Pradyot Kumar Ghosh vs Pulin Behari Ghosh

Abani Mohan Siniia, J.—This appeal is directed against the judgment and decree passed in First Appeal by the learned Additional District Judge, Twelfth Court, in Title Appeal No. 845 of 1983, arising out of Title Suit No. 53 of 1982. The learned Court of Appeal reversed the finding and decree of dismissal of the trial Court and decreed the suit in favour of the Plaintiff and directed him to deposit Rs. 15,000 at a time in one instalment in the Court below within 30 days of the passing of the decree, as the price of the suit property which was sold to the contesting Defendant No. 1, a stranger. The learned appellate Court also allowed the Plaintiff to pre-empt the suit property. Being aggrieved by such judgment and decree the Defendant no, 1 has preferred this appeal.

Mr. Ashok Sengupta, the learned Advocate duly assisted by Sri A. Mukherjee and Mr. B.K. Ghosal representing the Defendant-Appellant, has urged before us that the learned appellate, Court failed to appreciate the facts of the case and the law applicable to such facts in their proper perspective and came to a wrong finding on the point of law. It has further been urged that the judgment of the appellate Court suffered from some incurable infirmities because of wrong appreciation of evidence which led the Court to apply the law wrongly. According to him, the judgment of the learned appellate Court cannot be sustained in law and in fact.

Mr. Sudhis Dasgupta, the learned Advocate duly assisted by Sri. Jayanta Kr. Dasgupta, representing the Respondents has on the other hand supported the judgment and contended that the learned appellate Court below arrived at a correct finding on the questtion of fact and correctly applied the law to such fact.

The short facts of the case may be stated below for coavenience. The suit property originally belonged to Nanda Kishore Ghosh, Krishna Kishore Ghosh and Jugal Kishore Ghosh, the three brothers in equal shares. They by a written aggreement dated March 20, 1935, amicably partitioned the property specially the dwelling house described in sch. A of the plaint for the convenience of user and possession keeping some land in ejmali or in joint possession for the benefit of all the co-sharers. One of the terms of the agreement was that is case of sale by any co-sharer of his share to a stranger, such co-sharer should offer to the other co-sharers, his property for sale and, if the co-sharers refuse or fail to purchase on the offer of the co-sharer who intends to sell, the property may be sold to a stranger. The value of the property, if agreed to be purchased by the co-sharers, should be determined by five gentlemen if any dispute would arise as to valuation. In other words the co-sharers were given right of pre-emption under the agreement. After the death of Nanda Kishore Ghosh the Plaintiff succeeded to the 1/3 share of his father as he is sole legal heir. On the death of Krishna kishore Ghosh, his four daughters, namely. Anita, Abala, Amala and Angurbala jointly inherited his 1/3 share. The 1/3 share of Jugal Kishore devolved upon his only son. Kartick Chandra, who died a bachelor and whose share was inherited by his sister Durgabala. It is alleged that the Defendant No. 2 Durgabala sold her 1/3 share in the suit properly to the Defendant No. 1, a stranger purchaser, by registered sale deed on December 29, 1981. It is contended that the Defendant No. 2 in terms of the agreement did not make any offer or give any notice to the plaintiff or any other co-sharers as to her intereation to sell the property in suit. It is stated that the Plaintiff, however, did not allow the Defendant No. 1 to posses the properly purchased by him from Durgabala. The Plaintiff came to know of the sale on June 1, 1982, when the Defendant No. l a stranger purchaser, demanded possession of the part of the suit property purchased by him. He obtained a certified copy of the sale-deed and came to know the actual slate of affairs. He further alleged that the Defendant No. 1, attempted to mutate his name in the Municipal record. He further undertakes to. deposit the consideration money for the purchase of the suit properly or such sum as would be determined by the Court. He prayed for decree of preemption and permanent injunction against the Defendant.

The Defendant No. 1 only entered appearance and contested the suit. The other Defendants did not file any written stalement or contested the suit. The Defendant No. 1 in his written statement contended that the property was amicably partitioned amongst the co-sharers long back, i.e. on March 20, 1935, in terms of agreement leaving some properties in joint possession for the sake of convenience of co-sharers. Thereafter, separate Municipal holding number was allotted to the co-sharers. According to him, the Plaintiff''s suit was therefore not maintainable. As he purchased the partitioned property the Plaintiff, it is contended, could not maintain his prayer for pre-emption. The Defendant No. 1 sold the suit propety to one Anita, a co-sharer during the pendency of the suit. He further contended that the subsequent purchaser being a co-sharer the present suit for pre-emption is not maintainable.

The learned trial Judge found that the Plaintiff did not deposit the consideration money in Court which is a condition precedence for the allowing of a prayer for pre-emption and that, as the Defendant No. 1 sold the properly to Anita who was admittedly a co-sharer in the line of Krishna Kishore, the suit for pre-emption was not maintainable. On this finding he dismissed the suit of the Plaintiff.

In appeal the learned Additional District Judge held that in terms of the agreement the Plaintiff is entitled to pre-empt the suit property which was sold to Defendant No. 1, a stranger purchaser. He further found that the right of pre-emption emanated from clause. 3 of the agreement and is binding on the Defendant No. 1, the purchaser, for value with notice in terms of Section 40 of the Transfer of Property Act, and he further found that the sale by Defendant No. 1 during pendency of the suit is favour of Anita, a co-sharer was affected by the rule of lis pendens and, as such, Anita was not a necessary party to the suit. The learned appellate Court below ultimately found that Plaintiff was entitled to all the relief claimed for in the suit and decreed the suit accordingly.

Therefore, the only question before this Court in the Second Appeal is that if the findings of the learned Appellate Court below can be sustained in law. There is no dispute as to the title of the suit property which was owned by the predecessor-in-interest of the Plaintiff and of Defendant No. 2. It is not also disputed that they amicably in terms of agreement dated March 20, 1935, partitioned the suit property keeping certain portion of it in ejmal for the convenience of all the co-sharers. The Plaintiff has taken such case categorically in para. 6 of the plaint. The Defendant No. 1 in para. 7 of his written statement admitted the execution of the written agreement by the predecessor of the Plaintiff and of his vendor. It is not denied by him that such agreement was not executed by the predecessor of the parlies on March 20, 1935. The Plaintiff as P.W. 1 reiterated his plaint case on oath and asserted that an agreement between the prcdecessors-in-interest of the parties was in fact executed on March 20, 1935. The Defendant No. 1 as D.W. 1 in his examination-in-chicf admitted that there was partition of the suit property in accordance with the terms of the deed of agreement. It further appears that the stamped but unregistered agreement was filed by the Plaintiff and was marked as Ex. 1. From the side of the Defendant No. 1 the xerox copy of the agreement was filed and it has been marked as Ex. A. It further appears by an affidavit dated May 6, 1983, that he disclosed the xerox copy of the agreement. The Plaintiff also disclosed the original agreement in his affidavit dated April 22, 1983. Therefore, there cannot be any dispute as to the agreement Ex. 1 which correspond to Ex. A which was executed by predecessor of the parlies on March 20, 1935. Clause 3 of the agreement clearly states that if any of the co-sharers intends to sell his share in the property he would sell the same to other co-sharers according to fair price or price to be settled by arbitration of five gentlemen, and. in case any of the co-sharers refuse to purchase, then and then only such share of the property could be sold to other purchaser and that none of the co-sharers or their heirs could object to the condition contained in Clause 3 and such objection would not be accepted. Therefore, it can safely be said that the predecessor of the parties agreed to confer a right of pre-emption in favour of other co-sharers as and when a co-sharer intends or decides to sell his share of the properties owned by them. Mr. Sengupta has drawn out attention to Section 14 of the Transfer of Property Act and urged that this clog on transfer invites the mischief of rule against perpetuity as the agreement sought to create an interest which was to take effect after the lifetime of the predecessor-in-interest of the parties. In our view, this Section 14 cannot be invoked in the present case. By the agreement nothing was transferred. What the parlies did, was to sever the portion of the dwelling house for the convenience of possession of the co-sharers and keeping some portion of the property in joint posession or in cjmal and that too for their own convenience. In doing so, they agreed that before sale of the suit property to any stranger in the intending seller co-sharer should offer to oilier co-sharer such property in sale. So it is only an agreement. Now the question is how far this agreement would be binding on the successor of the parlies who entered into the agreement.

Section 54 of the Transfer of Property Act clearly says that a contract for sale of immovable property docs not, of itself, create any interest in or charge on such property. Formerly there was a conflict of judicial opinion on this point whether an agreement of the nature can be construed as creating a covenant of pre-emption and thereby an equitable interest in land and is hit by the rule of perpetuity: see Maharaja Bahadur Sing v. Bal Chand 25 C.W.N. 770 : (1921) 48 I.A. 376 The controversy has been set at rest by the Supreme Court in the decision in Rambaran Prosad Vs. Ram Mohit Hazra and Others, It is held that there was a controversy which arose before the enactment of Transfer of Property Act. It says that rule against perpetuity is not concerned with contracts of sale or with contractual rights and obligations. It adds that it is well-established that the rule of perpetuity concerns rights of properly only does not affect the making of contracts which do not create rights in the property. The rule does not apply to personal contracts which do not create interest in the property even though the contract may have reference to land (paras. 7 and 8). It proceeds further to observe that there has been a change in the legal position in India since the passing of the Transfer of Property Act. This decision refers to Section 40 of the Transfer of Property Act specially to illustration under that Section and it says that true proposition are established: (i) that a contract for sale does not create any interest in the land but is annexed to the ownership of the land and (ii) that the obligation can be enforced against the subsequent gratuitous transferee from the vendor or a transferee or value but with notice. The rule against the perpetuity, it is said, which applies to equitable estate in English law cannot be applied to a covenant of pre-emption because of Section 40 of the Transfer of Property Act which does not make the covenant enforceable against the assignee oh the footing that it creates an interest in the land. It further says reading Section 14 along with Section 54 of the Act, makes it manifest that a mere contract for sale of immovable property docs not create any interest in the immovable property and it, therefore, follows that the rule of perpetuity cannot be applied to covenant of pre-emption even though there is no time limit within which option has to be exercised. It was further held with reference to various decisions of different High Courts on the point that the view taken by the Privy Council is no longer the correct law.

In our view, the learned Appellate Court below correctly applied the provision of Section 40 of the Transfer of Property Act. to the facts of the present case. It cannot be denied that the owners of the property agreed as far back in 1935 to give a co-owner or a co-sharer of the property a right of pre-emption if any of the co-sharer of the property a right of pre-emption if any of the co-sharer/co-owner intends to sell his share in the property owned by them. As already stated that the parties are not at dispute as to the execution of agreement Ex. 1 which corresponds to Ex. A. It is also clear from the recitals of the agreement specially in clause. 3 that such agreement of pre-emption would be binding not only on the executants but also their heirs and successors. The Defendant No. 1 is a third parly and a stranger. The evidence clearly shows that he was aware of the prior agreement arrived at by the predecessors-in-interest of his vendor. Therefore, he is under an obligations to allow pre-emption to the Plaintiff and the Plaintiff can exercise such right against the Defendant who was a transferee with notice of the agreement. Such right is not affected even if the Defendant No. 1 paid the consideration money as he made the purchase with notice of the agreement.

Next it has been contended on behalf of the Defendant/Appellant that the right of pre-emption would be available only against the stranger purchaser and that the suit property was sold by Defendant No. 1 to Anita, a co-sharer, in the line of Krishna Kishore by a registered sale deed dated August 16, 1982. The suit was instituted on July 13, 1982. That being the case, the sale in favour of Anita has been affected by the rules of lis pendens and cannot affect the rights of the Plaintiff.

Considering all these we are of the view that the judgment and decree of the learned Appellate Court below do not suffer from any infirmity either on the question of fact or on law.

Mr. Sengupta has urged in the last resort that Anita being an admittedly co-sharer should have been made a party for the purpose of effective and proper adjudication. In our view, the Order 1 Rule 3A of the CPC gives a discretion or power to the Court in this regard. Where it appears to the Court that any joinder of Defendants may embarass or delay the trial of the suit, the Court may order separate trial or to make such other order as may be expedient in the interest of justice. It is also the law that the Appellate Court shall have all the powers of the trial Court. See Order 41 Rule 33 of the Code of Civil Procedure. The suit is of the year of 1982. We do not find any good reason to delay the proceeding of the suit or appeal by bringing in the subsequent transferee who purchased the suit property during the pendency of the suit on record is this proceeding or to add her as as a party.

Thus, on consideration of the entire facts and circumstances and laws on the point we find no merits in the appeal which shall stand dismissed. The judgment and decree of the Court of First Appeal are hereby affirmed.

We make no order as to costs.

Shamsuddln Ahmed, J.

I agree.