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TMI Blog2020 (10) TMI 1362X X X X Extracts X X X X X X X X Extracts X X X X ..... f the 1966 Act is not in dispute in this proceeding. In the suit out of which this appeal arises, the Plaintiff's suit for pre-emption over a transaction effected on 21st January 1974 was resisted on the ground of being barred by limitation. 2. In order to determine the aforesaid question of law framed by this Court in terms of the order dated 05.01.2016, it is necessary to discuss the nature of the right of pre-emption. In this behalf, we had discussed the right of pre-emption in a recent judgment in Barasat Eye Hospital and Ors. v. Kaustabh Mondal. The said judgment, authored by one of us (Sanjay Kishan Kaul, J.), in its initial paragraph itself discusses this aspect and it would suffice to quote the same. 1. The right of pre-emption holds its origination to the advent of the Mohammedan rule, based on customs which came to be accepted in various courts largely located in the north of India. This law is stated to be largely absent in the south of India on account of the fact that it never formed a part of Hindu law in respect of property. However, this law came to be incorporated in various statutes, both, prior to the Constitution of India (for short 'the Constitution& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, in place of an original vendee and the pre-emptor is bound to show not only that his right is as good as that of that vendee, but that it is superior to that of the vendee. Such superior right has to subsist at the time when the pre-emptor exercises his right. The position is thereafter summarized in the following terms: 11. .....(1) The right of pre-emption is not a right to the thing sold but a right to the offer of a thing about to be sold. This right is called the primary or inherent right. (2) The pre-emptor has a secondary right or a remedial right to follow the thing sold. (3) It is a right of substitution but not of re-purchase i.e., the pre-emptor takes the entire bargain and steps into the shoes of the original vendee. (4) It is a right to acquire the whole of the property sold and not a share of the property sold. (5) Preference being the essence of the right, the Plaintiff must have a superior right to that of the vendee or the person substituted in his place. (6) The right being a very weak right, it can be defeated by all legitimate methods, such as the vendee allowing the claimant of a superior or equal right being substituted in his place. On having set down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal was preferred against this order and during the pendency of the appeal an application was filed to amend the written statement inter alia raising the plea that there were even earlier sale deeds of 1945, 1946 and 1966 where the Respondents 5 and 6 herein had purchased the property vide sale deed dated 5.11.1966. The earlier sale deeds not having been challenged, the right of pre-emption could not be exercised and was barred by time. This resulted in four additional issues being framed arising from the plea of limitation and the matter was remitted to the Trial Court in terms of the judgment dated 22.5.1987 of the first appellate Court. 5. The Trial Court gave its consideration on the additional issues and took note of the fact that the earlier two sale deeds were even prior to the coming into force of the said Act. The court, however, noticed that even prior to the coming into force of the said Act, laws of pre-emption did exist in Ajmer. The sale deed dated 5.11.1966 came into existence after the said Act came into force. It was opined by judgment dated 1.2.1988 that without challenging that sale deed, the suit would not be maintainable and would be barred by limitation rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iming any right of pre-emption of subsequent sale. 9. In support of their contention, learned Counsel referred to the following judgments: (a) Prahlad Kumar v. Kishan Chand and Ors. 2009 (3) RLW 2441 This judgment of the Rajasthan High Court, while rejecting the right of pre-emption, based it on two aspects. The first was a factual one that it was not a case of sharing a common property. The relevant portion is the second aspect where it was held even if the right is presumed to have been established, though not established in that case, the Plaintiff was estopped from claiming his right of pre-emption as he had waived his right when the property was sold at an earlier date and pre-emption was not claimed then. (b) Mangti Ram v. Onkar Sahai (1994) 1 RLW 55 In this case, the right of pre-emption was held to have been given up on account of an earlier compromise deed to which the Plaintiff had been a party. (c) Kutina Bibi and Anr. v. Baikuntha Chandra Dutta and Ors.2 This judgment once again dealt with the plea of pre-emption against a subsequent sale, where vide an earlier sale deed of 1950, the Plaintiff-cosharer's share had been sold by her son and thus, it was h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, it was contended that the seller is required to inform all persons as to the price he is proposing to sell at and thus the language of the provision is clear that it applies to all such incidents of sale. Thus, it was pleaded that it cannot be said that if such a right is not exercised, it would allow foreclosure for any subsequent sale, since there is no provision in the said Act, prohibiting the right of pre-emption if the right is not exercised. It was also contended that the question of waiver is set out in Section 9 of the said Act, which does not provide for an eventuality that the right of pre-emption would not be applicable for a subsequent sale. The last aspect argued was that this right is based on substitution in place of the vendee on payment of the price and it does not challenge the sale but seeks substitution of the Plaintiff in place of the vendee. There was, thus, no need to challenge the earlier sales and not challenging the earlier sales would not amount to waiver. 11. A reference was made to the following judgments: (i) Bishan Singh and Ors. v. Khazan Singh and Anr. AIR 1958 SC 838 The reference to the aforesaid judgment has been made in the context of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me for each sale transaction. In the case of Ghanshyam (supra), finding of the High Court was that the Plaintiffs claiming pre-emption had waived their rights. In the case of Rukmani Devi (supra), where the Plaintiff raised the plea of preemption on second sale transaction, evidence was led by the Defendant that the same Plaintiff had earlier refused to purchase the subject property and had on the other hand participated in the sale process. In the case of Prahlad Kumar (supra), it was found that the Plaintiff himself had waived his right of pre-emption in respect of an earlier sale transaction involving the same property. Thus, to this extent, the view taken in the impugned order seems to charter a new course. The view of the Assam High Court in Kutina Bibi (supra) was consistently followed by the Rajasthan High Court. 14. In order to now appreciate the controversy, as there appears to be no other view of this Court on this aspect, we would first turn to the said Act itself. Right to pre-emption is defined in Section 3 of the Act as under: Section 3: "Right of pre-emption" defined The "right of pre-emption" is the right accruing Under Section 4 of this Act, upon a transfer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one year from the date on which,-- (a) in the case of a sale made without a registered sale-deed, the purchaser takes under the sale physical possession of any part of the property sold, and (b) in the case of a foreclosure, the final decree for foreclosure is passed. (2) The period of limitation for a suit to enforce a right of pre-emption which has accrued before the commencement of this Act shall, notwithstanding anything contained in the said Limitation Act, in no case exceed one year from the commencement of this Act. 15. In view of the fact that since Section 21 in turn refers to Article 97 of the First Schedule of the Limitation Act, 1963 it would be appropriate to set forth the same as under. 97. To enforce a right of pre-emption whether the right is founded on law or general usage or on special contract. One year. When the purchaser takes under the sale sought to be impeached, physical possession of the whole or part of the property sold, or, where the subject-matter of the sale does not admit of physical possession of the whole or part of the property, when the instrument of sale is registered. 16. The question has to be, thus, analysed in the context of a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said provision does not reveal that such right can re-arise to the person who waives his right of pre-emption in an earlier transaction. To do so would mean that a person, whether not having the means or for any other reason, does not exercise the right of preemption and yet he, even after decades, can exercise such a right. This would create, if one may say, some sort of a cloud on a title and uncertainty as a subsequent purchaser would not know, when he wants to sell the property, whether he can complete the transaction or not or whether a co-sharer will jump into the scene. This is not contemplated in the 1966 Act. This is bound to have an effect on the price offered by a purchaser at that time because he would have an impression of uncertainty about the proposed transaction. 19. We are in agreement with the consistent view taken in the judgments earlier of the Rajasthan High Court. So far as the case of Kutina Bibi (supra) is concerned, the factual basis of that decision does not fit with the legal controversy involved in this proceeding. In that case, by a previous transaction the entire land had been sold. It was held in that perspective, that the Plaintiff's right as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the right of pre-emption can be enforced for an indefinite number of transactions or it is exercisable only the first time. We opine that it is only exercisable for the first time when the cause of such a right arises, in a situation where the Plaintiff-pre-emptor chooses to waive such right after the 1966 Act becoming operational. Section 9 of the said Act operates as a bar on his exercising such right on a subsequent transaction relating to the same immovable property. We also wonder what really remains of this right of pre-emption after so many years in the facts of this case when the purchaser has been enjoying it for more than four decades!
23. The result is the impugned order is set aside and the order of the trial court dated 01.02.1988 and the first appellate court dated 30.03.1989 are upheld. As the original Plaintiff has not challenged the sale effected by him on 5th November, 1966, the suit of Respondent No. 1 (original Plaintiff, now represented by his legal representatives) is thus barred by limitation. This puts an end to the legal battle which began 45 years ago!
24. The appeal, is accordingly, allowed leaving the parties to bear their own costs. X X X X Extracts X X X X X X X X Extracts X X X X
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