1. This second appeal arises out of a suit by a mortgagee to recover an amount of Rs. 60 due on the mortgage Ex A dated 19th December 1921 executed by defendants 1 to 5 in favour of the plaintiff. Defendant 6 was impleaded as a subsequent purchaser of the suit hypotheca under Ex. 2 dated 27th November 1924. In his written statement defendant 6 does not merely rely on he subsequent sale deed but upon an earlier transaction. He says in his written statement that the whole site on which the suit house and other houses are suit was part of the survey No. 13 belonging to him. Then he says:
In the said Re-survey No. 13 this defendant has built a big bandy stand (vandipettai) and provided it with all conviences for stay of bandies going to and fro on the highway. The said pettai and the shops, houses vacant space etc., round it absolutely belong to this defendant. For the shake of safety and protection to the said pettai, this defendant gave permission to people to build houses there and reside and in the houses built by the defendant 6 all conveinces for tenants have been provided. The people there have no right either to sell, mortgage etc., either the building or the vacant space.
2. He also says that he has been paying a tax of Rs. 25 per year to the Government. In support of his right he has pleaded in the written statement. Whatever right it may be called he relies. Upon Exs. C and I Ex. C is the sale deed he gave to defendant 1 for Rs. 60. He says he gave similar deed to others. And Ex C is accomplished simultaneously by Ex. 1 which is a registered agreement executed by defendant 1 to 6. Undoubtely the two ought to be taken together to see the nature of the transaction. Ex 1 says:
As I have taken a sale deed from you of the site and house mentioned below, I will be residing in the said site and house. While I so neither, I nor my heirs should not like to reside in the said site and house, we shall reconvey the property to you for a price not exceeding the sale price of Rs. 60.
3. The first question arises is what is the effect of agreement like Ex. 1? The courts below have thought that the agreement is therefore void. But I am not satisfied with that mode of disposing of the case Mr. Narayanswamy Ayyar, the learned advocate for the appellant, sell the property to defendant 6 at a favourable price of Rs. 60, the consideration for this agreement being that the house was sold to defendant 1 at the favourable price of Rs. 60. I am willing to accept these suggestions. Probably the house is worth much more than Rs. 60 and because it was given to defendant 1 for Rs. 60 he gives a counter-agreement to resell it, for Rs. 60. But there are difficulties in enforcing this agreement. It is not an agreement absolutely binding on defendant 1 to sell it in a particular time or within any time at all. He is bound to sell it to defendant 6 whenever be thinks of parting with the property.
4. If he does not think of parting with the property, he is not bound to sell it. That is the first difficulty in the case. The second difficulty is that he is bound to resell it for Rs. 60. At one stage Mr. Narayanaswami Ayyar said that the right was analogous to the right of preemption. But on that footing he was met by the decision in Vasudevan Moosad v. Ittirarichan Nair 41Mad.582. Sir John Wallis says there citing the judgment of Mahmood, J., in Baij Nath v. Sital Singh 18 All.224, that 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 preemption enforcible whether it is a customary right or a right arising out of private contract. In this case it is necessary for defendant 6 to show that his right of sale is such that the mortgage in favour of the plaintiff is invalid as against his own right. A mortgage by the owner of a house will often end in a suit by the mortgagee and in Court sale. And if the Court sale can be made free of defendant 6's right to repurchase under Ex. 1, the right is useless. So he has to contend that not only absolute alienation but also mortgages by defendant 1 are void if they are to affect his right of repurchasing it for Rs 60.
5. Now, the decision in Vasudevan Moosad v. Ittirariahan Nair 41Mad.582, is against this view if it is to be described as a right of pre-emption, So Mr. Narayanaswami Ayyar contended that it is somewhat similar to pre-emption but is not actual pre-emption. I am willing to accept this suggestion. What shall we describe this right as? In my opinion if it is not a right of pre-emption, the undertaking which defendant 1 made in Ex. 1 is merely an undertaking to give defendant 6 the first offer for Rs. 60 whenever he chose to sell it. This undertaking is not without consideration and therefore cannot be disposed of as nudum pactum. It had consideration and it is a complete contract, the contract being the undertaking to make the offer. In the language of the Judges who decided Helby v. Mathews, it is a pre-contract to a contract to sell and purchase. It seems to me that such a contract does not amount to an offer, it is only an undertaking to make an offer whenever he thinks of selling the property; he has yet made no offer and therefore it is incapable of acceptance. Mr. Narayanaswami Ayyar has cited before me a decision in Govindaswami Pillai v. Doraiswami Mudali : AIR1926Mad120 . In that case Krishnan, J. following the decision in Papa Naidu v. Muniswamy Ayyar, held that there was only an offer, that the other side to the contract was not bound and that until the offer was accepted there could be no complete contract to sell and purchase. There, also the contract begins with the words;
If it so happens that I have to sell it (property) out of necessity, I will sell it to you.
6. In my opinion the undertaking in that case did not amount to a continued offer kept open but only an undertaking to make an offer when he thinks of selling the property as in the present case, and I think there is neither an offer nor can there be an acceptance in that case. However the learned Judge thought that there was an offer and he gave an opportunity for the respondents by calling for a fresh finding whether there was an acceptance of the offer. But the finding was that there was no completed contract with the result that the appeal was allowed. But it seems to me that in such a case there is no offer, nor can there be an acceptance of the offer. If no offer is made by the person who makes the undertaking no doubt he is guilty of breach of his undertaking. It is possible that he is liable to be sued for damages. But I do not see how a person to whom option is given I say option because it is no more than an option to repurchase the property can sue for specific performance. He can only sue for damages. This is also the view in Papa Naidu v. Muniswamy Ayyar A.I.R.1922 Mad.16 the only difference being that in that case there is a continuing offer left open. In the present case there is no offer at all. Defendant 6 may be able to sue defendant 1 for damages for breach of his undertaking in Ex. 1. I do not want to say that Ex. 1 is void as the lower Courts have said. It cannot amount to a transaction which has the effect of restraining alienations by way of mortgage or sale.
7. Mr. Narayanaswami Ayyar relied on Sheobaran Singh v. Kulsum-un-nissa , in which it was held that the Official Assignee takes the property of a bankrupt exactly as it stood in his person with all its advantages and all its burdens That may be so, so far as the Official Assignee is concerned. But it is conceded in that case that a sale in execution of a decree transferred the property free from a claim of pre-emption : see p. 375 (of 49 All.) It is clear that whatever may be the nature of the Official Assignee's powers, involuntary sales cannot be made invalidated by a right of pre-emption. It seems to me that the mortgage in this case cannot be invalid by reason of Ex. 1. The second appeal fails and is dismissed with costs.