Bishan Singh vs Khazan Singh

Passey, J.—This and No. 130 of 1952 are two connected appeals arising out of the appellate decree of the Additional District Judge Faridkot in a suit for pre-emption which had been dismissed by the trial Court. The Plaintiffs have been held entitled to possession of 3/7th share in the land in dispute on payment Of Rs. 16,119/-/-. The salient facts may be shortly stated.

By a sale-deed executed on 26-8-1949 but registered on 15-2-1950 Ram Nath and four Ors. Defendants 3 to 7 sold 179 kanals 2 marlas of agricultural land in village Bandar Jatana for Rs. 37,611/-/- to Sarwan Singh and Saudagar Singh Defendants 1 and 2. Bishan Singh and three Ors. Defendants 8 to 11 claiming to be owners in the Patti in the estate within the limits of which the property sold was situate and, therefore, having a superior right than the vendees who were strangers brought a suit (No. 14) on 26-8-1950, to pre-empt that sale. A consent decree was passed in their favour on 23-1-1951 subject to the condition that they paid Rs. 37,611/-/- to the vendees by 27-4-1951 failing Which the suit would stand dismissed. The decree-holders deposited Rs. 1700/-/-on 6-1-1951 and the balance on 23-4-1951.

The Plaintiffs Khazan Singh and two Ors. , who were also owners of land in the same Patti filed the present suit (No. 13) on 15-2-1951, to enforce their right of pre-emption and they impleaded the vendors, the vendees and decree-holders. of suit No. 14 as Defendants. The sale price of Rp. 37,611/- was stated to have been fictitiously entered in the document of sale and that in fact Rs. 18,000/- only had been paid to the vendors. The suit was based on the original sale dated 15-2-1950 and it was stated in the plaint that the decree obtained by Defendants 8 to 11 on 23-1-1951 could have no adverse effect on their pre-emptive right. The Plaintiffs'' claim was resisted chiefly by the Defendants 8-11, who urged in their written statement that the Plaintiffs could have no right to preempt the property in respect of which they had. already obtained a decree for possession They meant to say that before the Plaintiffs could ask for a decree, it was imperative for them to establish a superior right than the one with which they (Defendants 8-11) were already clothed and that since both they and the Plaintiffs had equal qualification inasmuch as both had claimed the right of pre-emption on the basis of their being owners in the Patti in which the suit land was situate, the Plaintiffs'' suit was liable to be dismissed. The Defendants also maintained that Rs. 37611/-/- had been actually paid and the price had been fixed in good faith. The trial Court framed the following four issues:

Whether the suit is within time? O.P. on Plaintiff.

Whether the Plaintiffs'' right of pre-emption is superior to that of the vendees (Defendants 1 and 2 and 8 to 11)? O.P. on Plaintiffs.

Whether the consideration was fixed in good faith or actually paid? O.P. on Defendants.

What is the market-value of the property in V," dispute? O.P. on Plaintiffs.

Issue No. (1) was decided in favour of the Plaintiffs and No. 3 against them and as the decision of issue No. 2 also went against them their suit was dismissed. Since issue No. 3 had been decided in favour of the Defendants it was not thought necessary to go into issue No. 4.

appeal the learned Additional District Judge, decided issue No, 2 in favour of the plain-tiffs held them to be entitled to possession of 3/7th share in the property in question on payment of the proportionate price of Rs. 16,119/-/-. '' The Defendants 8-11 have now filed appeal No. 57 to get the- Plaintiffs'' suit dismissed. Their counsel, his also stressed that even if the . Plaintiff be found to be entitled to a proportionate share along with Defendants 8-11, that share should be deter-mined according to Clause (c) of Section 17, Pre-emption Act and not Clause (e) as had been done by the lower appellate Court. On the other hand, the Plaintiffs have in their cross-appeal (No. 130) prayed for a decree for half of the land in dispute, for their costs in both the Courts below, and for reduction of the sale price by Rs. 10,000/-.

Referring to Section 17, Patiala Pre-emption Act. Shri Dalip Chand contended that Defendants 8-11 could not in view of its provisions be classed as ''preemptors'' for they had already exercised. their . preemptive right and a decree in recognition of that right had been granted to them. The expression pre-emptor'', according to the learned Counsel, does not include a person who, in the exercise: of his pre-emptive right, has purchased the property out of Court or who has been by operation of the decree in his favour substituted in place of the original vendee. It was further argued, on behalf of the Appellants (Defendants 8-11) that Section 17 contemplates division of the subject of sale amongst preemptors whom the Court finds to have an equal right and it does not cover a person who by reason of the decree in his favour is not a pre-emptor on the date of the subsequent Preemptors'' suit. Continuing his arguments Shri Dalip Chand also urged that since the decree dated .23-1-1951 had substituted Defendants 8-11 in place of the original vendees, and the Plaintiffs had of right superior to that of the decree-holders, they were not preemptors with a preferential right.

There is no doubt that Defendants 8-11 had Shown superior diligence in filing their suit earlier than the Plaintiffs, but the pre-emption law does not grant any premium to greater diligence. No advantage or precedence is, therefore, gained by a preemptor by coming to Court first whiles limitation is yet available to his rivals. If several preemptors have an equal right and all of them bring their suits within time the mere fact that one of them came into Court earlier than the rest would not defeat or adversely affect the right. of those who institute their suits subsequently. The question, however, has to be considered in the light of the objection of Shri Dalip Chand that Defendants 8-11 had stolen a march over the Plaintiffs and had already obtained a decree for possession on 23-1-1951, i.e., about 21 days before the suit of the Plaintiffs and thus became successful preemptOrs.

The parties are agreed that Defendants 8-11 had deposited the sale-price after the institution of the Plaintiffs'' suit. By the date of the plain-tiffs'' suit, therefore, the Defendants 8-11 had neither obtained possession of the property nor had they complied with the essential conditions the decree, inasmuch as the bulk of the sale price, viz., Rs. 25,9il/-/- had yet to be paid in Court by them. They had not yet become vested with any right that could hot be defeated by a pre-emptor with a superior right or with which preemptors with equal right could not meddle.

I will now deal with the question whether the Defendants 8-11 could be called vendees or only preemptors who though in possession of a decree had not yet become owners of the property. In the case of agricultural land the right of pre-emption arises only in the case of sale or of foreclosure of the right to redeem that property. It is, therefore'' evidently a sale that can be pre-empted and not a decree of the Court The Plaintiffs had brought their suit on the basis of the sale dated 15-2-1930 and not of the decree granted to the Defendants 8-11. The decree was one for possession and did not require the original vendees to rectory the property to the successful Plaintiffs of that suit. The extent of the operation of the decree was to substitute Defendants 6-11 in place of the vendees (Defendants 3-7). By no stretch of word3 could the Defendants 8-11 by reason of the decrees be regarded to have re-purchased the land in question. There was no voluntary or involuntary conveyance in their favour by the vendor or the vendees. If ''substitution'' were tantamount to ''repurchase'' it would become subject to Anr. preemptive claim dating not from the original sale but from the day the decree was passed. Moreover, if it were a re-purchase, the Court would have required the original vendee to execute a sale-deed in favour of Defendants 8-11 in order to give them a valid title or in the case of his reluctance to do so, would have made an order itself amounting to appropriate conveyance. The right of pre-emption, therefore, does not appear to me to be equal to a right of re-purchase. It is no more than a right of substitution in place of the vendee which puts him in his shoes, but does not make him a transferee from him. A pre-emptor who succeeds in his suit stands distinctly different from a purchaser of the vendees'' right out of Court, in which case there is a regular sale and execution of a conveyance deed. As the de Cree did not make a fresh transfer in favour of Defendants 8-11 and only proposed to put them in the place of the original vendees provided the satisfied the condition of the payment of the sale price within the specified time, they had not become purchasers from the vendees. The decree of the Court does not make any sale of the property to the pre-emptor and therefore such pre-emptor cannot be heard to say that the rival pre emptor should prove a superior qualification for pre-emption than what he himself possesses. By becoming a conditional successful pre-emptor by the decree dated 23-1-1951 they (Defendants 8-11) had not, therefore, ceased to be preemptors. As they had moved the machinery of Law to enforce f their right, they were not equal to those who did not institute a suit but to whom the original vendees in recognition of their pre-emptive right had sold the property out of Court.

Shri Dalip Chand referred to - ''Mool Chand v. Ganga Jal'' AIR 1930 Lah 356 (PB) (A) and also to Lokha Singh and Others Vs. Surmukh Singh, ''Mool Chand v. Ganga Jal'', (A), was a case in which during the pendency of the pre-emption suit with respect to the sale of certain land the vendee had sold the land to Anr. who had a right of pre-emption equal to, that of the Plaintiff and that other person in his turn had sold it to yet Anr. who possessed a I similar right. Both the transfers had taken place? before the expiry of the period of limitation for?"

instituting a pre-emption suit with respect to the oedipal sale, and it was found that the sales h-ad been made in recognition of the pre-emptive rights of the subsequent vendees. It was held by the full Bench (a) that no doubt the rule of listeners applied to pre-emption suits but it dia not affect the validity of the sale effected by the vendee doing person possessing a right of pre-emption equal to that of the pre-emptor and (b) that the word pre-emptor in Section 17 could not be taken to include a person who had already purchased property through Court in the exorcise of his right of pre-emption and that it meant a person seed-ing to enforce his right of pre-emption through a Court The direct question before the Pull Bench was whether the word ''pre-emptor'' in Section 17 could be taken to include a person who had already purchased property out of Court in the exercise of his right of pre-emption and to this question the answer of the Full Bench was in the negative. In the present case Defendants 3-11 had not purchased the property out of Court and they had as mentioned above, not complied with the decree and obtained possession of the land when the Plaintiffs'' suit was instituted Obviously they were preemptors as they had exercised their right through Court. In Lokha Singh and Others Vs. Surmukh Singh, the successful pre-emptor had executed his decree and taken possession of the property.

The cases that bear similarity to the one under examination are:

(i) ''Raj Narain v. Dunia Pande'' 32 All 340 (C)

(ii) - Kundan Lal Vs. Amar Singh and Others, In - '' AIR 1927 All 661 (D), it was held that when two or more persons claiming pre-emption are equally entitled, the property shall be equally divided between them, each paying an equal share of the consideration for the transfer. it matters little who comes to Court first, provided that they all come within the period of limitation. In -- ''32 All 340 (C)'', it was held that where a pre-emptor having a superior right of pre emption brings his suit within limitation, the fact that decrees having been made in favour Of Pother preemptors, the Plaintiff not being u party to the suits in which such decrees were passed, will be no obstacle to the success of the suit. My conclusion, therefore, is that the Defendants 8-11 were on the date the Plaintiffs'' suit was instituted neither vendees nor those to whom S. 17, Pre-emption Act could not appy.

The decree of the lower appellate Court, therefore, does not call for any interference on that point. The contention of Shri Dalip Chand is that as the right of pre-emption of both the Plaintiffs and Defendants 8-11 was equal, they could exercise it in proportion among themselves to the shares which they would take if the land were common land in the estate or the Patti. There is no evidence permitting a clear conclusion as to whether Clause (c) or Clause (e) of Section 17 would apply in this case and that if Clause (c) applied what would be the Plaintiffs'' share in the land in question -The case, therefore, has to go back for determining their shares in accordance with Clause (c) if that clause applies and if it be found that Clause (c) has no applicability because the parties or one of them do not have any share in the common land, then the shares will have to be determined according to clause (e).

There was a distinct issue regarding the market-value of the property but neither side has led any evidence on it. The sale was for Rs. 37,611/-/- but the total of the items that were stated to make up Rs. 37611/-/- came only to Rs. 27,611/-/-. There is no evidence that Rs. 37,611/-were paid or fixed in good faith. The statement of Durga Dass, the only witness on the point, is too vague. It does not prove that the vendors had received Rs. 37,611/-. "According to Section 25, Preemption Act, where the parties are not agreed as to the price at which the Plaintiffs are to exercise their right of pre-emption, and the Defendant fails to prove that the price at which the sale purported to have taken place had been fixed in good faith or paid, the only alternative left with the Court is to fix the market-value of the land as the price for the purposes, of the suit. As the Defendants have proved neither payment of Rs. 37,611/-nor that the price was paid in good faith, the Court below should have found as to what the market-value of the land was.

Both the appeals, therefore, succeed in part The case is remanded to the Additional District Judge Faridkot, who will try and decide it again on the original side. He will now after allowing the Parties to lead evidence determine'' the share of the Plaintiffs in the suit property in the light of the provisions1 of Clause (c) or Clause (e) of Section 17, Pre-emption Act whichever may be applicable and also fix the proportionate amount payable by them out of the sale price to be fixed in accordance with the market-value of the land, as may be proved by the Defendants. In appeal No. 57 of 1952 the parties will bear their own costs and in appeal No. 130 of 1952 the Respondents shall pay the costs of the Appellants. Parties through their counsel have been directed to appear in the Court of the Additional District Judge Faridkot on 11-5-1953

Teja Singh, C.J.

I agree but wish to add a few words. It is well recognised that if the right of the Plaintiff-pre-emptor is . not superior to the right of the vendee, the preemptor''s suit must fail, because the right of pre-emption is a right to acquire immovable property in preference to other persons. The other important proposition of law well-recognised is that if the vendee sells the property to Anr. person in recognition of his superior right of pre-emption and within the time allowed for a suit for pre-emption, the Plaintiff''s suit must fail if he cannot prove that his right is superior to that of the subsequent vendee, even though the sale to the latter was made during the pendency of the pre-emption suit. in the present case there was no subsequent sale by the. vendee. All that happened was that Bishan Singh and three Ors. , who are Defendants 8 to 11 in Khazan Singh''s suit, brought a suit for pre-emption and obtained a decree on 23-1-1951. Khazan Singh and Ors. instituted their suit on 15-2-1951. In spite of the decree that by that time Bishan Singh and Ors. had obtained, they had not become the owners of the suit property for the reason that they had not yet deposited the whole amount which they had to do in accordance with the decree, nor can it be said that they stood substituted for the original vendees, because such a substitution could only take place after the terms of the decree were completely complied with.

Section 17 lays down that where several preemptors are found to be equally entitled to right of pre-emption their right shall be exercised in the manner mentioned in the Clauses (a) to (e) of the Section. The case of Khazan Singh and Ors. is that even though Bishan and Ors. had obtained a decree previous to their suit they were still preemptors within the meaning of Section 17 and since both the sets of pre-emptors were equally entitled to the right of pre-emption, inasmuch as they were all owners in the estate, Clause (c) applied and they should be given the suit land in proportion to their holding in the estate. The other side contested their claim on the ground that after having obtained a decree in their suit Bishan and Ors. could no longer be regarded as preemptors. In view of what I have said above my opinion is that notwithstanding the decree Bishan and Ors. were still preemptors. The perusal of the different sections of the Preemption Act would go to show that in an ordinary pre-emption suit we are con-cerned (i) with the pre-emptor, (ii) with the vendor and (iii) with the vendee. Where the vendee sells the property to some one else after the sale and the second vendee is either impleaded as a Defendant in the suit or comes forward of his own accord contest the Plaintiff''s right to pre-empt, the Court has to adjudicate upon his right vis-�-vis that of, the Plaintiff-pre-emptor. In a case where person brings a suit for pre-emption and obtains decree, he cannot be described as a I have already Case decided by a sing High Court it was held that clause t cases of rival preemptors where one set out of them was entitled to share in the shamlat of the petition while the other set was not so entitled. This decision was later on overruled by a Division Bench in Pateh Mohammad v. Fateh Mohammad AIR 1948 Lah 71 (E). This is what Mahajan J. who delivered the judgment of the Division Bench observed:

The learned Judge further thought that the clause could not be interpreted to mean that the shares of the respective preemptors should be in the proportion of their respective holdings. that in perpetration seems to be correct in view titled. In my judgment, Clause (c) of Section17 has application only to cases where two conditions are fulfilled i.e., (J) where both sets of preemptors are owners in a sub-division and (2) where both of them are entitled to take a share in the Shamlat in ascertain proportion. The clause, however, has no application where one set of preemptors is not entitled to share the shamilat in any proportion whatsoever with the other set In other words when the Shamlat is divisible in certain proportions between both sets of preemptors, then this clause can foe, aptly applied. But where one of the persons has a zero share or has no share at all and is, therefore, not entitled to share it in any proportion with his rival, in these circumstances, this clause ceases to have any application what so ever.

With all deference I concur with these observations. Since there is no evidence to show whether the two rival sets of preemptors have any share in the shamlat and if so, how much opportunity has to be given to them to lead evidence 011 the point. If they both have shares in the shamlat the suit property has to be divided in accordance with those shares. If, on the other hand, only one of them has a share in the shamlat and the other has no share or neither of them has any share, the property will have to be divided between them in accordance with Clause (e) of Section 17.