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PETITIONER: KRISHNA DASS AGARWAL

       Vs.

RESPONDENT: KANHAIYA LAL

DATE OF JUDGMENT:       19/07/1996

BENCH: B.P.JEEVAN REDDY, SUHAS C.SEN

ACT:

HEADNOTE:

JUDGMENT:                       J  U D G M E N T B.P. JEEWAN REDDY,J.      Leave granted. Heard the counsel for the parties.      This appeal  is preferred  against the  judgment of the learned Single  judge  of  the  Madhya  Pradesh  High  Court dismissing the  Second appeal  preferred by   the appellant- plaintiff herein.      On  December  5,  1960,  the  respondent,  Kanhaiyalal, purchased the suit house from Ram Chander and others under a sale deed,  which was registered on December 10, 1960, for a consideration of Rupees eight thousand. On December 5, 1961, the appellant-plaintiff instituted a suit seeking to enforce his right  of pre-emption  on  two  grounds,  viz.,  (1)  an agreement said  to have been executed by Nath Mal, father of Ram Chander  agreeing to  give the  plaintiff the  right  of first purchase  in the  event of  sale of the said house and (2) the  Gwalior pre-emption  Act which  created a  right of pre-emption in  favour of dominant-heritage holder vis-a vis servient-heritage holder/  The plaintiff also relied upon an alleged  customary   right  of  pre-emption.  The  defendant disputed the plaintiff’s claim inter alia on the ground that the Gwalior  pre-emption  Act  is  unconstitutional  and  is unenforceable with  effect from  date of the commencement of the Constitution  of India. The Trial Judge decreed the suit on July  31, 1967. the respondent, Kanhaiyalal, preferred an appeal which  was allowed by the learned District Judge. The grounds on  which the  learned District  Judge  allowed  the appeal are  : (i)  inasmuch as  the Gwalior  Pre-emption Act has been repealed pending the said appeal [i/e/. on June 28, 1968], the right of pre-emption claimed by the plaintiff can no longer  be enforced.  The plaintiff cannot also fall back upon customary  right of  pre-emption inasmuch  as the  said right cam  to an  end with the enactment of the Gwalior Pre- emption Act  in Samvat  1992. The  said custom  does not and cannot revive  on the repeal of the said enactment. (ii) The alleged agreement    of  preemption  offended  the  rule  of perpetuity   and because  the respondent, Kanhaiyalal, was a bonafide purchaser  of value  without  notice  of  the  said agreement, the agreement cannot be enforced against him. The learned District  Judge, However,  declined  to  record  any

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finding on  the plaintiff’s assertion that he is a dominant- heritage holder.  The High Court dismissed the second appeal agreeing with  the learned  District Judge  on the effect of repeal of  the Gwalior  Act pending  the appeal.  It  relied mainly on the language employed in Section 23 of the Gwalior Pre-emption Act  for arriving  at the  said conclusion.  The High Court  also took the view that Section 10 of the Madhya Pradesh General  Clauses Act  does not come to the rescue of the plaintiff. The correctness of the view taken by the High Court is challenged in this appeal.      In Bishan  Singh v.  Khazan Singh [A.I.R. 1958 S.C. 838 =1959 S.C.R  878], Subba Rao, j., speaking for a three judge Bench, observed  that "the  right (of  pre-emption) being  a very weak  right, it  can  be  defeated  by  all  legitimate methods, such  as the  vendee allowing  the  claimant  of  a superior of equal right being substituted in his place" [See Para 11]".  Apart from being a weak right, it is claim which is generally  looked upon  by courts  with certain amount of distaste. That  is because it interferes with the freedom of the owner to sell his property to the person of his choice.      The Gwalior  Pre-emption Act,  which provided  for pre- emption on  several grounds,  also provided  as  follows  in Section 23:      "23. Effect  of loss  of  right  of      pre-emptor prior to decree.-           No  decree   for   pre-emption      shall be  passed in  favour of  any      person  unless  he  has  subsisting      right of pre-emption at the time of      the decree  but where  a decree for      pre-emption  has   been  passed  in      favour of a plaintiff, whether by a      court  of   first  instance  or  of      appeal, the right of such plaintiff      shall   not be affected by any such      transfer or  loss of  his  interest      accruing   after the  date of  such      decree."      The Act  was repealed,  as stated  above, by the Madhya Pradesh Agra-Kraya-Vidhi  Nirsan Adhiniyam, 1968, during the pendency of  the appeal  before the  learned District Judge. Section 23  says that  the right of pre-emption must subsist "at the  time of  decree". The  High Court has construed the said words  as meaning  the final  and operative  decree. In other words,  the High Court is of the opinion that inasmuch as an appeal was filed against the decree of the trial court in this  case, the  decree contemplated by section 23 is the decree to be passed in the appeal, and if a second appeal is filed, the  decree to  be   passed by the High Court, as the case may  be. On  this reasoning,  it held that the right of pre-emption must  subsist  on  the  date  of  the  appellate decree/second appellate  decree. Since  the act was repealed during the  pendency of  the appeal,  it held, the right was not subsisting on the date of the appellant decree. The High Court Relied upon the principle, applicable to civil courts, that appeal  is continuation of the original suit, that once an appeal  is filed,  the decree  appealed against loses its finality and  that the  only effective decree in such a case is the  decree of  the appellate court, whether it is one of affirmation, modification  or setting aside. Accordingly, it held that  when Section 23 speaks of decree, it is the final decree- be it the decree of the trial court, first appellate or the  second appellate court, as the case may be. For this proposition, the High Court also placed strong reliance upon the Division Bench decision of the Madhya Pradesh High Court

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in Nirmala  Devi v. Km. Renuka [1972 (21) J.L.J. 453 ]. That was, of course, a case where the repeal of the said Act took place during  the pendency  of the  suit itself and it is on this ground that Sri Satish Chandra, learned counsel for the appellant, seeks  to distinguish the said decision. The said distinction is no doubt valid but the question still remains whether the  interpretation placed  by  the  High  Court  on Section 23 is Unsustainable in law.      Section 23 is in two-parts. The first part say that "no decree for  pre-emption shall  be passed  in favour  of  the person unless  he has  a subsisting  right of pre-emption at the time  of the decree", while the second part, which is in the nature  of a  proviso, says:  "(B)ut where  a decree for pre-emption has  been  passed  in  favour  of  a  plaintiff, whether by a court of first instance or of appeal, the right of such plaintiff shall not be affected by any such transfer or loss  of his  interest accruing  after the  date of  such decree". Sri  Satish Chandra strongly relies upon the second part  while   Sri  Parasaran,   learned  counsel   for   the respondent, emphasises  the first  part. In our opinion, the second  part  visualises  the  situation  where,  after  the passing of  the trial  court’s decree or the first appellate Court’s decree,  the plaintiff  transfers his right and says that such  transfer shall  not affect the interest which has accrued to  the plaintiff  under the  decree in  his favour. This provision  is premised upon the assumption that the Act continues to  be in  force. It  does not  cover a  situation where the  Act itself  ceases to be in force. Now, coming to the first  part, it  is possible  to take  two views.  It is possible to  construe the  words "at the time of the decree" as referring to the decree infavour of the plaintiff against which the appeal is pending; it is equally possible of being construed as  referring  to  the  final  decree,  i.e.,  the appellate] decree.  Having regard to the fact that the right of pre-emption  is a weak right and is generally looked upon with distaste  and  because  the  High  court  has  taken  a particular view  of the  matter on  the interpretation  of a local enactment  [which is  no longer  in force]  we are not inclined to  take a  different view. Our disinclination also arises from  the fact  that the  said  Pre-emption  Act  was repealed as far back as 1968.      Sri Satish  Chandra place  strong reliance upon Section 10 of  the Madhya  Pradesh General Clause Act, 1957 which is in pari materia with Section 6 of the Central General Clause Act. The  applicability of  this section  was considered  by the Division  Bench of  the Madhya  Pradesh  High  Court  in Nirmala  Devi.   It  held,  after  referring  to  number  of decisions on the subject, That:      "A right  of pre-emption  is in the      nature of  an inchoate  right which      can be perfected only in accordance      with the procedure laid down in the      statue, i.e.,  could not be treated      as a  right vested in section 10 of      M.P. General   Clauses Act so as to      remain uneffected  by the repeal of      the Act...... As Pointed out above,      the  right   of  pre-emption  is  a      remedial right  or in other words a      right  to   take  advantage  of  an      enactment for  acquiring a right to      land, or  other property. The right      cannot  be   said  to   have   been      acquired or  accrued until a decree      is provisions of Section 10 of M.P.

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    General Clauses Act. The plaintiff-      enforce  a   right  of  pre-emption      after the repeal of the Pre-emption      Act."      The High Court also relied upon the language in Section 23 to  support the  above the  above conclusion.  We are not inclined to  take a  different view  even if one is possible regard fact that High Court has taken one possible view on a local law  which ha  been repealed  as  far  back  as  1968. Indeed, it  was not  even  a  law  made  by  Madhya  Pradesh Legislature but  a hang-over  from the   erstwhile  princely state                      of                       Gwalior.      The appeal accordingly fails and is dismissed. No order to as to costs.