Rambishun Singh and Others vs Kuldip Singh and Others

Ross, J.—This is an appeal by the defendants against a decree for pre-emption in favour of the plaintiff-respondent. The plaintiff was cosharer proprietor in mauza Kokta, Tauzi No. 10225 in the Gaya Collectorate. On 19th December 1920 the pro-forma defendants sold their share to the appellants. The plaintiff alleges that he got information of the sale on 22nd December 1925 and performed the necessary ceremonies. He therefore claimed a decree for pre-emption in respect of the share purchased by the appellants-defendants. There was a further prayer in the plaint that as the consideration expressed in the sale deed, viz. Rs. 812, was nominal and the real consideration was Rs. 500, a pre-emption decree might be passed in favour of the plaintiff on ascertaining the consideration (bad tunkin zarsaman mazkur). In the written statement the defendants denied the plaintiff''s allegation that he came, to know of the sale on 22nd December and it was stated that even on the date of the execution of the sale deed and on the day of registration the plaintiff had information regarding the purchase, but he laid no claim. As to the consideration it was pleaded that Rs. 812 was the true consideration of which Rs. 808 was left in deposit with the defendants for payment of a decree of Rani Bhuneshwari Koer. It is to be noted that no issue was framed as to when the plaintiff had information of the sale. It appears that at the time of the sale the estate was under partition. The sale deed was registered on 22nd December 1925 and on that date the appellants applied to be substituted for the pro forma defendants in the takhta bandi which was then being made.

Both the Courts below have found that the ceremonies of talab-i-mawasibat and talab-i-istishad were duly performed but there is no finding in either of the judgments as to the precise date upon which the plaintiff got the information of the sale. The first ceremony was performed on 22nd December and the second ceremony on the next day. The following passage occurs in the judgment of the appellate Court:

As regards the two prescribed demands talab-i-mawasibat and talab-i-istishad, I agree with the learned Munsif that both these demands were duly made. The first demand was undoubtedly made in or near the Court room of the third Munsif of Gaya. The plaintiff got some information that the kabala was to be registered that day (22nd December 1925) at Gaya. The plaintiff probably kept (P.W. 3) Raghunandan on the look out for registration and requested him to inform him as soon as the registration took place. The plaintiff through good advice or bad thought it better to make the first demand in the very Court in which he thought the suit would be instituted. I entertain no doubt that Raghunandan came and informed him of the registration of the kabala in the third Munsif''s Court and the plaintiff appears to have made the demands, etc.

The main argument in second appeal is based upon this passage. It is argued that some interval elapsed between the plaintiff''s knowledge of the transaction and the performance of the ceremony, because he waited for the registration and sent Raghunandan to bring him word when the registration was completed, so that he might perform the ceremony in a public place; and it is contended that the plaintiff by reason of this delay lost his right of pre-emption. The second argument is that the plaintiff applied to the commissioner who was making the partition that the takhta allotted to the defendants might be exchanged for the takhta allotted to him; and he therefore recognized the validity of the defendants'' purchase, and on this ground also lost his right of pre-emption. The third argument is that no decree can be passed by reason of the said prayer in the plaint referred to above which shows that the plaintiff was never ready and willing to pay the price paid by the defendants, but was only willing to pay Rs. 500.

The first argument required an examination of the authorities. Baillie says at p. 472:

There must be a cessation of the seller''s ownership in the subject of sale.... There must also be an entire cessation of all right on the part of the seller. There is therefore no right of pre-emption for an invalid sale.

In Janki v. Girjadat [1885] 7 All. 482 it was held by the Pull Bench (Mahmood, J. dissenting) that where the vendor transferred the right to possession and gave possession to the vendee the right of pre-emption arose. There had been an agreement for sale with delivery of possession and payment of the consideration, but no registered instrument, such as is required by the Transfer of Property Act, had been executed. Mahmood, J., on the contrary was of opinion that a registered instrument was necessary in Begum v. Muhammad Yakub [1894] 16 All. 343, also a decision of the Pull Bench, Edge, C.J., said:

What apparently was considered as giving a right of pre-emption was either an absolute out and out sale as English lawyers understand the term, or a contract of sale, subject to a right of option in the intending purchaser, which deprived the intending vendor of any right to refuse to complete the sale, should the intending vendee exercise his option to purchase.

It was held that the question was governed by the Mahomedan law applicable to the sect to which the vendor belonged and that to import into the Mahomedan law of pre-emption the definition of the word "sale" coupled with the restrictions on the transfer of ownership contained in Section 54, Act 4 of 1882, would be materially to alter the Mahomedan law of pre-emption, Banerji, J., dissented. This decision was considered by the Calcutta High Court in Jadu Lal Sahu v. Janki Kaer [1908] 35 Cal. 575 their Lordships distinguished the case which they were deciding, on the ground that in that case the price was not paid and delivery off the property was not made before registration.

It has been contended for the respondents that the right of the vendor cannot be held to have ceased in the property before the price was paid. Difficulties appear likely to arise in applying the principle that for the purposes of pre-emption it is necessary to apply the Mahomedan law relating to sale, but it seems to me that the real solution is to be found in determining in each case what was the intention of the parties. In the present case we think that there can be no doubt that the vendor and the vendee did not regard the sale as a complete sale, till the price had been paid and the dead registered.

In Budhai Sardar v. Sonaulla Mridha [1914] 41 Cal. 943, Carnduff. J. held that the general law was paramount and superseded the Mahomedan law. Richardson, J., in referring to Jadu Lal''s case and the suggestion that the solution of the problem is to be found in determining in each case what was the intention of the parties said:

A working rule might perhaps be found on that with the addition that the intention of the parties to the sale must be manifested in some unequivocal way to the outside world. One effectual and acceptable mode of manifesting that intention may be delivery of possession, another may be registration. In that case there had been no payment of consideration or delivery of possession before the registration of the deed.

In Kheyali Prasad v. Mullick Nazarul Alam [1916] 1 Pat. L.J. 174, Mullick, J., seems to have dissented from the two Full Bench decisions of Allahabad referred to as well as from Jadu Lal''s case, and to have held that the sale was not complete until after registration. A somewhat different view however was taken by Roe, J. who considered that the test was whether the sale was complete in the eyes of the parties. The question came before the Judicial Committee in Sitaram Bhaurao v. Jiaul Hasan Khan AIR 1923 P.C. 41. Their Lordships accepted the view expressed in Jadu Lal''s case that the real solution was to be found in determining in each case what was the intention of the parties. They also accepted the decision in Begum v. Muhammad Yakub [1894] 16 All. 343 that it was not the intention of the legislature in passing Act 4 of 1882 to alter the Mahomedan law of pre-emption. Their Lordships held that the intention of the parties must be looked at in determining what was to be taken to be the date of sale with reference to which the ceremonies were performed. In that case the pre-emptor was informed of the intention of the vendor and the vendee by direct notice of the transaction from the vendor and it was held that in these circumstances, as the parties intended that the agreement for sale should have the effect of a sale, the right of preemption arose on the agreement. The learned advocate for the appellants relies upon these decisions as ruling that registration is not necessary and he contends that the right of pre-emption arose as soon as the plaintiff knew of the execution of the deed of sale and he was not entitled to wait for registration. That in my opinion is not the effect of the decision. Their Lordships definitely affirmed the rule laid down by Brett, J. in Jadu Lal''s case that the intention of the parties is to be looked at. It is argued that the deed is a deed of out and out sale transferring ownership and therefore the intention of the parties was that it should take effect at once but that intention (if it was the intention) could not be known to the plaintiff who was not a party to the deed and had no means of informing himself of its contents. Consequently there is the necessity for the additional requirement suggested by Richardson, J., that the intention of the parties to the sale must be manifested in some unequivocal way to the outside world. Now here there was no manifest payment of consideration, beyond a few rupees because the bulk of the price was to remain with the vendee in trust for payment to a creditor of the vendor. What was sold was an undivided share in a joint property and consequently there could be no delivery of possession and nothing to indicate that possession had been transferred until the registration of the deed and its consequent transfer to the vendee. In these circumstances it seems to me that the decision of the Courts below is consistent with the effect of the decisions referred to above and especially with the ruling consideration that the intention of the parties must be looked at. The intention of the vendor and vendee was only manifested to the plaintiff by the act of registration of the deed. The difficulty of deciding this point arises from the fact that it was not a point that was taken at the trial or in the Court of appeal below. It is raised merely as an inference from the finding about the manner in which the first ceremony was performed but it raises a question of intention or knowledge of intention which is a question of fact and ought to have been raised in the Courts below. In my opinion in the circumstances of this case the plaintiff was entitled to wait until the deed was registered before performing the first ceremony.

Baillie says (p. 499):

The right of pre-emption is rendered void by implication, when anything is found on the part of the pre-emptor that indicates acquiescence in the sale, as for instance ... when he has made an offer for the house to the purchaser or has asked if he will give it up to him.

It is contended that the application made by the plaintiff before the commissioner for the takhta allotted to the defendants brings the plaintiff within this rule. It is argued that he recognized the defendants'' purchase and offered an exchange with him on the basis of that purchase. It seems to me that no such inference can be drawn. The defendants had been substituted for their vendor as parties to the partition suit and consequently any application in that suit had to recognize their position as parties. In the petition (Ex. G) the plaintiff alleged that the takhta allotted to him was bad and that the commissioner had not taken into consideration his lahao and that he ought to have been given certain other plots and that his takhta might be exchanged for that of the defendants. This does not to my mind imply any acquiescence in the sale. The petition was filed on 6th February 1926, long after the pre-emption ceremonies had been performed and long after the present suit had been instituted. The partition was proceeding all this time and the plaintiff was entitled to claim for himself any takhta that he desired and that had been allotted to another cosharer, and that is all that he did by this petition. I can find nothing in this to defeat the right of pre-emption. The plaintiff was claiming this takhta in his own right and not in the right of the defendants. In fact, until the final decree had been passed it is incorrect to say that this takhta belonged to the defendants. All that they had up to that stage was an undivided share in the whole estate. The second argument therefore fails.

The third argument rests on no better foundation than a misconstruction of the second prayer in the plaint. In my opinion that prayer is not a prayer for the passing of pre-emption decree or deposit of Rs. 500, but for a pre-emption decree or deposit of the consideration money after that has been ascertained by the Court. The word "ascertainment" (tankin) becomes meaningless if the prayer is read as containing an assertion that the price had already been ascertained. That a pre-emptor who doubts whether the consideration has been truly expressed in the deed is entitled to have the question determined by the Court is established by the amplest authority. Baillie at p. 488 says:

It is not incumbent on the pre emptor to produce the price at the time of making his claim. Nay, he may lawfully contest the matter without producing the price during the sitting of the Judge. But after the decree has been pronounced, he should then prudence it: see also Jahangeer Buksh v. Bhickaree Lall [1869] 11 W.R. 71; Heera Lal v. Moorut Lall [1869] 11 W.R. 275; Nundo Pershad Thakur v. Gopal Thakur [1884] 10 Cal. 1008; Lajja Prasad v. Debi Prasad [1881] 3 All. 236 and Karim Buksh v. Khudu Buksh. [1894] 16 All. 247.

The result is that all the arguments advanced on behalf of the appellants fail and the appeal must be dismissed with costs.

Scroope, J.

I agree.