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Ram Baran Prosad and anr. Vs. Ram Mohit Hazra and anr. - Court Judgment

LegalCrystal Citation
CourtKolkata High Court
Decided On
Case NumberA.F.O.D. No. 104 of 1954
Reported inAIR1961Cal152,64CWN416
ActsContract Act, 1872 - Sections 37 and 40; ;Specific Relief Act - Section 27; ;Transfer of Property Act - Section 40
AppellantRam Baran Prosad and anr.
RespondentRam Mohit Hazra and anr.
Appellant AdvocateA.C. Gupta and ;Amar Nath Ray Choudhury, Advs.
Respondent AdvocateSyama Charan Mitter, Adv.
DispositionAppeal dismissed
Cases ReferredAli Hossain v. Rajkumar Haldar
- .....refusal to pre-empt the same in spite of tulshi's first offer to him in terms of the above pre-emption clause. then, on april 22, 1942, kishori, by the kobala ext. i, sold his two blocks b and d to certain persons whom, for convenience, we shall call the mukherjees, and, on june 21, 1946, the latter, in their turn, sold the said properties to the present plaintiffs, who are the respondents before us, and who may, for the sake of brevity and convenience, be described as the hazias. this latter sale was effected by the kobala ext. 1(a). then, on 20th september, 1952, nagendra sold his block a to defendant no. 1 (vide kobala ext. a-1), and, on 2nd december, 1952, the present suit was filed by the plaintiff against the said purchaser, defendant no. 1, for pre-empting his aforesaid.....

P.N. Mookerjee, J.

1. The only point which arises for consideration in this appeal relates to the construction of what may be roughly called a pre-emption clause in a partition award and the determination of its scope and of its effect on the rights of the contending parties. The relevant facts are no longer in dispute and they may be shortly stated as follows:

2. Two brothers, Tulshidas Chatterjee and Kishori Lal Chatterjee, owned certain properties (land and building) on Paharpur Road, mouza Garden Reach, Kidderpore, in the suburbs of Calcutta. In or about the year 1938, Kishori sued for partition of the said properties and, eventually, the matter was referred to arbitration. On 16th December, 1940, the arbitrators filed their award, on which a decree was passed on March 15, 1941. Under the award, which formed part of the aforesaid decree, two of the four blocks A, B, G, D into which the disputed properties were divided by the arbitrators, were allotted to Kishori and the remaining two to Tulshi, Kishori's blocks being B and D and Tulshi's A and C. Two common passages X. and Y and a common drain Z were kept joint or ejmali between the parties for their use. In the award there was a term or clause to the following effect:

'We further find and report with the consent of and approval of the parties that any party in case of disposing or transferring any portion of his share, shall offer preference to the other party, that is, each party shall have the right of pre-emption between each other.'

and it is the construction of this term of clause which is the immediate subject-matter of the present appeal.

3. The dispute between the parties arose under the following circumstances :

4. On August 20, 1941, Tulshi sold his A block to one Nagendra Nath Ghosh (vide Ext. A). This was done after Kishori's refusal to pre-empt the same in spite of Tulshi's first offer to him in terms of the above pre-emption clause. Then, on April 22, 1942, Kishori, by the kobala Ext. I, Sold his two blocks B and D to certain persons whom, for convenience, we shall call the Mukherjees, and, on June 21, 1946, the latter, in their turn, sold the said properties to the present plaintiffs, who are the respondents before us, and who may, for the sake of brevity and convenience, be described as the Hazias. This latter sale was effected by the kobala Ext. 1(a). Then, on 20th September, 1952, Nagendra sold his block A to defendant No. 1 (vide kobala Ext. A-1), and, on 2nd December, 1952, the present suit was filed by the plaintiff against the said purchaser, defendant No. 1, for pre-empting his aforesaid purchase. On 7th April, 1953, while the suit was pending in the trial court, defendant No. 1 sold the disputed property (Block A) to defendant No 2 and the latter also resisted the plaintiffs' claim, along with his vendor defendant No. 1. Their defence, however, failed before the learned Subordinate Judge and, feeling aggrieved, they filed) the present appeal.

5. It appears from the pleadings before us and the evidence in the case that, when the Mukherjees purchased from Kishori, there was a prior offer to Tulshi and Nagendra, but they declined to exercise their right of pre-emption under the aforesaid term or clause of the partition award. The further evidence, however, on the plaintiffs' side that a similar offer was made to the said persons when the Mukherjees sold to the plaintiffs is not very much acceptable, having regard to the nature of the said evidence, and the absence of any such statement in the plaint. That, however, is not very material for our present purpose, and we would rely primarily on the construction of the aforesaid clause and its-scope and effect in the light of the relevant provisions of law for determination of the rights of the parties in regard to the matter in dispute, remembering - and that is very material - that the defendants-appellants do not now and cannot claim to be transferees without notice of the above preemption clause.

6. The clause in question has been fully set out above. It is, roughly speaking, as stated hereinbefore, a 'pre-emption clause' in favour of either party to the above award and the only question is whether its benefit and obligation should be restricted to the said parties only, that is, to them personally, or would extend to their heirs, and/or legal representatives, including assignees. Prima facie, the clause which, incidentally speaking, really embodies a contract between the parties to the partition award, having regard to the language of the clause itself, to which is superadded the authority of the arbitrators and of the Court, may and-should be viewed from the point of view of a contract and it contains no expression in itself suggesting either a restricted or an extended meaning. Two of the current statutes, however, namely, the Contract Act and the Specific Relief Act, appear to be of some assistance in the matter of its construction and to give us a workable clue in aid of its interpretation. The two Sections 23(b) and 27(b) of the Specific Relief Act and Sections 37 and 40 of the Indian Contract Act lay down, in substance, that, subject to certain exceptions, which are not material here, a contract, in the absence of a contrary intention, express or implied, will be enforceable by and against the parties and/or their heirs and legal representatives including assignees or transferees. Our task, therefore, is considerably lightened and we have only to ascertain from the contract before-us, - and the instant pre-emption clause in the partition award is, as we have said above, really in the nature of a contract, having regard to the express mention of the parties' consent to the same, -- and the surrounding circumstances, whether any such intention can be gathered either from the clause in Question or from the award, of which it forms a part, Or from the surrounding circumstances, or from the nature of the particular right, namely, the contractual right in the nature of a right of pre-emption. The clause, as we have said above, contains nothing on the point nor does the award. Nor, do we think, the surrounding circumstances or the nature of the particular right, dealt with under the clause in question, would justify any inference of such intention (vide in this connection Vaman Trimbak v. Changi Damodar, ILR 49 Bom. 862: (AIR 1926 Bom 97) and Vishweshwar Narsabhatta Gad-dada v. D. I. Bhatkar, AIR 1940 Bom. 339). In contracts, except where they depend on personal factors of the contracting parties or the like, assignability is the rule and the contrary is the exception. The contrary intention, therefore, has to be clearly established either from express words or from necessary implication. Applying this test, we would hold that the so-called right of pre-emption in the present case is enforceable by and against the original parties and/or their legal representatives including assignees, that is, as between the present parties too. The nature of the right, again, in the facts of this case and having regard to the character and situation of the properties involved, would rather support the above view. We may point out further that, if the appellants' contention is to be accepted and the benefit and obligation of the contract in question has or have to be restricted only to the parties to the award, that is, to the said parties personally, that would be giving it an unreasonable interpretation as, at least, the heirs of the original parties must have been intended to be entitled to its benefit and subject to its obligation. The contract, therefore, has to be given an extended meaning at least with regard to the said heirs of the original parties and there is no reason why, in such circumstances, its benefit and obligation should not extend to assignees as well, particularly when the contract is not such that the transference of its obligation to assignees would prejudice the corresponding beneficiary. If it was the intention of the parties to restrict the benefit and obligation of the clause in question to the parties personally or to their heirs only, special language would and should have been employed as in the case cited by Mr. Gupta, namely, Vithoba Madhab v. Madhav Damodar, ILR 42 Bom. 344 : (AIR 1918 Born 158). Assignees, however, who are bona fide assignees for value without notice would not be bound by the obligation and that is too well-known to require repetition.

7. In support of the appeal, Mr. Gupta relied very strongly upon the above decision of the Bombay High Court in ILR 42 Bom. 344 : (AIR 1918 Bom 158), supra, but, as stated by us in the preceding paragraph and as pointed out by the learned Judges of the same High Court in ILR 49 Bom. 862 : (AIR 1926 Bom 97), supra, and AIR 1940 Bom. 339, supra, the wording of the disputed clause in the earlier Bombay case (ILR 42 Bom. 344 : (AIR 1918 Bom 158)) was sufficiently clear to exclude the assignability of the particular contract. The other Bombay case of Harkisandas Bhagwandas v. Bai Dhanoo, AIR 1934 Bom. 171, decided by a learned single Judge (Shingru, J.), did, in essence, follow the said earlier case, reported in ILR 42 Bom. 344 : (AIR 1918 Bom 158), which was substantially similar to it and stands on no different footing. The two cases before the Privy Council also (Sital Pershad v. Lachmi Pershad Singh, 10 Ind App 129 and jhanda Singh v. Wahid-ud-Din, 43 Ind App 284 : (AIR 1916 PC 49), which were noticed and considered in ILR 49 Bom. 862 ; (AIR 1926 Bom 97)), but where this particular question did not strictly arise, dealt with documents which, as pointed out in the said Bombay case, contained, in themselves, sufficient indication that the benefits of the contracts there were not to be available to assignees or transferees. Similar also was the position in Uthandi Mudali v. Raghavachari, ILR 29 Mad. 307. None of these cases therefore, does, in truth, militate against the view of law, which we have expressed above, and, in consonance with that view and proceeding upon the same, we would hold that, in the present case, the benefit and obligation under the pre-emption clause in question would pass on to the representatives of the original parties on either side, including assignees or transferees, subject to the well-known exception, noted hereinbefore, that bona fide transferees for value without notice would not be affected by the obligation. The exception however, is not material here as the appellants do not and cannot claim to be such transferees.

8. We have dealt with the main and, indeed, the only argument, practically speaking, which was advanced by Mr. Gupta in support of this appeal and, according to us, in the view, expressed above, that argument cannot be accepted. We may also observe, in passing, that the preemption clause in question suffers from no infirmity either on account of any uncertainty in its terms or as being contrary to or offending any law, for example, the rule of perpetuity. It is enough for the above purpose to refer to the three cases of the Allahabad High Court, reported in Basdeo Rai v. Jhagru Rai, ILR 46 All 333: (AIR 1924 All 400), Muhammad Jan v. Fazal-ud-Din, ILR 48 All. 514: (AIR 1924 All 657); Aulad Ali v. Ali Athar : AIR1927All170 ; and the Full Bench case of this Court, Ali Hossain v. Rajkumar Haldar : AIR1943Cal417 . The clause is also perfectly valid and legal and clearly enforceable under, inter alia, Section 27(b) of the Specific Relief Act and Section 40 of the Transfer of Property Act and no objection can be taken against it on the ground that it contravenes any law of the land and is, accordingly, invalid.

9. It is to be remembered further that the relevant clause before us which, as we have said above, is in the nature of a pre-emption clause, is essentially contractual. Contractual pre-emption right is not necessarily personal. There is nothing inherent in it to compel such a conclusion. The matter depends on the construction of the particular contract and, although in a particular case, the contract, in the circumstances thereof, may well be personal, that is certainly not the general or the universal rule (vide, for example, the different cases, cited above). In the instant case, we have construed the clause in question as not embodying a merely personal contract but as extending to the parties and/or their heirs and/or legal representatives, including assignees, -- subject, of course, for the exception, noted hereinbefore though not material here, -- in the light of the relevant law and the circumstances of this case and, last but not the least, in the light also of the character and situation of the properties involved and that construction which seems to us to be the best and must reasonable, as far as this case is concerned, is not contrary to any principle of law and does not, properly speaking, do any violence either to the language of the particular clause or to any sense of equity. We, have, accordingly, accepted and adopted the said construction.

10. We do not think that any useful purpose would be served by prolonging this discussion and, in the light of what we have said above, we would dismiss this appeal, directing the parties, however, to bear their own costs in this Court and also in the court below in the peculiar circumstances of this case.

U.C. Law, J.

11. I agree.

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