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Issues Involved:
1. Right of pre-emption under the Berar Land Revenue Code. 2. Interpretation of the term "sale" under the Transfer of Property Act and its application to pre-emption rights. 3. Allegations of fraud to defeat pre-emption rights. 4. Validity of the suit based on the timing of the alleged sale. Issue-wise Detailed Analysis: 1. Right of Pre-emption under the Berar Land Revenue Code: The primary issue was whether the respondent had a right of pre-emption under the Berar Land Revenue Code. The appellant argued that the right of pre-emption did not arise as the sale was not completed until February 1, 1944. The High Court held that the transaction constituted a sale subject to pre-emption, and the failure to execute and register a sale deed was a subterfuge to defeat the right of pre-emption. The Supreme Court noted that the Mohammedan rule of pre-emption was not well-founded in Berar and that the statutory right of pre-emption under the Berar Land Revenue Code extended beyond the Mohammedan law. However, the Supreme Court concluded that the right of pre-emption could not be exercised until a valid sale had been completed. 2. Interpretation of the Term "Sale" under the Transfer of Property Act: The High Court interpreted the term "sale" in section 176 of the Berar Land Revenue Code to have a wider connotation than under section 54 of the Transfer of Property Act. The Supreme Court, however, emphasized that under section 54, a sale of tangible immovable property worth Rs. 100 or more must be made by a registered instrument. The Supreme Court referred to the Privy Council's decision, which held that no title passes on a sale except as provided in section 54 of the Transfer of Property Act. Hence, the transaction in question, being unregistered, did not constitute a valid sale that could trigger the right of pre-emption. 3. Allegations of Fraud to Defeat Pre-emption Rights: The respondent alleged that the appellant's actions were fraudulent and intended to defeat the right of pre-emption. The Supreme Court observed that the right to pre-empt is not favored by courts as it derogates the owner's right to alienate property. It is neither illegal nor fraudulent for parties to avoid pre-emption claims by legitimate means. The Court cited its previous judgment in Bishan Singh v. Khazan Singh, stating that the right of pre-emption is weak and can be defeated by lawful methods. The Court concluded that the appellant's actions did not constitute fraud as the sale was not completed until February 1, 1944. 4. Validity of the Suit Based on the Timing of the Alleged Sale: The respondent filed the suit for pre-emption based on transactions dated April 10, 1943, and April 24, 1943. The Supreme Court noted that these transactions were mere contracts of sale and did not create any interest in the property. The right of pre-emption could only be exercised after the completion of a valid sale, which occurred on February 1, 1944. Since the suit was based on an invalid cause of action, the Supreme Court held that the suit was not maintainable. Conclusion: The Supreme Court allowed the appeal, set aside the judgment and decree of the High Court, and dismissed the suit with costs throughout. The Court emphasized that the right of pre-emption is a weak right and cannot be exercised until a valid sale is completed. The Court also reiterated that avoiding a pre-emption claim by lawful means does not constitute fraud.
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