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CASE NO.: Appeal (civil)  5947 of 2002

PETITIONER: Lachhman Dass

RESPONDENT: Jagat Ram & Ors

DATE OF JUDGMENT: 20/02/2007

BENCH: S.B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T

S.B. Sinha, J.

       Interpretation of the provisions of the Punjab Pre-emption Act, 1913  (’the Act’, for short) is in question in this appeal which arises out of a  judgment and order dated 30th May, 2001 passed by the High Court of  Himachal Pradesh at Shimla in Regular Second Appeal No.38 of 1998  dismissing the appeal arising from a judgment and decree dated 15.11.1997  passed by the Additional District Judge (I), Una in Civil Appeal  No.26/92/91affirming a judgment and decree dated 7.10.1991 passed by the  Sub-Judge, 1st Class, Amb in Civil Suit No.211/85 RBT No.635/89  dismissing the Civil Suit filed by the appellant herein.   

       The fact of the matter is under  :

       Respondent No.9-Desh Raj was owner of the suit property.  Appellant  (plaintiff) was a tenant in respect thereof.  By reason of a deed of sale dated  27.4.1982, Desh Raj transferred the suit land in favour of Jagat Ram  (Respondent No.1-Defendant No.2) and Gurbaksh Kaur, wife of Jagat Ram  (Respondent No.2-Defendant No.2).  Jagat Ram and Gurbaksh Kaur, in turn,  by a registered deed of sale dated 11.10.1982 transferred their right and  interest therein in favour of the appellant.  Respondent No.8-Chander Bala is  the daughter of Respondent No.9-Desh Raj.  Claiming a right of pre-emption  in terms of the Act, she filed a suit for pre-emption impleading only the  respondent Nos. 1 and 2 therein.  A compromise was entered into by and  between the parties in the said proceedings.  A consent decree was passed on  the basis thereof by the learned Subordinate Judge, stating :

"The case was taken up on 13.6.1983 on which date both  the parties, conceded the rights of each other.  The  Defendant conceded that the plaintiff has a superior right  of preemption.  The Plaintiff admitted that the suit land  was actually sold for Rs.30,000/- by the vendor the  Defendant.  The counsel for the Plaintiff paid Rs.24,000/-  to the Defendant in the court and the remaining  Rs.6,000/- has already been deposited in the court as 1/5th  of the preemption amount."

       Allegedly, she was put in possession of the said land in purported  execution of the said decree of pre-emption.  A deed of gift was executed by  Defendant-Respondent No.1 on 24.1.1984 in favour of Respondent Nos.3 to  7 herein, who are sons and daughters of Respondent Nos.1 and 2.  They  applied for mutation of their names, which was granted in their favour by an  order dated 28.1.1985.  Assailing the said order of mutation as also the said  consent decree, a suit was filed by the appellant herein.  The said suit was  dismissed.  As indicated hereinbefore, the first appeal as also the second

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appeal preferred thereagainst have also been dismissed.

       The original Defendant Nos. 3 to 7 only are before us.

       Mr. Manoj Swarup, learned counsel appearing on behalf of the  appellant would submit that as the appellant was not impleaded as a party in  the said suit, the decree passed therein was not binding on him.  In any  event, the learned counsel would contend that collusion on the part of  Defendant Nos.1 and 2 and Defendant Nos.8 and 9 is evident from the fact  that immediately after passing of the decree in the said suit, a deed of gift  was executed, the consent decree should have been set aside.                    The Punjab Pre-emption Act confers a special right of pre-emption on  the persons specified therein.  Right of pre-emption has been defined in  Section 4 of the Act to mean the right of a person to acquire agricultural land  or village immovable property or urban immovable property in preference to  other persons, and it arises in respect of such land only in the case of sales  and in respect of such property only in the case of sales or of fore-closures of  the right to redeem such property.   

       Section 5 of the Act provides that there would be no right of pre- emption in certain cases.

       Section 6 of the Act states that a right of pre-emption exists in respect  of village immovable property and in respect of agricultural land, but every  such right shall be subject to all the provisions and limitations contained  therein.   

       Section 10 of the Act prohibits a party to alienate any property   claiming  pre-emption.   

       Section 19 of the Act occurring in Chapter IV thereof provides for the  procedure to claim pre-emption in the following terms :

"19.    Notice to pre-emptors.\026 When any person  proposes to sell any agricultural land or village  immovable property or urban immovable property or to  foreclose the right to redeem any village immovable  property or urban immovable property, in respect of  which any persons have a right of pre-emption, he may  give notice to all such persons of the price at which he is  willing to sell such land or property or of the amount due  in respect of the mortgage, as the case may be.

       Such notice shall be given through any Court  within the local limits of whose jurisdiction such land or  property or any part thereof is situate, and shall be  deemed sufficiently given if it be stuck up on the chaupal  or other public place of the village, town or place in  which the land or property is situate."

       Section 21 provides for suits for pre-emption.   

       The constitutionality of the provisions of the said Act came up for  consideration before a Constitution Bench of this Court in Atam Prakash  vs. State of Haryana & Ors. [(1986) 2 SCC 249], wherein Chinnappa  Reddy, J. held :

       "In the first case, (Bhau Ram case), the right of  pre-emption given to co-sharers was held to be a  reasonable restriction on the right to hold, acquire or  dispose of property conferred by Article 19(1)(f) of the  Constitution.  What has been said there to uphold he right  of pre-emption granted to a co-sharer as a reasonable  restriction on the right to property applies with the same

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force to justify the classification of co-sharers as a class  by themselves for the purpose of vesting in them the right  of pre-emption.  We do not think that it is necessary to  restate what has been said in that case.  We endorse the  views expressed therein.  The right of pre-emption vested  in a tenant can also be easily sustained.  There can be no  denying that the movement of all land reform legislations  has been towards enabling the tiller of the soil to obtain  proprietory right in the soil so that he may not be  disturbed from possession of the land and deprived of his  livelihood by a superior proprietor.  The right of pre- emption in favour of a tenant granted by the Act is only  another instance of a legislation aimed at protecting the  tenant.  There can be no doubt that tenants form a distinct  class by themselves and the right of pre-emption granted  in their favour is reasonable and in the public interest.   We are, therefore, of the view that clause ’fourthly’ of  Section 15(1)(a), clauses ’fourthly and fifthly’ of Section  15(1)(b) and clause ’fourthly’ of Section 15(1)(c) are  valid and do not infringe either Article 14 or 15 of the  Constitution."

       While upholding the validity of the provisions of the special Act, this  Court struck down the right of pre-emption based on consanguinity, stating :                  "We are thus unable to find any justification for  the classification contained in Section 15 of the Punjab  Pre-emption Act of the kinsfolk entitled to pre-emption.   The right of pre-emption based on consanguinity is a  relic of the feudal past.  It is totally inconsistent with the  constitutional scheme.  It is inconsistent with modern  ideas.  The reasons which justified its recognition quarter  of a century ago, namely, the preservation of the integrity  of rural society, the unity of family life and the agnatic  theory of succession are today irrelevant.  The list of  kinsfolk mentioned as entitled to pre-emption is  intrinsically defective and self-contradictory.  There is,  therefore, no reasonable classification and clauses ’First’,  ’Secondly’ and ’Thirdly’ of Section 15(1)(a), ’First’,  ’Secondly’ and ’Thirdly’ of Section 15(1)(b), clauses  ’First’, ’Secondly’ and ’Thirdly’ of Section 15(1)(c) and  the whole of Section 15(2) are, therefore, declared ultra  vires the Constitution."

       Respondent No.9, thereafter, could not have claimed a right of pre- emption as a daughter of respondent No.8.   

       The fact that Appellant has purchased the suit premises was known to  her.  Appellant was in possession of the land.  The execution of a registered  deed of sale shall also be treated as a notice in terms of Section 3 of the  Transfer of Property Act, 1882, which is in the following terms :          "........."a person is said to have notice" of a fact when he  actually knows that fact, or when, but for wilful  abstention from an enquiry or search which he ought to  have made, or gross negligence, he would have known it.

       Explanaion I. \026 Where any transaction relating to  immovable property is required by law to be and has  been effected by a registered instrument, any person  acquiring such property or any part of, or share or interest  in, such property shall be deemed to have notice of such  instrument as from the date of registration or, where the  property is not all situated in one sub-district, or where  the registered instrument has been registered under sub-

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section (2) of section 30 of the Indian Registration Act,  1908 (16 of 1908), from the earliest date on which any  memorandum of such registered instrument has been  filed by any Sub-Registrar within whose sub-district any  part of the property which is being acquired, or of the  property wherein a share or interest is being acquired, is  situated:

       Provided that \026  

       (1)     the instrument has been registered and its  registration completed in the manner prescribed by the  Indian Registration Act, 1908 (16 of 1908), and the rules  made thereunder,

       (2)     the instrument or memorandum has been  duly entered or filed, as the case may be, in books kept  under Section 51 of that Act, and

       (3)     the particulars regarding the transaction to  which the instrument relates have been correctly entered  in the indexes kept under section 55 of that Act.

       Explanation II. \026 Any person acquiring any  immovable property or any share or interest in any such  property shall be deemed to have notice of the title, if  any, of any person who is for the time being in actual  possession thereof."

       Despite such notice, the appellant was not impleaded as a party.  His  right, therefore, to own and possess the suit land could not have been taken  away without giving him an opportunity of hearing in a matter of this nature.   To hold property is a constitutional right in terms of Article 300-A of the  Constitution of India.  It is also a human right.  Right to hold property,  therefore, cannot be taken away except in accordance with the provisions of  a statute.  If a superior right to hold a property is claimed, the procedures  therefor must be complied with.  The conditions precedent therefor must be  satisfied.  Even otherwise, the right of pre-emption is a very weak right,  although it is a statutory right.  The Court, while granting a relief in favour  of a preemptor, must bear it in mind about the character of the right, vis-‘- vis, the constitutional and human right of the owner thereof.  

       The manner in which the purported consent decree was entered into  by and between Defendant No.9 on the other hand and Defendant Nos. 1 and  2 is tell tale.  Defendant Nos.1 and 2 having transferred their right and  interest, could not have conveyed any right in the property of Defendant  No.9.  No such right existed in them.

       In the consent decree no finding was arrived at as to on what basis the  right of Defendant-Respondent No.9 was considered to be a superior right of  pre-emption. Defendant No.9 out of the total consideration amount of  Rs.30,000/-, deposited only 1/5th thereof, i.e., Rs.6,000/- in the Court.   Respondent Nos.1 and 2 neither said to have claimed the said amount nor  the rest of the amount of Rs.24,000/- could have been paid in their favour by  Defendant No.9.

       If the Defendant Nos. 1 and 2 only could not have accepted the said  amount as a valid consideration of passing of a decree of pre-emption in  favour of the Respondent No.9; the purported consent decree, in our opinion,  was void ab initio.  Moreover, in the aforementioned facts and circumstances  of this case, the appellant was a necessary party therein.  No decree,  therefore, could have been passed in his absence.  The parties to the said suit  and, in particular, Defendant-Respondent Nos. 1 and 2, therefore, by  suppression of material facts committed a fraud on the Court in obtaining the  said decree.  It may be true that collusion between Respondent No.9 and

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Defendant Nos.1 and 2 was required to be specifically pleaded, but in this  case collusion between them is apparent on the face of the records.  The  circumstances obtaining in the case lead to only one conclusion that the  parties were in collusion with each other for the purpose of obtaining the  said decree.            Mrs. Rekha Palli, learned counsel for the respondent, therefore, may  not be correct in contending that the appellant was not a necessary party.   The contention  of Mrs. Palli that even if the defendants were impleaded as  party, he did not have any other defence,  does not find favour with us.  

       We cannot speculate in regard to the nature of defence which could be raised in the suit.  In any event in a case of this nature, where the appellant  was a necessary party, in his absence the suit could not proceed and,  therefore, the said question does not arise for consideration in this case.  

       In Shyam Sunder & Ors. vs. Ram Kumar & Anr. [(2001) 8 SCC  24], this Court opined :

"....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  characterized 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...."          

       We have noticed hereinbefore that plaintiff was not a co-sharer of her  father.  She could not have claimed a right of pre-emption on the basis of  consanguinity.  Had, therefore, an opportunity of hearing been given, the  plaintiff-appellant could have shown that she did not have any such right.

       The impugned judgment cannot be sustained.  It is  set aside  accordingly.  The appeal is allowed.  Respondents shall bear the cost of the  appellant.  Advocate’s fee is assessed at Rs.5,000/-.