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TMI Blog1962 (3) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... ty sold and foreclosed. (2) Any person who owns any immovable property adjoining the property sold or foreclosed or in case of transfer of tenancy rights, the land which is the subject of such rights. Provided that among the above mentioned classes the first in order will exclude the second and among persons of the same class, the nearer in relationship to the person whose property is sold or foreclosed will exclude the more remote. 3. We are in the present case concerned with the second clause by which a person owning immovable property adjoining the property sold or foreclosed is entitled to pre-empt subject to the order provided in the proviso. In this case, both the purchaser and the preemptors hold property adjoining the property sold, but as the preemptors were related to the vendor, while the purchaser was not, the suit was decreed in favour of the preemptors in view of the proviso. 4. The question therefore that arises is whether a right of pre-emption by vicinage offends Art. 19(1)(f). There has been divergence of opinion between various High Courts on this question. The High Courts of Rajasthan, Madhya Bharat and Hyderabad and the Judicial Commissioner, Vindh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prevalent in this area before the Rewa Act came into force and it was held reasonable by courts, that would not in our opinion be a decisive factor in considering whether the restrictions imposed by the Rewa Act are reasonable or not. We have to judge the reasonableness of the law in the context of the fundamental rights which were for the first time conferred by the Constitution on the people of this country and which were not there when the courts might have considered the reasonableness of the custom, if any in the context of things then prevalent. Nor do we think that the fact that the right of pre-emption may not be actually exercised in the case of even a large number of sales can have any bearing on the question whether the law imposing the restriction is reasonable or not. 6. Let us therefore see what the Rewa Act provides. Section 10, as we have pointed out, gives a right of pre-emption first to co-sharers and secondly to owners of adjoining property to which we shall refer hereafter as pre-emption by vicinage. We are not concerned in the present appeal with the case of co-sharers, with which we shall deal in a later part of the judgment. Ordinarily, if there was no law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement between the vendor and the vendee and there is no reason to hold that such an agreed price would be an unconscionable price. Nor do we think that the law of pre-emption in intended to provide for fixation of reasonable price by courts; therefore that can hardly be a reason to hold that it is a reasonable restriction in the interests of the general public on the right of the vendor under Art. 19(1)(f). We do not think that the restrictions placed by the law of pre-emption in a case based on vicinage have any effect on prices being reasonably fixed, and the main effect we can see is that the law may give rise to a crop of litigation. We cannot therefore see any advantage to the general public by such a law of pre-emption and in any case the disadvantage certainly overweighs the advantage that may result to a small section of the public. 7. Now let us look at the matter from the point of view of the vendee. He comes to an agreement with the vendor to purchase the property at a certain agreed price. Let us also assume that the vendor has given notice under s. 12 and no action has been taken by the preemptor under s. 13. Thereafter the vendee purchases the property and would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... damental rights guaranteed to the citizens of this country by the Constitution. In a society where certain classes were privileged and preferred to live in groups and there were discriminations, on grounds of religion, race and caste, there may have been some utility in allowing persons to prevent a stranger from acquiring property in an area which had been populated by a particular fraternity of class of people and in those times a right of pre-emption which would oust a stranger from the neighbourhood may have been tolerable or reasonable. But the Constitution now prohibits discrimination against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them under Art. 15 and guarantees a right to every citizen to acquire, hold and dispose of property, subject only to restrictions which may be reasonable and in the interests of the general public. Though therefore the ostensible reason for pre-emption may be vicinage, the real reason behind the law was to prevent a stranger from acquiring property in any area which had been populated by a particular fraternity or class of people. In effect, therefore, the law of pre-emption based on vicinage was really m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of the first clause only, which is not in dispute before us. 10. In this view of the matter C.A. 270 of 1955 must succeed. 11. We next come to C.A. 595 of 1960. This relates the Punjab Pre-emption Act, 1913 (Punj. 1 of 1913), (hereinafter referred to as the Punjab Act), as applied to the city of old Delhi. We are concerned with s. 16 of the Punjab Act, which deals with urban immovable property and is in these terms :- The right of pre-emption in respect of urban immovable property shall vest-/p firstly, in the co-shares in such property, if any; secondly, where the sale is of the site of the building or other structure, in the owners of such building or structure; thirdly, where the sale is of a property having a staircase common to other properties, in the owners of such properties; fourthly, where the sale is of a property having a common entrance from the street with other properties, in the owners of such properties; fifthly, where the sale is of a servient, property in the owners of the dominant property, and vice versa; sixthly, in the persons who own immovable property contiguous to the property sold. 12. The suit was brought by Nan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efly notice the grounds on which the two Punjab cases of 1954 and 1960 have held otherwise. In the 1954 case both Sections 15 and 16 of the Punjab Act were dealt with together. We are not here concerned with s. 15 and express no opinion with respect to it. As to s. 16, the reasons which impelled the learned Judges to hold that the provisions of s. 16 were constitutional were to reduce the changes of litigation and friction and to promote public order and domestic comfort, and to promote private and public decency and convenience . We are not able to understand how providing pre-emption on the ground of vicinage would carry out these objects, assuming their promotion is in the interests of the general public. Perhaps the reasons why these grounds were given in the 1954 case may be that the learned Judges were considering not merely pre-emption by vicinage but also with other grounds provided in s. 16. Whatever may be said about these reasons so far as other grounds, of pre-emption contained in s. 16 are concerned, these reasons have in our opinion no validity so far as pre-emption by vicinage is concerned. Turning now to the case of Sardha Ram A.I.R. 1960 Pun. 196, we may note that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use and s. 16 is concerned with urban property; for the introduction of an outsider in a residential house would lead to all kinds of complications. The advantages arising from such a law of pre-emption are clear and in our opinion outweigh the disadvantages which the vendor may suffer on account of his inability to sell the property to whomsoever he pleases. The vendee also cannot be said to suffer much by such a law because he is merely deprived of the right of owning an undivided share of the property. On the whole it seems to us that a right of pre-emption based on co-sharership is a reasonable restriction on the right to acquire, hold and dispose of property and is in the interests of the general public. 15. The same reasoning in our opinion will apply to the third ground, where the sale is of a property having a staircase common to other properties, in the owners of such properties . This ground stands on the same footing practically as the first ground relating to co-sharers, and for the same reason we hold that it is a reasonable restriction, and is in the interest of general public. 16. Turning now to the fourth ground, where the sale is of a property having a comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial property meant for private residence of individuals which has been exempted. In the circumstances we do not think that s. 16 can be said to violate Art. 14 of the Constitution in the light of s. 5 of the Punjab Act. In the result, the appeal fails and is hereby dismissed. The case will now go back for disposal according to law and we trust its decision will be expedited. 18. This brings us to C.A. 430 of 1958. In this case a pre-emption suit was brought by the respondents under Chap. XIV of the Berar Land Revenue Code, 1928 (hereinafter called the Code) with respect to survey No. 285, sub-division I. The preemptors hold sub-division 2 of survey No. 285 and based their claim on s. 174 of the Code. Section 174 lays down that the right of pre-emption thereunder shall arise only for unalienated lands held for agricultural purposes in favour of occupants in a survey number in respect of transfers of interests is that survey number. An occupant in a survey number has been defined in s. 173 to mean a person having the right of an occupant; whether in his sole right or jointly with others, in that survey number, or in any portion of it. But the right of pre-emption does not arise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rules framed thereunder, and it is open to amalgamate two or more adjoining sub-divisions in a survey number when they are held by the same occupants under the same tenure. On sub-division, the assessment of a survey number is distributed over its sub-divisions as agreed between the occupants. It is clear therefore that the assessment of a survey number is one and under s. 132 where there are more than one occupant of a survey number, all such occupants are jointly and severally liable to the payment of the land-revenue assessed on it. To begin with therefore the holders of a survey number are really co-sharers. For one reason or the other, if during the currency of the settlement co-sharers decide to sub-divide the number, the assessment is distributed amongst the sub-divisions and each sub-divisions then becomes a holding on being thus separately assessed to land-revenue. The right of pre-emption under Chap. XIV is confined only to the survey number which as we have pointed out earlier is one unit of assessment, the occupants of which are co-sharers and are jointly and severally responsible for the payment of land revenue. In effect, therefore where a survey number is sub-divide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion that the appeal must fail. 20. We therefore allow C.A. 270 of 1955 with costs and dismiss the suit for pre-emption. No order as to costs in this appeal C.A. 595 of 1960 and C.A. 430 of 1958 are hereby dismissed with costs. A.K. Sarkar, J. 21. These three appeals arise out of suits for pre-emption of properties. Broadly put, the question in each appeal is whether the law creating the right of pre-emption with which it is concerned, is void as offending Art. 19(1)(f) of the Constitution. One of the appeals involves also the question whether the law is invalid as offending Art. 14of the Constitution. 22. The right of pre-emption challenged is in each case based on a statute. So there are three different statutes to deal with. Though some of the features of these statutes are substantially common, there are some others which are not so. Each appeal has therefore to be considered independently in reference to its own statute. It may however be observed here that these statutes are all pre-Constitution laws but the sale on which the right of pre-emption was claimed had taken place in each case after the Constitution had come into force. 23. We shall first take Civ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to Shri Audh Behari Singh v. Gajadhar Jaipuria [1955]1SCR70 , where it is stated that In our opinion the law of pre-emption creates a right which attaches to the property and on that footing only it can be enforced against the purchaser . It was said that since the right of pre-emption is attached to property it is an incident on which property is held and therefore it is not a restriction on the right to hold property. On behalf of the purchaser it was said that even so it would be a restriction because a right to hold property existed independently of the law of pre-emption and this law effected adversely the right to property. As at present advised, we are unable to say that the contention of the purchaser is entirely without foundation. In the view however that we have taken of these cases, we think it unnecessary to pronounce finally on the point so raised. We shall proceed on the basis that even if the law of pre-emption creates a right which attached to property, it may amount to a restriction on the right guaranteed by Art. 19(1)(f) 28. Article 19(1)(f) of the Constitution states that every citizen shall have the right to acquire, hold and dispose of property . Claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... custom must be reasonable. If it is against reason it has no force in law. : see Halsbury's Laws of England, 3rd ed. vol. 11 p. 162. In Tyson v. Smith (1938) 9 Ad. Ed. 406, Tindal, C.J., observed Nor is a custom unreasonable because it is prejudicial to the interests of a private man, if it be for the benefit of the commonwealth . These words, it will be noticed, are very near to the words used in clause (5) of Art. 19. We then come to this : before the Constitution various courts in India held the customary right of pre-emption on the ground of vicinage to be a reasonable custom, that is, in the opinion of the courts the restriction imposed by it was a reasonable restriction. We are unable to discover why after the Constitution, the law imposing a similar restriction, customary or otherwise, should be held to be unreasonable. There has not been any such vast change in the social or economic structure of the country which would justify the view that a restriction which was reasonable before January 26, 1950, has since then become unreasonable. It is true that courts in Madras refused to apply the Mahomedan Law of pre-emption as a matter of justice, equity and good conscienc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and which may not have that value for the richer man. It was contended that the law of pre-emption had the effect of amassing wealth in one ownership. For the reasons just mentioned, we think it really prevents the richer man from acquiring properties when it is to the advantage of a poorer man to have the same. In so far as the law prevents a vendor from selling his property at an exorbitant price it cannot, in our view, be said to impose an unreasonable restriction on him. 34. Then, as we have said, the law of pre-emption prevents a vendor from selling his property to anyone he likes. We cannot imagine this to be a great deprivation. Really, the freedom to sell to anyone has perhaps no more value than a sentimental one. As against this the advantage accruing to the neighbouring owner is that he is able to enlarge the property previously held by him. We think that balancing the two sides the scale dips much in favour of the preemptor. There are also other reasons for this view which we shall presently state. 35. It is said that one of the disadvantages of the law of pre-emption is that it gives rise to a lot of litigation. We do not think that this is a legitimate argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the consolidation of holdings with the disadvantages resulting to a stranger by the restriction imposed on his right of acquiring that property, there is no doubt that the disadvantages are of small consequence. The advantages arising from the consolidation of agricultural holdings will be discussed in the last case that we will consider and which comes from Berar. 38. The Rewa Act however is not confined to agricultural land. It creates a right of pre-emption in other property also. Let us consider the case of house property in a town or village. In a town or village the Indian way of life has been to live in compact communities. There is no doubt that such living has great advantages. It is true that due to economic reasons it is not always possible nowadays for many to have the comfort of living in compact communities. But the fact that economic conditions are breaking up compact communities does not show that living in such communities has not its advantages. It seems to us that such living would help to maintain the homogeneity, comfort and peace of the people. It is common human experience that property leads to disputes concerning boundaries, easement and concerning di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said that the privacy of the home is a thing which is of no value nowadays. It is this that the law of pre-emption will protect and therefore be of advantage to the community. We think it wrong to imagine that privacy of a home is of value only to the people observing purdah. 41. Then it is said that living in compact communities has also disappeared and people now live in flats. But we do not think that it can be suggested that living in communities has not its advantages or living in flats is an ideal system. There are therefore no arguments against the view that living in compact and homogeneous communities is still desirable and has still its advantages which perhaps will always remain. 42. It is also said that the restriction imposed by the law of pre-emption is unreasonable because it encourages discrimination on the ground of religion, race and caste and this is what Art. 15 of the Constitution forbids. We do not think that it is a reasonable reading of the Constitution to say that it forbids people of one race, religion or caste from living together. Furthermore, compact communities are not always of the same race, religion or caste. The advantage is not due to ide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wnership or vicinage. It is a corollary to the main right. If the main right is good, a provision enacted to prevent its being defeated would equally be good. 45. The result is that s. 10 of the Rewa Act which gives the right of pre-emption on the ground of vicinage must be declared to be a perfectly valid statutory provision which does not offend Art. 19(1)(f) of the Constitution and so is the proviso to that section which is really a part of it. That disposes of Civil Appeal No. 270 of 1955. We would therefore dismiss the appeal. 46. We next come to Civil Appeal No. 595 of 1960 which concerns the Punjab Pre-emption Act of 1913. The property involved in this case is a house situated in the city of Old Delhi. Section 16 of the Punjab Act which governs the property in dispute, is in these terms : S. 16. The right of pre-emption in respect of urban immovable property shall vest, - firstly, in the co-sharers in such property, if any; secondly, where the sale is of the site of the building or other structure, in the owners of such building or structure; thirdly, where the sale is of a property having a staircase common to other properties, in the owners of such proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strongly to the present case because here in the very area with which we are concerned that custom did exist. 51. The right of pre-emption based on vicinage mentioned in the sixth ground in s. 16 has already been dealt with by us in the Rewa case. For the reasons stated, there, we hold this provision in s. 16 to be a valid piece of legislation. 52. We have now to deal with the other grounds in s. 16 referred to earlier. The first confers a right of pre-emption on a co-sharer in a property. We feel no doubt that a law giving such a right imposes a reasonable restriction on the right conferred by Art. 19(1)(f). If an outsider is introduced as a co-sharer in a property, that is likely to make common management inconvenient and thereby destroy the benefits of ownership of the property to a large extent. Property cannot be managed profitably unless one policy is followed. If there are more than one owner of a property, it is essential for the profitable enjoyment of it that they should be able to work in unison. Therefore if by the operation of the law of pre-emption based on co-ownership the property eventually comes to be vested in a single hand that would be a great advantage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... common to all. In order that this ground may apply, there has to be a common entrance from such a street to a number of properties. This ground apparently contemplates a case of a passage leading from a public street which is common to all the owners of properties situate on that passage. This ground therefore deals with owners of properties who have to share a common passage. People living in these houses would naturally from a very compact community. Indeed very often they would be living like relatives or members of a family. A law which gives them a right to buy one of these properties when it is sold to a stranger cannot be said to impose an unreasonable restriction on anyone. As in the last case, the advantage accruing from such a law to the person desiring to pre-empt would far outweigh the disadvantage occasioned either to the vendor or the purchaser. 54. The learned counsel for the appellant referred to various Acts which have gradually abolished the right of pre-emption. He pointed out that by Act X of 1960 of the Punjab Legislature s. 16 has in fact been repealed as a whole and has been substituted by a provision creating a right only in a tenant to pre-empt the prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and mix with strangers. One has to welcome and associate with, completely unknown persons who do not live with the persons doing the business. In order that business premises may cater to the needs of the community for which they exist, they have to be open to all. To such premises no question of any advantage flowing from community living arises. They are generally properties of great value. It seems to us that they can therefore be put in a separate class. They do not need the protection of the law of pre-emption in the same way as other properties would do. For these reasons we do not think that s. 16 can be said to violate Art. 14 of the Constitution. 56. In the result we hold that the first, third, fourth and sixth grounds, on which a right of pre-emption is based by s. 16 of the Punjab Act, are valid pieces of legislation. We would therefore dismiss this appeal with costs. 57. We come now to the last appeal, that is, Civil Appeal No. 430 of 1958. It concerns the Berar Land Revenue Code of 1928. Chapter 14 of this Code creates certain rights of pre-emption to one of which we shall presently refer. That chapter consists of Sections 173 to 187. This chapter in the Code, l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it is only against such an occupant that a right of pre-emption is created by that Code. He therefore contended that the right to property being created on the term that it would be liable to pre-emption, it was not a case of restriction but one of the nature of the property itself and therefore no question of infringement of Art. 19(1)(f) arises by the exercise of that right. As in our opinion the respondents should succeed in this appeal for the reasons to be presently discussed, we think it unnecessary to pronounce on this contention of Mr. Sovani. We have besides no materials to show as to when the right of ownership in the property involved in this case was first created. It may have been created under a law other than the Code or its predecessors. In that case Mr. Sovani's argument would lose its principle force. Further we have not all the earlier land laws of Berar before us. It would not be right on the materials now before us to investigate and pronounce on the question raised by Mr. Sovani. 60. It is clear from what we have earlier stated that the lands included in one survey-number are contiguous. It is only when an interest in such lands is sold that under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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