Adaita Nath Halder vs Kalipada Halder

Chatterjee, J.—This is a second appeal against a judgment and decree passed by the Subordinate Judge at Alipore in his appellate jurisdiction. The Plaintiff is the Appellant. The Plaintiff instituted the suit for specific performance of a contract of reconveyance in respect of the suit lands. The factual position is as follows:

The Plaintiff sold the property to the Defendant No. 1 and on the same date came to a simultaneous agreement for reconveyance of the suit property by the Defendant No. 1 on the terms embodied in Ext. 3. On such sale by the Plaintiff to the Defendant No. 1, the Defendant No. 2 applied for pre-emption and the application of preemption was allowed. It is further found that the Defendant No. 2 had no actual notice of the agreement of reconveyance at the date when he filed the application for pre-emption, nor had the Defendant No. 2 any constructive notice of the agreement for reconveyance at the date when he filed the application for pre-emption. The question is whether the Defendant No. 2 is bound to reconvey even though there was no contract for reconveyance between the Plaintiff and the Defendant No. 2 or, in other words, whether the Defendant No. 2 is a person who claims under the Defendant No. 1 by a title arising subsequently to the contract and further whether the Defendant No. 2 is a transferee for value who has paid his money in good faith and who has paid his money without notice of the original contract. It is needless to point out that we are referring to Section 27 of the Specific Relief Act. According to Mr. Bose who appears on behalf of the Plaintiff, the Defendant No. 2 is a person claiming under the Defendant No. 1 by a title arising subsequent to the contract and further the Defendant No. 2 is not a transferee for value who paid his money in good faith and who had no notice of the original contract when he paid the money. According to Mr. Bose, under Sub-section (7) of Section 26F of the Bengal Tenancy Act the Defendant No. 2 got the same title as the Defendant No. 1 had, because Sub-section (7) provides as follows:

(7) From the date of the making of the order under Sub-section (5).

(i) the right, title and interest in the holding... shall... be deemed to have vested in the... co-sharer....

Hence, Mr. Bose urges that the pre-emptor is a person who claims under the purchaser and has the same title as he would have by the purchase. Therefore, the provisions of Sub-clause (b) of Section 27 of the Specific Relief Act would apply. Mr. Bose further urges that under the provisions of Sub-section (5) to Section 26F the money is to be paid on the order of pre-emption being made and it is clear that the pre-emptor had notice of the reconveyance at the date when the order for pre-emption was made. Therefore, he cannot be said to be a transferee for value who has paid his money without notice of the original contract. Mr. Bose, therefore, urges that the appeal must be allowed.

Mr. Mukherjee, on the other hand, urges that the Defendant No. 2, the pre-emptor, is not a person claiming under the Defendant No. 1 by a title arising subsequent to the contract. The Defendant No. 2 gets his right of pre-emption not because of any agreement but notwithstanding the absence of such a contract, and only by the statute concerned, (namely, Section 26F of the Bengal Tenancy Act), he was entitled to pre-empt. Therefore, the basis for pre-emption is not any title claiming under the Defendant No. 1, but the basis of his right is independent of the Defendant No. 1 or of the Plaintiff. The Defendant No. 2 merely exercised the right he was granted by the statute and the consequences as under the statute would naturally follow. Therefore, in no sense the Defendant No. 2 is a person claiming under the Defendant No. 1 by a title arising subsequent to the contract. Hence, Mr. Mukherjee says that the Plaintiff has no right to enforce the agreement for specific performance between the Plaintiff and the Defendant No. 1 against the Defendant No. 2. Mr. Mukherjee further contends that as soon as the money was deposited on the date of the application the purchaser Defendant No. 1 was at liberty to withdraw the money and the provision for payment of money is only a mere consequence of an order for pre-emption. That again is not by act of parties but by operation of law. It is not necessary, however, for us in this appeal to go into the matter further because there is a decision of this Court, Sital Chandra Kolley and Another Vs. Heirs of Mihilal Kolley and Others, wherein it has been held that if at the date of the institution of the proceedings u/s 26F of the Bengal Tenancy Act the pre-emptor had notice, actual or constructive, of the agreement between the purchaser, the Defendant No. 1, and the Plaintiff, the vendor, for reconveyance by the Defendant No. 1 to the Plaintiff, the right of preemption would be defeated or, in other words, the contract for specific performance could be enforced. It is unnecessary for us in the circumstances of this case to go into the merits of the arguments of the learned Advocates for either side, nor it is necessary for us to go into the question whether Sital Chandra Kolley and Another Vs. Heirs of Mihilal Kolley and Others, was correctly decided by the Division Bench. We may observe that Section 27 of the Specific Relief Act was not at all considered, very probably, it was not urged, because both the parties thought that that section would have no application. Be that as it may, the implication of the decision is that Section 27(b) of the Specific Relief Act would apply provided the pre-emptor had no notice at the date of the application for pre-emption. In the aforesaid case in Sital Chandra Kolley and Another Vs. Heirs of Mihilal Kolley and Others, there was notice at the date when the application for pre-emption was filed. In the case that we are considering, the final Court of fact has come to the conclusion that the pre-emptor had no notice, actual or constructive, at the date of the application. Therefore, the principle underlying the decision in Sital Chandra Kolley and Another Vs. Heirs of Mihilal Kolley and Others, has no application to the facts of this case. Their Lordships considered the question of notice with reference to the date of the application and not with reference to the date of the order. We are also aware that there are other decisions of Division Bench of this Court which have been referred to by Niyogi, J, when his Lordship referred the matter to the Division Bench, those decisions may imply a different construction so far as the matter is concerned. Having heard the learned Advocates for both the sides, we do not think that the principle enunciated in the aforesaid case of Sital Chandra Kolley and Another Vs. Heirs of Mihilal Kolley and Others, should be extended further. Mr. Mukherjee has referred to Section 91 of the Indian Trusts Act and urges us to hold that Section 91 of the Indian Trusts Act affords no ground for giving effect to the arguments of Mr. Bose. We may say incidentally that the aforesaid decision in Sital Chandra Koley v. Mihilal Koley (Supra) is more or less based on the provision of Section 91 of the Indian Trusts Act. That section is as follows:

Where a person acquires property with notice that another person has entered into an existing contract affecting that property of which specific performance could be enforced, the former must hold the property for the benefit of the latter to the extent necessary to give effect to the contract.

Mr. Mukherjee urges that Section 91 applies if only Section 27 of the Specific Relief Act applies; but Section 27(b) of the Specific Relief Act cannot be attracted for the reasons aforesaid. With regard to the other sub-clauses of Section 27 there is no question of application. We do not think it is necessary for us to express any opinion on the matter. But we consider that the decision in Sital Chandra Koley v. Mihilal Koley (Supra) has not been challenged for the last 10 years and there has been numerous decisions of this Court on the basis of that judgment. Therefore we are not inclined to send the matter to the Full Bench disagreeing with the view which the Division Bench took in the aforesaid case ; but at the same time we are not willing to extend the principle further or, in other words, we hold that the relevant date for the notice is the date of the application, not the date of the order. The case has been referred to the Division Bench because it was considered that there was a difference of opinion between the decision of a Division Bench in Nishikanta Das Vs. Jnanendra Nath Mondal and Others, of Chakravartti, C.J. and Sinha, J. and the decision referred to in Sital Chandra Koley v. Mihilal Koley (Supra). We do not think that there is any conflict between the aforesaid two decisions. Chakravartti, C.J. found that after a right to pre-empt accrued, any contrivance by the purchaser would not defeat the right of pre-emption or, in other words, once the law of pre-emption applied, no device to evade it would be tolerated by the Court. P.N. Mookerjee, J. in deciding the aforesaid case in Sital Chandra Koley v. Mihilal Koley (Supra) did not differ from that principle. His Lordship found in substance that after a person came within the mischief of a statute, he would not be entitled to make a device to evade the effect of the statute; but before the statute came into operation he might take such steps as would not attract the operation of the statute. P.N. Mookerjee, J. held that if there was a simultaneous agreement, it could not be said that the agreement was subsequent to the operation of the Bengal Tenancy Act. Therefore, that agreement would not be considered to be a device to evade the effect of the statute but only an agreement which would not come within the mischief of the statute. We entirely agree with this distinction made by P.N. Mookerjee, J. presiding over the Division Bench.

But Mr. A.D. Mukherjee urges that Section 27, which must be the basis of a decree for specific performance, has no application and that section was not considered in the aforesaid decision of the Division Bench and he asks us to reconsider the decision and to refer the matter to a Full Bench. We have said already that, as the law has been understood in that manner for the last 10 years in this part of this country, we are not much inclined to refer the matter to the Full Bench, particularly because on the facts of the instant case there is no question of reference to the Full Bench as the principle enunciated in the case, viz., Sital Chandra Koley v. Mihilal Koley (Supra), has no application to the facts of the case before us. In the case before us there was no notice of the agreement for pre-emption at the date when the application for pre-emption was filed. Therefore, the principle referred to in Sital Chandra Koley v. Mihilal Koley (Supra), does not apply. Mr. Bose asks us to extend the principle and to say that the notice at the date of institution may be good but unnecessary, what is required is the notice at the date of the order. Having considered the circumstances and the aforesaid matters, we are not inclined to extend the principle any further. Notice or knowledge at the date of the order would be a matter of course and to hold that, would be to explain away the decision in Sital Chandra Koley v. Mihilal Koley (Supra).

The result is that the appeal is dismissed. We make no order as to costs.

The cross-objection is not pressed and is dismissed without costs.

Gupta, J.

I agree.