Atma Ram and Another vs Babu Ram and Another

V.D. Misra, C.J.—This second appeal is directed against the judgment and decree of District Judge Kangra Division at Dharamsala, allowing the appeal and setting aside the decree ofthe trial Court.

One Dhani Ram owned and possessed agricultural land. He had three sons and three daughters. The sons are Babu Ram, Milkhi Ram and Hari Chand, whereas the daughters are Jamna Devi, Hukmi Devi and Brahmi Devi. Hukmi Devi and Brahmi Devi died during the life time of their father. Hukmi Devi left behind a daughter named Ishwari Devi, whereas Brahmi Devi left behind two daughters named Bishni and Bakshi. After the death of Dhani Ram, the agricultural land came to be mutated in the names of all the three sons as well as Jamna Devi and the daughters of the deceased Hukmi Devi and Brahmi Devi.

Now Dhani Ram had left behind a will leaving all the property to his sons and excluding the daughters. Milkhi Ram bought the shares of Ishwari Devi and Bishni Devi. On 22nd December, 1965, a suit was filed by Babu Ram and Hari Chand against Milkhi Ram and others challenging the mutation as well as the sale to Milkhi Ram. The Plaintiffs propounded a will dated 11th March, 1957, alleged to have been left behind by their deceased father. The suit was resisted.

On 8th August, 1966, a Kliangi Panchqyatnama (Ex. D.W. 2/1) was executed by the three brothers agreeing to divide the property amicably among them. On 20th August, 1966, an application for compromise was made by the parties in the suit. It was stated that they had settled the dispute and had "got the registry done" and, therefore, they did not want to carry on with the suit. On 29th August, 1966, after recording the statements of the parties, the suit was dismissed in terms of the settlement.

Now one of the terms of the family settlement Ex. D.W. 2/1 was that the land bought by Milkhi Ram from Ishwari Devi and Bishni Devi would be equally divided among the three brothers and necessary deeds executed and registered. After the suit was dismissed, Milkhi Ram duly executed the sale deed in favour of his two brothers Babu Ram and Hari Chand in respect of the land he had bought from Ishwari Devi and Bishni Devi vide sale deed Ex. D-3. It is specifically mentioned in the deed that he was conveying two-third share of that land. The sale consideration was shown as Rs. 1500/- out of which a sum of Rs. 1000/- was stated to have been received at home.

Atma Ram and Madan Gopal, sons of Milkhi Ram, filed a suit against Babu Ram and Hari Chand for pre-emption of the land sold by their father Milkhi Ram to his brothers vide sale deed Ex. D-3. The suit was resisted. It was pleaded that the sale deed in question was, in fact, a family settlement between the brothers and, therefore, it was not a sale which was preemptible. The trial Court held that the transaction in dispute was a sale and, therefore, pre-emptible. On appeal the District Judge came to the conclusion that there was no sale and so set aside the decree of the trial Court and dismissed the suit.

Mr. O.P. Sharma, learned Counsel for the Appellants, contends that Ex. D.W. 2/1 is not a family settlement. It is submitted that in family settlement every member of the family has a title to the property and it is for that reason that when a settlement takes place there is no conveyance of title.

The only question which falls for decision in this appeal is whether Ex. D.W. 2/1 is a family settlement. We need not repeat the circumstances already noticed. However, it may be borne in mind that a dispute had arisen amongst the brothers. The Respondents brothers had set up a will left by their deceased father excluding the daughters from inheriting the agricultural land. One of the brothers (Milkhi Ram) had bought the share of his deceased sisters. Mutations in favour of the sisters were challenged. The suit had been instituted. In other words, the exclusive title of the three brothers to the whole agricultural land left by their father was claimed. It was open to Milkhi Ram to challenge the will. It appears that he did not want to challenge it. The brothers decided to settle all their disputes. A Khangi Panchayat intervened and settled the matter to the satisfaction of all the brothers.

The settlement in a nut-shell was that all the land left by their father should go to the three brothers. The difficulty evidently was that Milkhi Ram had already bought the shares of Ishwari and Bishni daughters of the deceased sisters. Moreover, a part of the land had been mutated in the name of Jamna Devi. It is apparent from Ex. D.W. 2/1 that Milkhi Ram undertook to get a conveyance from Jamna Devi. The two brothers, that is, Hari Chand and Babu Ram, agreed to advance Rs. 1000/- each to Milkhi Ram enabling him to buy the land from Jamna Devi in the name of all the three brothers with all of them having equal shares. As regards the land which Milkhi Ram had already bought, it was decided that he would convey the two-third share to Babu Ram and Hari Chand and thus keeping himself only one-third share. Evidently Milkhi Ram had paid for the land which he had bought. While sharing that land he was entitled to get the payment. It appears that the brothers wanted to buy the shares of the sisters so that they could jointly keep the land. And this was done. Ex. D-3 was one of the necessary consequences of the family settlement. Otherwise there was no necessity for Milkhi Ram to convey the two-third share to bis brothers Babu Ram and Hari Chand. We have no doubt in our mind that this was not a sale in the ordinary sense of the term.

The question what is a family settlement came up for decision before the Supreme Court in Ram Charan Das Vs. Girjanandini Devi and Others, The Court, after reviewing various decisions including those of the Privy Council, observed:

"Courts give effect to a family settlement upon the broad and general ground that its object is to settle existing or future disputes regarding property amongst members of a family. The word ''family'' in the context is not to be understood in a narrow sense of being a group of persons who are recognised in law as having a right of succession or having a claim to a share in the property in dispute.... The consideration for such a settlement, if one may put it that way, is the expectation that such a settlement will result in establishing or ensuring amity and good will amongst persons bearing relationship with one another. That consideration having passed by eacli of the disputants the settlement consisting of recognition of the right asserted by each other cannot be permitted to be impeached thereafter.... It is not necessary, as would appear from the decision in Rangasami Gounden v. Nachiappa Gounden 46 Inch. App. 72: AIR 1918 P.C. 196, that every party taking benefit under a family settlement must necessarily be shown to have, under tire law, a claim to a share in the property. All that is necessary is that tlie parties must be related to one another in some way and have a possible claim to the property or a claim or even a semblance of a claim on some other ground as, say, affection.

In Sahu Madho Das and Others Vs. Mukand Ram and Another, , the Supreme Court, while defining the scope of a family arrangement and its ingredients, observed:

"It is welt settled that a compromise or family arrangement is based on the assumption that there is an antecedent title of some sort in the parties and the agreement acknowledges and defines what that title is, each party relinquishing all claims to property other than that falling to his share and recognising the right ofthe others, as they had previously asserted it, to the portions allotted to them respectively.... But, in our opinion, the principle can be carried further and so strongly do the Courts lean in favour of family arrangements that bring about harmony in a family and do justice to its various members and avoid, in anticipation, future disputes which might ruin them all, that we have no hesitation in taking the next step (fraud a part) and upholding an arrangement under which one set of members abandons all claims to all title and interest in all the properties in dispute and acknowledges that the sole and absolute title to all the properties resides in only one of their number (provided he or she had claimed the whole and made such an assertion of title) and are content to take such properties as are assigned to their shares as gifts pure and simple from him or her, or as a conveyance for consideration when consideration is present.

In Maturi Pullaiah and Another Vs. Maturi Narasimham and Others, Subba Rao, J., speaking for the Court, after quoting with approval the afore-mentioned observations, concluded thus:

"Briefly stated, though conflict of legal claims in present or in future is generally a condition for the validity of a family arrangement, it is not necessarily so. Even bona fide disputes, present or possible, which may not involve legal claims will suffice members of a joint Hindu family may, to maintain peace or to bring about harmony in the family, enter into such a family arrangement. If such an arrangement is entered into bonafide and the terms thereof are fair in the circumstances of a particular case, Courts will more readily give assent to such an arrangement than to avoid it.

In the instant case, as already observed, all the ingredients of a family settlement are present. The brothers had settled the dispute. The land was to belong to all of them in equal shares. There would have been no necessity to execute any sale deed if Milkhi Ram had not already bought a part ofthe land from the daughters ofthe deceased sisters. The title in this land was exclusively his because of the sale deed executed in his favour. This land could be equally shared only by Milkhi Ram conveying title to two-third share to his brothers by a sale deed Ex. D-3. Simply because there was a consideration for this sale, it will not take it out of a family settlement.

The law has always looked at with disfavour on the right of pre-emption since it limits the right of a person to sell his property. Therefore, the provisions of the Pre-emption Act have to be strictly considered. It is only when a case squarely falls under this law that pre-emption is to be allowed. In other words, the law docs not lean in favour of pre-emption.

A Division Bench of the Punjab High Court in Rati Ram and Ors. v. Mam Chand and Ors. AIR 1959 Pun 117, observed:

"It is well established that right of pre-emption is a piratical right and it imposes a restriction on the right of the owner to transfer his property to whomsoever he likes. This right operates as a clog on the right of the owner to alienate his property to a person of his own choice; it has therefore to be strictly construed. The Plaintiff in a pre-emption suit, who is an aggressor, must in my opinion, prove affirmatively that the transaction which he wants to pre-empt is a sale and that he has a preferential right over the vendees; in case there exists a doubt about the transaction in question being a sale the Plaintiff must fail....if the transaction in dispute is capable of two interpretations the Courts should, in my opinion, be disinclined to hold it to be a sale so as to force the owner of the property to transfer it to a person who is not of his choice.

In Gulwant Singh and Anr. v. Satish Kumar 1969 P.L.R. 402, a question about the consideration for the sale which was sought to be pre-empted had arisen. It was observed that in addition to the money paid by the vendees, the vendees had also agreed to the settlement ofthe disputed title which could not be measured in terms of money paid and it was not possible for the pre-emptor to pay full consideration for the aforesaid sale.

In the instant case we cannot lose sight of the facts under which the sale deed was executed. It was not an open sale. Seller was not offering the property for sale to anyone he liked and at a price which he would have liked to get. On the other hand, under the settlement he was forced to sell a share in the land to his own brothers for a sum which had been settled by the Panchayat. It may be noticed that the vender Milkhi Ram, who is the father of the Plaintiffs-Appellants, dared not come in the witness box to depose about the circumstances under which he had executed the sale in question. On the other hand, Defendants-Respondents examined the scribe of Ex. D.W. 2/l. He is a relation of the parties inasmuch as he is tie son-in-law of the sister-in-law of Hari Chand. The agreement after execution had been left in the custody of this witness in trust. The sale deeds in question Ex. D-2 and Ex. D-3 were also executed in his presence. Hari Chand came in the witness box and deposed about the circumstances in which Ex.D.W. 2/1 as well as the sale deeds came to be executed. He specifically stated that the "amounts were paid by us in terms of the decision of the Panchayat as representing the expenses actually incurred by Milkhi Ram". He was not cross examined at all. The only sentence which appears in cross examination is: "The Plaintiffs are the sons of Milkhi Ram, my brother." In these circumstances, there is no escape from the conclusion that what Hari Chand and Jagat Ram deposed was correct. On the opposite side only Atma Ram Plaintiff examined himself. Since he did not know about the circumstances underwhich the settlement in question was arrived at and the sale in question took place, he deposed nothing about it. In cross examination he denied knowledge about his father being sued by his brothers and the suit being compromised. He showed complete ignorance even of the fact that his father had sold two-third of the property purchased by him from Ishwari and Bishani. He went on to depose: �I cannot say whether the land in suit jwas transferred by my father in pursuance of the alleged compromise arrived at by him by his brothers.� In other words, Atma Ram�s statement was nothing but a tissue of lies.

The appeal is, therefore, dismissed with costs.