipuria AIR 1954 SC 417 the Supreme Court has observed:

'The crux of the whole thing is that the benefit as well as the burden of the right of preemption run with the land and can be enforced by or against the owner of the land for the time being although the right of the pre-emptor does not amount to an interest in the land itself. It may be stated here that if the right of preemption had been only a personal right enforceable against the vendee and there was no infirmity in the title of the owner restricting his right of sale in a certain manner a 'bona fide' purchaser without notice would certainly obtain an absolute title to the property, unhampered by any right of the pre-emptor and in such circumstances there could be no justification for enforcing the right of pre-emption against the purchaser on grounds of justice, equity and good conscience on which grounds alone the right could be enforced at the present day. In our opinion the law of pre-emption creates a right which attaches to the property and on that footing only it can be enforced against the purchaser.'

If a covenant for pre-emption runs with the land I see no reason why court-sales or other involuntary sales, where there is no warranty of title, should be excluded from its ambit. All that a purchaser at a court-sale would get is the right, title and interest of the judgment-debtor subject to all legal embargo thereon. If bona fide purchase in a private sale with warranty of title cannot avail against a claim for pre-emption, it is difficult to conceive how a purchase in a court-sale where there is no warranty of title can avail against it. I would therefore prefer the dicta in the Madras decisions cited above to that in (1891) ILR 13 All. 224 even though the latter is by a Full Bench of very eminent Judges.

6. The question then is whether the right has been lost to the plaintiffs on account of any waiver or acquiescence on their part. It is pointed out that the plaintiff' sister, Chinnappachi was actively resisting execution in O. S. No. 1447 of 1950 and that she had instituted O. S. No. 886 of 1953 to have the decree and execution proceedings in the aforesaid suit set aside but got worsted in all such attempts. Admittedly they were all before the court-sale that gave rise to this suit. The proceedings moved by Chinnappachi -- even if they bind the plaintiffs---cannot affect their right to enforce pre-emption which arose only when the court-sale has taken place, and not before. In AIR 1954 SC 417 their Lordships observed:

'It is true that the right (of pre-emption) becomes enforceable only when there is a sale. We agree with Mr. Justice Mahmood that the sale is a condition precedent to its enforcibility.'

Again in Radhakrishan Laxminarayan v. Shridhar Ram Chandra AIR 1960 SC 1368 it is held:

'Under Section 54 of the Transfer of Property Act a contract for sale does not of itself create any interest in or charge on immovable property and consequently the contract in the instant case created no interest in favour of the vendee and the proprietary title did not validly pass from the vendors to the vendee and until that was completed no right to enforce pre-emption arose.'

In Ram Sarup v. Munshi, AIR 1963 SC 553 the Supreme Court held 'pre-emption is the substitution of the pre-emptor in place of the vendee'. That cannot be claimed before a vendee has arrived, that is to say, before a sale has taken place. The sale concerned in this case took place on October 14, 1954 only; and all the proceedings taken by the plaintiffs' sister were before that. They cannot have any bearing on the plaintiffs' right to claim pre-emption against the purchaser.

7. Nor can a knowledge of the impending court-sale and indifference to bid at the court-sale be bar against the enforcement of preemption after the sale ILR 5 Mad. 198 was a case from Malabar where an otti-mortgagee was entitled to pre-emption in purchase of the equity of redemption. The plaintiff was an auction purchaser of the mortgagor's (jenmi's) rights who sued to redeem an otti-mortgage. The mortgagee claimed pre-emption. The plaintiff contended that 'as public notice of the intended sale of the jenmi's interest was given, and as the defendant might have come in and bid, no further option of pre-emption is necessary, and that as defendant neglected to buy, he must submit to be redeemed. It was held that the pre-emptor 'should not be driven to give any fancy auction price at an auction. He is entitled to the advantage which his position gives him, to be fully informed what price he is to pay before he makes up his mind to buy.'

In Alam Sher Khan v. Allah Din, AIR 1939 Lah. 517 the pre-emptor was actually present at the time or the auction sale but did not participate in the auction. That indifference on his part was put forth as acquiescence or waiver on his part barring subsequent enforcement of pre-emption. A Division Bench of the Punjab High Court held,

'Attendance at an auction-sale does not debar a pre-emptor from later pre-empting the sale. A pre-emptor is not bound to bid at an auction-sale and if he does not bid, he does not lose his right of pre-emption, the principle being that he is entitled to pre-empt the property at the price fixed and paid, and is not bound to make that price higher by competitive bidding. Hence a pre-emptor's attendance at the auction and failure to offer an amount equal to the highest bid and subsequent silence for nearly a year does not amount to waiver.' (head-notes)

8. Counsel fur defendant relied largely on Pateshwari Partab Narain Singh v. Sitaram AIR 1929 PC 259 to contend that an act of the pre-emptor before a sale takes place may amount to a waiver or abandonment of his right to preempt. That certainly can be. The right of the pre-emptor is primarily 'a right to the offer of the thing to be sold' before it is sold to any other person. (AIR 1958 SC 838). If that offer has been made to him and he refused to accept it there is an end of his right and nothing remains of the right in him to be enforced later. The plaintiff in the 1929 PC case had a right of pre-emption in respect of an estate which was subsequently divided into several blocks. Offer was made to the plaintiff to purchase those blocks at prices fixed and notify. He chose to purchase only two of them which adjoined his estate and expressly refused to purchase the others. Subsequently, when those other blocks had been purchased by stranger he sought to enforce his right of pre-emption against the purchasers. It was held by the Judicial Committee that he had waived his right by his former refusal to purchase the other blocks and that therefore he was not entitled to recover. The plaintiff by his purchase of two blocks out of the pre-emptive estate has recognised a partition of the estate into different blocks -- such partition affects the right to pre-empt the whole estate as one unit, vide: AIR 1932 PC 57 -- and by purchasing two of such blocks adjoining his estate and refusing to purchase the others he has himself put an end to his right. There is nothing parallel thereto in the facts of this case and as such, I am afraid, the dicta in AIR 1929 PC 259 is of no assistance here.

9. True it is that the right of pre-emption is a weak right and may be defeated by any lawful means. I would say that any right, however strong, can be defeated by lawful means. The weakness in the right of pre-emption really lies in the fact that while other rights which are favoured by law can be enforced in a suit unaffected by events subsequent to the institution of the suit, the right of pre-emption is allowed to be defeated by transactions pendente life. (See Hans Nath v. Ragho Prasad Singh, AIR 1932 PC 57, Nuri Mian v. Ambica Singh, ILR 44 Cal. 47: (AIR 1917 Cal. 716) and many other cases have held that to entitle a plaintiff to a decree in pre-emption his right must have subsisted on the date of the pre-emptive sale and at the date of the institution of the suit and also on the date of the decree, and that if on any of the three dates the right has been superseded or lost, the plaintiff will not be entitled to decree. No event before the lower court's decree -- as a matter of fact, till this date -- has been pointed out to supersede or bar the plaintiffs' right of pre-emption. I would therefore hold that no case of waiver or acquiescence is made out in this case.

10. In the result, the second appeal succeeds and, in reversal of the decree or the courts below, the legal representatives of the 5th defendant are directed to execute a conveyance of the property to the plaintiffs for Rs. 775.13 P. the price at which the property was sold in execution of O.S. No. 1447 of 1950. The other reliefs claimed in the plaint are dismissed. The appellants are entitled to their costs from the contesting respondents.

11. Counsel for the respondents requests leave for an appeal under Section 5 of the High Court Act. Leave is given.


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