Suraj Bhan & Ors. vs Gorakh Ram

Heard learned counsel for the parties.

Leave granted.

The judgment dated 21.02.2018 in R.S.A No. 444 of 1995 passed by the High Court of Punjab and Haryana at Chandigarh has been called in question in this appeal.

The brief facts in this appeal are as under:

The respondent herein filed a suit claiming pre-emption on the ground that he was a co-owner of the suit property and had been in possession thereof by virtue of decree dated 28.03.1984. The said decree had been passed by the Trial Court in a prior suit wherein the respondent was declared as a co-sharer in the suit property. Based on this, the respondent filed the suit for pre-emption, which came to be decreed on 13.08.1993. This decree was subsequently confirmed by the First Appellate Court on 10.12.1994.

In the meanwhile, the appellant herein filed an appeal against the decree dated 28.03.1984. This appeal was allowed and consequently, the declaration that the respondent is a co-sharer in the suit property was set aside vide order dated 30.04.2005. This order was confirmed by the High Court on 11.05.2010 and by this Court vide order dated 25.08.2005 in SLP (C) No.23144/2014. Thus, the decree passed in favour of the respondent, declaring him as a co-sharer, was set aside and this has been confirmed upto this Court. Consequently, the respondent cannot be said to be a co-sharer in the suit property.

Despite this, in the second appeal filed by the appellant herein against the decree dated 13.08.1993 passed in the suit for pre-emption, the High Court has, vide the impugned judgment, held that the respondent is entitled to exercise his right of pre-emption under the provisions of the Punjab Pre-emption Act, 1913. In doing so, the High Court relied upon the judgment of this Court in Shyam Sunder & Ors. v. Ram Kumar & Anr., (2001) 8 SCC 24.

In the aforementioned judgment by a Constitution Bench of this Court (supra), the principles of pre-emption have been succinctly stated as follows:

"In changed circumstances, the right of pre-emption may be called outmoded, but so long it is statutorily recognized, it has to be given the same treatment as any other law deserves. The right of pre-emption of a co-sharer is an incident of property attached to the land itself. It is some sort of encumbrance carrying with the land which can be enforced by or against the co-owner of the land. The main object behind the right of pre-emption, either based on custom or statutory law, is to prevent intrusion of a stranger into the family-holding or property. A co-sharer under the law of pre-emption has right to substitute himself in place of a stranger in respect of a portion of the property purchased by him, meaning thereby that where a co-sharer transfers his share in holding, the other co-sharer has right to veto such transfer and thereby prevent the stranger from acquiring the holding in an area where the law of pre-emption prevails. Such a right at present may be characterised as archaic, feudal and outmoded but this was law for nearly two centuries, either based on custom or statutory law. It is in this background the right of pre-emption under statutory law has been held to be mandatory and not mere discretionary. The court has no option but to grant decree of pre-emption where there is a sale of a property by another co-sharer."

From the aforesaid observations, it is amply clear that the right of pre-emption is a sort of encumbrance carrying with the land, which can be enforced by or against the co-owner of the property only. This is because the main object behind the right of pre-emption is to prevent intrusion by a stranger into the family holding of a property. Section 17 of the Punjab Pre-emption Act, 1913 also indicates this by stating that the co-sharers or the heirs of a person can claim the right of pre-emption. The provision reads as follows:

"17. Where several pre-emptors are found by the Court to be equally entitled to the right of pre-emption, the said right shall be exercised-

a) if they claim as co-sharers, in proportion among themselves to the shares they already hold in the land or property;

b) if they claim as heirs, whether co-sharers or not, in proportion among themselves to the shares in which but for such sale they would inherit the land or property in the event of the vendor's decease without other heirs;

c) [Omitted]

d) [Omitted]

e) in any other case, by such pre-emptors in equal shares."

Thus, it is clear that in order to claim the right of pre-emption, the plaintiff should have such right as, inter alia, the co-sharer or heir of the said property.

In the matter at hand, though the respondent was declared as a co-sharer by virtue of the decree dated 28.03.1984, the said decree was set aside by the First Appellate Court, the High Court as well as this Court. Thus, the respondent cannot be considered as a co-sharer, and since it is so, he cannot claim the right of pre-emption either.

Accordingly, the judgment of the High Court dated 21.02.2018 is liable to be set aside and Civil Case No. 260 of 1990 stands dismissed.

The appeal is allowed in the above terms.