Sunder Singh and Others vs Narain Singh and Others

S.B. Capoor, J.—This is an appeal by the Defendant-vendees from a decree in Plaintiffs'' favour in a pre-emption suit.

The Plaintiffs were Narain Singh, Partap Singh, Mitha Singh and Babu Singh, Biswedars of village Jalalpur, tehsil Rajpura, in the district of Patiala, The property which they sought to preempt in their suit consisted of agricultural land as well as some baras situated in their village. The sale was made,--vide a sale deed dated the 15th January, 1955, (Exhibit D.A.). The vendors were Punnu Singh and Mansha Singh, who were the owners of the property (referred to in the judgment of the trial Court as Defendant No. 2) and the vendees were 10 in number (who have been referred to in that judgment as Defendant No. 1) and the consideration for the sale was Rs. 11,615. Before the Plaintiffs instituted their suit, consolidation of holdings took place in their village with the result that Nos. 1 to 6, out of the Vendee-Defendants, were given land measuring 89 bighas 9 biswas and also some baras as mentioned in the heading of the plaint. The land allotted to vendees Nos. 7 to 10 in the consolidation in lieu of the land sold, was mixed up with the allotment made in lieu of their own land. However, as specified in the heading of the plaint, vendees Nos. 7 to 10 were allotted agricultural land in two lots.

(1) Agricultural land measuring 33 bighas 15 biswas bearing killa Nos. 391 min. 392, 391--403/2, 393 min. 402 min. 403, 404, 225, 226, 227, 250 and 260. The total value of this was Rs. 23-12-0.

(2) Agricultural land measuring 18 bighas 2 biswas bearing killa Nos. 373 min. 372 min. 374 mm, 365/1, 321 and 318, of the total value of Rs. 11-9-6.

In each of these two lots, the proportionate value as corresponding to the share of these vendees Nos. 7 to 10 in the lands sold by the sale deed under consideration, was Rs. 5-10-3.

The Plaintiffs on the 14th January, 1956, instituted their suit in the Court of the Subordinate Judge, Second Class, Rajpura, in which they claimed that they had a preferential right of preemption on the ground that they were the near collaterals of vendor-Defendants and also co-sharers in the land sold while the vendees were strangers. They, therefore, claimed that the Plaintiffs'' right of pre-emption extended to the land allotted to the Defendant-vendees as a result of the consolidation of holdings operations in lieu of the land sold. The suit was resisted by the Defendant-vendees. On the pleadings of the parties, the following issues were framed:

(1) Whether the suit regarding the land which is obtained in lieu of the land sold by Punnu and Mansha Defendants No. 2 to Defendants No. 1 is maintainable?

(2) Wheher the Plaintiffs have got preferential right of pre-emption?

(3) Whether the Plaintiffs have waived their right by giving their consent to the sale in dispute?

(4) Whether the persons now in possession of the land, originally sold, are necessary parties?

(5) Whether this Court has no jurisdiction to try the suit with respect to Baras?

(6) Whether the Defendants have made improvements upon the land in their possession and to what extent? If so, what is its effect?

(7) Relief.

The Subordinate Judge of the Second Class found issues Nos. 1 and 2 in favour of the Plaintiffs and issues Nos. 3 to 6 against the Defendants. Under issue No. 7, he observed that the sale consideration of Rs. 11,615 was not disputed by the parties, but that since pecuniary jurisdiction of that Court extended up to Rs. 5,000 only he could not pass any order in respect of the amount in suit. Accordingly, the case was submitted to the District Judge, Patiala, who took it on his own file, and by his judgment, dated the 14th January, 1957, he passed a decree for pre-emption regarding the property in suit with costs in favour of the Plaintiffs and against the Defendants on the former depositing the amount of Rs. 11,615 in Court for payment to the vendees by or on the 14th March, 1957, failing which the suit shall stand dismissed with costs. This is the decree against which appeal has been preferred by the Defendant-vendees.

The law of pre-emption applicable in Patiala was the Punjab Pre-emption Act, 1913,--(vide Foreign Ministry (Legislation Branch), Patiala, notification No. Leg./21, dated 1st Vaisakha, 2001/13th May, 1944, as published on page 379 of Pepsu Code, Volume II), As from the 1st November, 1956, the Patiala and East Punjab States Union, in which the district of Patiala Was, had merged with the Punjab, the Punjab Pre-emption (Amendment) Act, 1960, Punjab Act, No. 10 of 1960, made extensive amendments to the Punjab Pre-emption Act, 1913, and it has curtailed the right of pre-emption so far as it relates to sales of agricultural land and village immovable property. It is now common ground between the learned Counsel for the parties that under the amended law the preferential right of pre-emption with regard to the entire property sold would be available to one of the Plaintiffs, that is, Narain Singh, who is the father''s, brother''s, son of the vendor, and a decree, if made, can only be made in favour of Narain Singh.

The only issue on which arguments have been addressed to us in the appeal is issue No. 1, and it is necessary to consider what is the effect of new lands having been allotted to the vendees in lieu of the lands sold as a result of the consolidation of holdings.

The Act under which the agricultural holdings were consolidated in the State of Patiala and East Punjab States Union is the Patiala and East Punjab States Union Holdings (Consolidation and Prevention of Fragmentation) Act, 2007 Bk. (Act No. V. of 2007 Bk.), hereinafter to be referred to as the Act. The relevant Sections are 24 and 25, which are reproduced below:

[His Lordship read Sections 24 and 25 and continued:]

Section 25 would be of avail to Plaintiffs only if it could be shown that in case of a sale by the land-owner of his original holding, the liability of the sale being pre-empted at the instance of a third party, who had a superior right of preemption to that of the vendee, would be an "encumbrance" within the meaning of the term as used in Section 25. That, however, is not so. Under Clause (m) of Sub-section (1) of Section 2 of the Act, the words and expressions used in the Act but not defined, have the meaning assigned to them in the Punjab Land Revenue Act, 1887. The definition of "encumbrance" as given in Clause (16) of Section 3 of the latter Act is as follows:

(16) "encumbrance" means a charge upon or claim against land arising out of a private grant or contract.

It is claimed that a right of pre-emption is not such a charge upon or claim against land as it does not arise out of any private grant or contract. Hence, Section 25 is of no help to the Plaintiffs.

Mr. Dalip Chand Gupta, on behalf of the Plaintiffs, had, therefore, rested his case on Section 24. Mr. F.C. Mital on behalf of the Defendant-Appellants, maintained that Section 24 does not deal at all with the rights of the third party but is Confined to the rights of a land-owner and his tenants-at-will inter se, and his contention is that the rights of third party were exclusively dealt with in Section 25. The wording of Section 24 does not, however, support him and the plain interpretation is that the land-owner shall have the same right in the land allotted to him in pursuance of the scheme of consolidation as he held in the original holding and the tenant-at-will shall have the same right in the land allotted to him as a result of consolidation as he had in his tenancy. It is true that in Section 25, the Legislature chose to make a specific provision with regard to certain encumbrances with which the holding of the land-owner or the tenancy of the tenant was burdened. This by itself would not mean that if some right other than of the nature as specified in Section 25, could be legally enforced by a third party with regard to the original holding of the land-owner, it could not be enforced in the land allotted to him in pursuance of the scheme of consolidation in lieu of that original holding.

There are no reported cases dwelling on the pointr under the pre-emption law. There are however, several cases in which it has been held that if an ancestral land, the alienation of which by the male proprietor can under the Customary Law of the Punjab be challenged by his collateral within the fifth degree on the ground of its being without consideration and legal necessity, comes under consolidation operations and in consequence of those operations the alienor is allotted other land in lieu of the land which was ancestral qua the parties, the Plaintiff would be entitled to a decree with regard to the land allotted as a result of consolidation operations. In Mihan Singh and Ors. v. Piara Singh and Ors. (1946) 48 P.L.R. 536, a Division Bench held that by virtue of the provisions of the Punjab Consolidation of Holdings Act, 1936, a land-owner or a tenant shall have the same right in the holding or land allotted to him in pursuance of a scheme of consolidation as he had in his original holding or tenancy as the case may be. Obviously, the learned Judges had in mind Section 12 of the Act referred to which is in those terms. Section 24 of the Act No. V. of 2007 Bk., with which we are concerned in this appeal, is in practically the same terms. This case has been followed in Gurdev Singh and Ors. v. Dasaundhi and Ors. AIR 1948 E.P. 22, and the correctness of the principle has been reiterated in Surjit Singh v. Bishna and Ors. (1949) 51 P.L.R. 394 . In AIR 1949 87 (Privy Council) also a view was expressed that prima facie the re-allotment of land which took place as a result of consolidation of holdings operation would not affect the character of the land dealt with and the land taken in exchange for ancestral land would itself be ancestral.

These cases establish that Section 24 of the Act is not, as argued by Mr. Mital, confined to relationship between landlord or tenant-at-will inter se, and further that rights of the third party in the land, other than those rights specifically mentioned in Section 25 of the Act, can be enforced against the land-owner in respect of the land allotted to him in consolidation in lieu of his original holdings.

Mr. Mital then argued that the right of preemption is not analogous to the right of the collateral to challenge the alienations made by the proprietor of land in the Punjab under the Customary Law. He asserted that the very nature of the ancestral property places limitation on the rights of the holder to alienate it, while in the case of a pre-emptor no right arises until the property is sold and the title to the property in the pre-emptor comes in only when money is paid in pursuance of the decree granted to the Plaintiff. This, however, is not the correct understanding of the nature of the right of pre-emption. This point has been exhaustively considered by their Lordships of the Supreme Court in Shri Audh Behari Singh Vs. Gajadhar Jaipuria and Others, At page 422, it has been observed as follows:

The correct legal position seems to be that the law of pre-emption imposes a limitation or disability upon the ownership of a property to the extent that it restricts the owner''s unfettered right of sale and compels him to sell the property to his co-sharer or neighbour as the case may be. The person who is a co-sharer in the land or owns lands in the vicinity consequently gets an advantage or benefit corresponding to the burden with which the owner of the property is saddled, even though it does not amount to an actual interest in the property sold.

The crux of the whole thing is that the benefit as well as the burden of the right of pre-emption run with the land and can be enforced by or against the owner of the land for the time being although the right of the pre-emptor does not amount to an interest in the land itself. It may be stated here that if the right of preemption had been only a personal right enforceable against the vendee and there was no infirmity in the title of the owner restricting his right of sale in a certain manner, a bona fide purchaser without notice would certainly obtain an absolute title to the property, unhampered by any right of the pre-emptor and in such circumstances there could be no justification for enforcing the right of pre-emption against the purchaser on grounds of justice, equity and good conscience on which grounds alone the right could be enforced at the present day.

It is, therefore, clear that the right of preemption imposes a corresponding burden which can be enforced against the owner of the land the sale of which is sought to be pre-empted, and to that extent there is an infirmity in the title of the owner. When, therefore, Section 24 of the Act provides that the land-owner shall have the same right in the land allotted to him in pursuance of the scheme of consolidation as he had in his original holdings, it follows that if there was any infirmity in his title to the original holding the same infirmity will attach to his title in the land allotted. I am, therefore, of the view that there can be no restriction in principle between the right of the pre-emptor to follow the land and the similar right of the collateral which was recognised in Mihan Singh and Ors. v. Piara Singh and Ors. (1946) 48 P.L.R. 536 and the other cases referred to. It is true that the holder of the land subject to right of pre-emption is its full owner, and so is a male proprietor in the Punjab governed by custom in ancestral land but in both cases, there is a clog to his power of alienation. By virtue of Section 24, the same clog which is attached to the original holding will attach to the land allotted to the land-owner in pursuance of the scheme of consolidation.

Mr. Mital then maintained that even if the Plaintiff is allowed the benefit of Section 24 of the Act, he could not be granted a decree in this case because the land allotted as a result of consolidation operations to Defendants Nos. 7 to 10 was in lieu of not only their share in the land sold but also of their own holdings and these were all in extricably mixed up. So far as the land allotted to Defendants Nos. 1 to 6 is concerned, it presents no difficulty because they did not own any land in this village previously and all the land allotted to them in consolidation was obviously in lieu of their share in the land which they purchased,--vide sale deed under consideration. I do not find any real difficulty even with regard to the land allotted to Defendants Nos. 7 to 10. The correctness of the respective proportionate value as given in the heading of the plaint and reproduced in the opening part of this judgment is not disputed.

It was held in Gurdev Singh and Ors. v. Dasaundhi and Ors. AIR 1948 E.P. 22, that the principle, that when the ancestral and the non-ancestral parts of the land are inextricably mixed up, a Court may not hold an undivided share of that plot proportionate to the ancestral land included therein as ancestral, cannot be extended to cases in which there has been BO such inextricable mixing up of ancestral and non-ancestral land held by a land-owner and all that has taken place is that in lieu of land which was partly ancestral and partly non-ancestral but In which the ancestral and non-ancestral portions were quite separate and distinct from each other such landowner has got a certain plot of land, either by means of private treaty as in the case of exchange or as a result of the general redistribution of the lands in the estate as in the case of consolidation of holdings. There is no reason why the whole of the land he has so got should be regarded as non-ancestral and why a share of such land bearing the same proportion to the whole as the ancestral portion of his original holding bore to such holding should not be regarded as ancestral.

This principle is fully applicable and I am, therefore, of the view that the decree appealed from must be affirmed and the appeal dismissed with the difference, however, that the decree will be in favour of Narain Singh Plaintiff only and he will be entitled to his proportionate costs against the Defendant-Appellants throughout. So far as the Plaintiffs other than Narain Singh are concerned, the suit shall stand dismissed but the parties will be left to bear their own costs.

A.N. Grover, J.

I agree.