Prabartak Jute Mills Ltd. vs Pashupati Chatterjee

Mallick, J.—The question involved in this appeal is whether, in an application for pre-emption u/s 24 of the West Bengal Non-Agricultural Tenancy Act, 1940, an order for pre-emption can be made if the entire deposit contemplated in the section is not made along with the filing of the application in a case where notice u/s 23 has not been served.

Opposite party Sital Chandra Bose and the applicant Pasupati Chatterjee were owners of the lands referred to in the petition-Pasupati having 10 annas share and Sital 6 annas share. Sital entered into an agreement for sale of his share of the said land with the opposite party Debendra Nath Chaudhuri. The said Debendra Nath Chaudhuri was the benamdar of the opposite party, Prabartak Jute Mills Ltd. Sital having failed to complete the sale by executing the conveyance in favour of the purchaser, the Company instituted a suit for specific performance against Sital. In that suit a decree was passed and Sital was ordered to execute a conveyance in favour of the Company on receipt of the total consideration of Rs. 5,106. Against the said decree an appeal was taken to this Court by Sital. This appeal was allowed to be dismissed in consideration of a further sum of Rs. 6,000 being paid by the Company to Sital for value of Sital''s share of structure standing on the land and for an assignment of all arrears of rent due by the tenants. In consequence, in the conveyance executed by Sital in favour of the Company, the consideration appears to be the sum of Rs. 5,106 plus the said sum of Rs. 6,000 making a total sum of Rs. 11,106. The Company appears not to have served a notice on the applicant Pasupati in terms of Section 23 of the West Bengal Non-Agricultural Tenancy Act. According to the Petitioner Pasupati, he came to know for the first time of the sale on receipt of a notice from one Nityananda Basack, the lawyer of the Company. Thereupon, he presented a petition for pre-emption out of which this appeal arises.

In the petition the Petitioner states that he is a co-sharer and is entitled to pre-empt the undivided 3/8th share of the land belonging to the opposite party Sital conveyed to the Company. He pleads that no notice as contemplated by Section 23 of the Act had been served. He craves leave to deposit the sum of Rs. 5,106 which is the consideration or value of the said undivided 3/8th share. Apparently this amount is taken from the agreement of sale referred to above and the decree of the trial court. The said amount of Rs. 5,106 appears to have been deposited by the Petitioner. It is clear from the petition that the Petitioner raises a dispute as to the quantum of consideration paid for the said sale. The Petitioner takes his stand on the fact that the consideration is the amount of Rs. 5,106 for which a decree was passed by the trial court and that the further sum of Rs. 6,000 paid for the purpose of the appeal being dismissed which has also been included in the consideration as stated in the conveyance is not the proper consideration.

An objection was filed on behalf of the Company against the said application on various grounds. On June 8, 1951, the Fifth Subordinate Judge of 24-Parganas over-ruled the Petitioner''s contention as to the amount of consideration payable and held that Rs. 11,106 was payable by the pre-emptor. The learned Subordinate Judge further ordered that the Petitioner be called upon to deposit a further sum of Rs. 6,000 plus 5 per cent, thereon as compensation within a fortnight and on compliance thereof the application for pre-emption will be allowed on contest and in default thereof the application will stand dismissed. On June 20, 1951, the Petitioner made a further deposit in compliance to the order, dated June 8. 1951, and an order was recorded by the learned Subordinate Judge in the following terms: "That in view of the judgment, dated "June 8, 1951, let the Miscellaneous Case be allowed in terms "of my order, dated June 8, 1951".

The present appeal is by the Company against the order passed by the learned Subordinate Judge on June 8, 1951, allowing pre-emption. The only point urged before us by Mr. Atul Chandra Gupta, who appeared in support of this appeal, is that the deposit for the full amount of consideration not having been made along with the petition the application should have been dismissed u/s 24(2) of the West Bengal Non-Agricultural Act, 1949. The facts as stated before are not disputed but it is contended that, in law, the order was illegal and should be set aside. The decision of this question depends on the construction of Sections 23 and 24 of the said Act. This is a case of first impression and no decision on this point has been referred to us. Assistance, however can be got from the decision of this Court on the analogous provisions of Section 26F of the Bengal Tenancy Act, It appears that provisions of Sections 23 and 24 of the Non-Agricultural Tenancy Act have been taken from and are in pari materia with Section 26F of the Bengal Tenancy Act. There is no provision however in the Bengal Tenancy Act corresponding to Section 24(6) of the West Bengal Non-Agricultural Tenancy Act. The said Sub-section (6) provides that in case, the amount of consideration is disputed, the Court before making an order for pre-emption shall determine the amount of consideration actually paid for the transfer and "the amount so "determined shall be deemed to be the consideration money "referred to in Sub-section (2) and where the amount of consideration "money has been so determined the deposit made under "that Sub-section shall for the purpose of Sub-section (5) be the amount ''''so determined". Sub-section (2) provides that "the application "under Sub-section (1) shall be dismissed unless the applicant at the "time of making it deposits in Court, the amount of consideration "money or the value of property... as stated in the "notice served on the applicant u/s 23 with compensation "at the rate of 5 per cent, of such amount". Sub-section (5) provides that "if deposit required under Sub-section (2) is made the "Court shall make an order allowing the application".

It is to be noticed that the right to apply is provided for under Sub-section (1) and the only condition imposed is that the application shall be made within four months of the service of notice issued u/s 23. Sub-section (1) does not require the deposit to be made as a condition precedent to the making of the application. It is equally clear that unless the deposit is made no order for pre-emption can be made and in a case where notice u/s 23 has been served such deposit must be made at the time of making the application, otherwise the application is thrown out in limini. In a case, where notice u/s 23 has been served only difficulty in construction is to determine the meaning of "making the application". Does it mean that deposit is to be made at the time of filing the application? Or does it mean that deposit may be made after filing up to the point of actually moving the Court for an order for pre-emption? It appears from some of the decided authorities on Section 26F of the Bengal Tenancy Act that "the "making of the application" was considered to be the same as "filing the petition". In some reported cases, however, the Court allowed the application for pre-emption even though deposit was made not at the time of filing the petition, but subsequently. In the case of Jotis Chandra Biswas and Another Vs. Jadu Nath Sikdar and Others, , decided by a Division Bench of this Court, it was held that the time of making in Sub-section (2) of Section 26F of the Bengal Tenancy Act should be given a liberal construction and the expression "making" does not mean filing but refers to sometime when the application was brought to the notice of the presiding Judge, who has power to dismiss and not to the point of time, when it is presented to the officer.

In the case of a co-sharer landlord to become a co-applicant for pre-emption reported in Sachindra Nath Chakravartty v. Troilakya Nath Chakravartty (1936) 40 C.W.N. 1023, R.C., Mitter, J. observed:

The whole scheme in the matter of deposits whether the application is u/s 26F(1) or 26F(4) seems to be that the deposit to be made by applicants or the co-applicants for pre-emption must be made within the time limit imposed by statute for making such applications.

In the opinion of the learned Judge, the most important thing is that the petition be made within the time laid down in the statute, because that is the only condition imposed by the Sub-section. Deposit is essential but not so the time of making the deposit. The application need not be necessarily dismissed, if deposit is not made at the time of filing the petition but subsequently. R.C. Mitter, J. noticed the two contrary decisions of this Court-one being Girish Chandra Ghose v. Jadavpur Estate Ltd. 1934) 39 C.W.N. 232, where it is held that if deposit is not made along with the application but subsequently the Court is bound to dismiss the application, and the other being Sidheswari Prosad Roy Chowdhury v. Gendu Mea (1930) 61 C.L.J. 27, where it is held that such an application is maintainable and is not liable to be dismissed, and opined that if it was necessary for him to decide the point, he would have been inclined to the view taken in Sidheswari Prosad Roy Chowdhury v. Gendu Mea (Supra), rather than the view taken in Girish Chandra Ghose v. Jadavpur Estate Ltd. (Supra). In the subsequent case of Nural Hossain Mallik and Another Vs. Mihilal Sheikh and Others, , decided by a Division Bench of this Court, the view taken in Girish Chandra. Ghose v. Jadavpur Estate Ltd. (Supra), has been affirmed rejecting the other view taken in Sidheswari Prosad Roy Chowdhury v. Gendu Mea (Supra) and Sachindra Nath Chakravartty v. Troilakya Nath Chakravartty (supra). The point to be noticed is that even in cases where notice is served, there is a substantial body of judicial opinion in favour of the view that though deposit is essential, the time stated in the section is not as essential as to compel the Court to dismiss the application, if such deposit is not made at the time of filing the petition. It seems to me that this view can well be sustained by treating the date of deposit to be the date when the petition is presented and/or the application is made and make an order for pre-emption provided such deposit is made within the time prescribed.

There was no provision in the Bengal Tenancy Act for determination of the quantum of consideration in case the quantum of consideration paid was disputed by the pre-emptor. Such a provision, however, is to be found in Section 24(6) of this Act. In that view of the matter, it would seem that by adding Sub-clause (6) in this Act, the Legislature intended to give to the per-emptor the same facility and advantage as was given to the co-sharer, who was entitled to come in and join as pre-emptor in a latter stage and in whose case, R.C. Mitter. J. held that the Court had power to extend the period or making deposit. Sub-section (6) makes it clear that Court is not competent either to allow or refuse pre-emption before adjudication on the amount of consideration payable by the pre-emptor. There is, therefore two stages in the pre-emption proceedings-first the determination of the amount of consideration payable and after such determination the Court is empowered to grant or refuse pre-emption. This tends to show that in a case where consideration money is disputed "making the application" does not mean the date of the presentation of the petition but subsequently when the Court is called upon to make an order either granting or refusing pre-emption after the amount of consideration money payable by the pre-emptor has been adjudicated.

Mr. Gupta argued that the language of the section suggests that even in the case of disputed consideration, the entire amount must be deposited at the time of filing the petition otherwise the Court is bound to dismiss the petition on the language, it is no doubt a possible construction but in my judgment that is not the only construction possible. Other construction as indicated above is also possible and in my judgment, the other construction is more reasonable and should be preferred. What sense there is in compelling a per-emptor to deposit the full amount on pain of dismissal, even though the Court may subsequently adjudicate the amount to be substantially less? It may involve considerable hardship to a co-sharer for whose benefit this section has been enacted and in some cases it may even prevent a co-sharer to pre-empt the ostensible consideration as opposed to real consideration having been put at a figure too high for the pre-emptor. Again, if the application is dismissed on the ground that the deposit though made before the application is moved in Court but not at the time of filing the petition, the pre-emptor may file a petition, the very next moment and the deposit having been already made, the Court is bound to grant pre-emption. I fail to see therefore, why the time for making the application should not be taken to mean the time of actual moving the application in Court and not the time of filing the petition.

In the present case, no notice u/s 23 has been served. Hence Section 24(2) does not in terms apply. In such a case is the Court bound to dismiss the application, if deposit is not made along with the petition but subsequently Mr. Gupta argued that the right of pre-emption has been granted by the section and the same section lays down the conditions. According to him, the conditions are (1) it must be made within 4 months of the service of notice and (2) deposit of the entire consideration must be made at the time of the petition, even if the amount of consideration is disputed. I am unable to agree that the two conditions as above stated are the conditions for pre-emption imposed by the statute. The view taken by R.C. Mitter, J. in the case reported in Sachindra Nath Chakravartty v. Troilakya Nath Chakravartty (supra), on the analogous section is that the only condition is as set out in Sub-section (1), viz., that it must be made within 4 months of the service of the notice. In the case of Asmatali Sharip v. Majaharali Sardar (1947) 52 C.W.N. 64 (S.B.), decided by a Special Bench of this Court it has been held that the provision in Sub-section (1) of Section 26 B.T. Act to the effect that the application must be made within 4 months of the notice is not a condition at all. B.K. Mukherjee, J., who delivered the judgment of the Special Bench at p. 67, observed as follows: The provision relating to time is in our opinion a separate and independent provision which is not an essential condition of the exercise of the right, but merely imposes a limit of time with regard to application filed by co-sharers served with the notice of the transfer. The right accrues as soon as the transfer is made. It follows from the above observation that in the case of notified co-sharer, the application if not made within 4 months of the notice should be dismissed not because it is a condition of pre-emption but because there is a provision in the section itself that the application must be made within 4 months of the notice. In the case of non-notified co-sharer, there is no such provision in the section itself and hence application can be made after 4 months but at any time within the period prescribed by the general law, i.e.. Indian Limitation Act. If the time of making the application as provided in Sub-section (1) is not an essential condition of pre-emption, I do not see, how the provision as to the time of making the deposit in Sub-section (2) can be considered to be an essential condition of the exercise of the right. In the case of notified co-sharer, the application for pre-emption made without the deposit having been made in time must be dismissed not because the time of making the deposit as laid down in Sub-section (2) is an essential condition but because there is an express provision in the statute itself that it must be dismissed. In the case of non-notified co-sharer there is no such provision in the statute. Hence in my judgment, the Court is under no obligation to dismiss such an application, if the deposit has been made not at the time of making the application but subsequently. It is clear, however that the pre-emptor is not entitled to pre-emption before deposit is made. In the case of non-notified co-sharer, therefore, an order for pre-emption can be made even if the pre-emptor is late in making the deposit provided the deposit is made before the order is asked for and given. More so in a case where the pre-emptor disputes the amount of consideration payable. In reason and in justice, I do not see why such a pre-emptor in the absence of an express statutory provision, should be compelled to deposit the disputed consideration at the time of filing the petition on pain of forfeiting his right of pre-emption. To put the pre-emptor within the mischief of Sub-section (2), we have to delete the following words from the Sub-section, viz., "as stated "in the notice served on the applicant u/s 23". Neither the canons of construction nor the consideration of justice compels me to delete the said words, so as to expand the scope of the penal provision of Sub-section (2).

Mr. Gupta referred us to a passage from the judgment of B.K. Mukherjee, J. in Asmatali''s case (supra) noticed before beginning from last paragraph of p. 67 of the report and in particular to the following observation:

The applicant even though might not get any notice u/s 26C must be acquainted with the contents of the deed of transfer before he files the application and it would be sufficient compliance with the the requirement of Sub-section (2) if the amount stated in the conveyance is deposited. In our opinion the language of Sub-section (2) of Section 26F is not such as to compel the inference that the Legislature did not intend to make the remedy by way of application available to a co-sharer who was not served with a notice u/s 26C.

Reliance has been placed on the above observation in support of the contention that even in the case of non-notified co-sharer, requirement as to deposit has to be complied with in terms of Sub-section (2) and the application is liable to be dismissed, if no such deposit is made. It is not proper to infer that because the learned Judge indicated that deposit can be made in the case of non-notified co-sharer, the Penal provision of Sub-section (2) is attracted even in the case of non-notified co-sharer and the Court is bound to dismiss the application, if the deposit is not made in time. The learned Judge does not purport to consider in the said case, what would be the consequence of non-deposit in the case of non-notified co-sharer. All that he said was that, it is possible to comply with the requirement of deposit as contemplated by Sub-section (2), not of the amount as stated in the notice but the amount of consideration to be ascertained from the deed of transfer. The observation was made or an entirely different context and it was far from the mind of the learned Judge to suggest the proposition that even in the case of non-notified co-sharer, the application was liable to be dismissed in terms of Sub-section (2), if no deposit is made at the time of making the application. The reasoning on which the learned Judge decided the question of limitation runs counter to such suggestion. It is further to be noted that the observation was made with reference to Section 26F, B.T. Act where there was no provision corresponding to Section 24(6) of the Act, we are considering. In my view, the passage referred to is no authority for the proposition that the penal provision of Sub-section (2) would apply in the case of non-notified co-sharer as well and in a case of disputed consideration where no notice has been served the application is liable to be dismissed, if deposit is not made at the time indicated in Sub-section (2).

According to Mr. Gupta, even in the case of non-notified co-sharer, we are to give full effect to Sub-section (2) and dismiss the application and such dismissal therefore becomes mandatory even in the case of non-notified co-sharer, who has not made the deposit. The statute compels dismissal of applications only in cases of notified co-sharer, where deposit is not made of the amount stated in the notice. The construction suggested compels the dismissal of other applications as well by a simple method of deleting a clause from the section which is clearly penal. In my judgment such a construction is not permissible in law. It is necessary to emphasise that the right of preemption given by the section is mandatory and not merely discretionary. The Court has no option but to grant preemption. That is the clear intention underlying the section and the duty of the Court is to give full effect to this intention consistent to the rights of the purchaser. The right of the purchaser is to get the consideration money and compensation. That is the substantial right which the Courts are intended to recognise and respect. In the cases of notified co-sharer, the deposit must be made at the time of making the application otherwise the statute directs the dismissal of the application. In the case of non-notified co-sharer, there is no such direction in the statute, hence the Court is not empowered to dismiss the application. It must make the order for pre-emption but not before the deposit is made of the amount of consideration plus compensation as provided in the statute. In a case, where the amount of consideration is disputed, the Court is under an obligation in the first instance to adjudicate on the question of consideration being the amount payable by the pre-emptor and after the determination of the said question, the Court is entitled to give a reasonable time to the pre-emptor to deposit the amount so determined before making a final order as to whether pre-emption should be granted or not. In my judgment, no other construction is permissible in law. To accept the construction suggested by Mr. Gupta, the dominant intention of the Legislature as expressed in the section would be defeated. If the method suggested by Mr. Gupta was proper and permissible, nothing would have simpler for the Bench deciding Asmatali''s case (supra), to ignore the words in Section 24(1) "of the service of notice u/s 23", after "within 4 "months" and hold that the application must be made within 4 months of the date of transfer or the knowledge of transfer. Their Lordships rejected this construction and decided that in the ease of non-notified co-sharer, no time has been specified in the section for making the application.

We may look at the question from another point of view. The purchaser has violated the mandatory provisions as to notice to the co-sharer as provided in Section 23 of the Act. Had notice been served the co-sharer would have been bound to deposit the amount of consideration with compensation and in default of such deposit the purchaser seeking pre-emption would have been entitled to the benefit of penal provision of Sub-section (2) and get a dismissal of the application for pre-emtion. Having himself committed a breach of Section 23, in not serving notice on the co-sharer, he has disentitled himself to get the benefit of the penal provision of Section 24, Sub-section (2). In justice and equity, he has to thank himself for this and the Court in my judgment should not come to his assistance and expand the scope of Sub-section (2), so as to enable him to get the benefit of the penal provisions of the said Sub-section. For the reasons given above, I hold that in the case of non-notified co-sharer, the order for pre-emption should be made even though the amount of consideration as provided in the Act has not beep made at the time of application provided it is made before the order is passed. In this case, the order for pre-emption was made after the amount has been deposited in full and therefore the order of pre-emption made in this case is according to law. In the result, the appeal fails and is dismissed. In the circumstances of this case, we make no order as to costs.

S.R. Das Gupta, J.

I agree.