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1949 DIGILAW 37 (ALL)

Muneshwar Bux Singh v. Ram Narain

1949-02-18

body1949
JUDGMENT 1. These three appeals of which one No. 93 of 1945 is preferred against the appellate decree passed by the District Judge of Sitapur, and the other two, Nos. 326 and 327 of 1946, against the decrees passed by the District Judge of Rae Bareli raise same interesting question of law : Whether a transfer effected by a Collector under S. 28, Encumbered Estates Act, read with R. 47-A of the Rules framed by the Provincial Government under that Act gives rise to a right of pre-emption as contemplated by the Avadh Laws Act, chapter II ? This was the sole question on which arguments were addressed to us in these appeals. The facts so far as they are necessary for the determination of the appeals may be shortly stated : 2. In the suit out of which appeal NO. 93 arises, a decree for Rs. 8400 was passed in favour of Lala Ram Narain under S. 14, Encumbered Estates Act, by the Special Judge, Sitapur, against Raghuraj Singh, husband of respondent 2 Keshori Devi. In due course the decree was transferred to the Collector for execution. On 4th October 1943, the Sub-divisional Officer, Misrikh, transferred the property in suit to Lala Ram Narain in lieu of Rs. 7195. He purported to act under S. 28, Encumbered Estates Act. Thakur Muneshwar Bakhsh Singh, who is a co-sharer in the mahals wherein the properties in dispute lie, and is the consanguine brother of Raghuraj Singh, instituted a suit for pre-emption of this sale. By the time the suit was brought Raghuraj Singh was dead and accordingly Lala Ram Narain and Raghuraj Singh's widow Mt. Keshori Devi were impleaded as defendants. The trial Court among others framed an issue which ran as follows : Did the transfer made by the liquidating officers tinder the provisions of the U.P. Encumbered Estates Act give rise to a right of pre-emption ? It answered the issue in the negative and dismissed the suit. There was an appeal to the District Judge of Sitapur which was unsuccessful. 3. Similarly in a proceeding pending before the Special Judge of Basti, a decree for money under S. 14 of the Act was passed against B. Pateshawari Prasad Pal Singh and Babu Lal Ji Singh who had made an application under S. 4 of the Act. There was an appeal to the District Judge of Sitapur which was unsuccessful. 3. Similarly in a proceeding pending before the Special Judge of Basti, a decree for money under S. 14 of the Act was passed against B. Pateshawari Prasad Pal Singh and Babu Lal Ji Singh who had made an application under S. 4 of the Act. The decree was passed in favour of Shemsher Bahadur Singh, Chandrapal and Ban Bahadur Singh. In due course the decree was transferred to the Collector for execution. Acting under S. 28, Encumbered Estates Act, the Collector on 28th October 1944, executed a deed of sale in respect on certain properties in the district of Partabgarh in favour of the above named decree-holders. Some of the items of the properties sold lay in two villages, Sunderpur and Kundra Madhopur. Pt. Ram Harakh claiming to be a co-sharer in Sunderpur instituted a suit for pre-emption in respect of the property which lay in that district. Seth Ram Prasad, who is another co-sharer in Kundra Madhopur, instituted a similar suit for pre-emption with respect to the property in that village. The learned Civil Judge decreed both the suits. The vendees, Shamsher Bahadur Singh and others filed an appeal in each case. Both the appeals were dismissed by the learned District Judge of Rae Bareli. Thus we have three appeals before us, one against the decree passed by the learned District Judge of Sitapur preferred by Thakur Muneshwar Bakhsh Singh who claims to be entitled to pre-emption. The other two appeals which relate to cases that arise in Partabgarh district are preferred by the vendees against whom the claims for pre-emption have been decreed. 4. The sole question which was argued in all the three appeals has already been set out by us in the opening portion of the judgment. It was contended by the learned counsel for the pre-emptors that Chapter II, Avadh Laws Act, confers a statutory right of pre-emption upon persons mentioned in S. 9 of the Act which must be given effect to unless it is taken away by express words or necessary intendment. He laid particular stress on the generality of the expression "any person" used in S. 10, Avadh Laws Act, and contended that the Collector when he sold the property was such a person. He laid particular stress on the generality of the expression "any person" used in S. 10, Avadh Laws Act, and contended that the Collector when he sold the property was such a person. He further contended that the Collector, in the circumstances of the cases out of which these appeals arise was only, to use his own expression "a statutory agent" of the landlord. Just as a right of preemption would come into existence if a sale-deed were executed by a mukhtiar on behalf of his principal, and no objection could be taken to it on the ground that the deed of sale was not executed by the owner himself, the fact that in the cases in question the transfers were effected by the Collector could be no ground for holding that a right of pre-emption did not arise, whenever such a deed of sale was executed. Reliance in support of his contention was placed by the learned counsel on Sheobaran Singh v. Kulsumun-nissa, 54 I.A. 204 : (A.I.R. 1227 P.C. 113). In that case it was laid down that where a share in a village in which the custom of pre-emption exists is vested in the official assignee under the Provincial Insolvency Act, 1906, S. 16 a sale by him is subject to the custom. An official assignee, according to Viscount Dunedin who delivered the judgment of the Board, takes the property of an insolvent exactly as it stood in his person with all its advantages and all its burden. We are clear that this decision has no bearing on the cases before us. In the case which went up to the Privy Council, the property transferred vested in the official assignee under the Provincial Insolvency Act. It is further noteworthy that that was a case in which the official assignee sold the property by private treaty. In the cases before us, the property was sold by the Collector in execution of the decrees in discharge of the authority conferred upon him by a legislative enactment. There was no vesting of any property in him. Under S. 24 (4) for realising the value of the debtor's property under that section, the Collector has been empowered to exercise all the powers of a civil Court for the execution of the decree. There was no vesting of any property in him. Under S. 24 (4) for realising the value of the debtor's property under that section, the Collector has been empowered to exercise all the powers of a civil Court for the execution of the decree. The question before us is whether the right of pre-emption given by the Avadh Laws Act comes into existence when there is a compulsory sale of the property by a Court or other authority in execution of a decree. 5. No doubt the language used in the various sections of chapter II, Avadh Laws Act by which the right of pre-emption is conferred is very general, and unless there are strong and clear reasons to hold that such right does not come into existence when compulsory sales are effected in execution of decrees, the statutory right conferred by the Act must be given effect to. 6. Suits for pre-emption which are more common in these provinces than in other parts of India arise under the Mahomedan law, custom, private contract or under statutes by which such a right is conferred. The right of preemption recognised by all these various sources has been given effect to from early times in this part of the country. It may, however, be pointed out that from equally early times judicial opinion has been against giving effect to a right of pre-emption when compulsory sales are effected. The earliest reported cases on the subject which we could find was that of Chikhoree Singh v. Hukeem Nujuf Ali, (1854) N.W.P.S.D.A. Rep. 40. It was observed in that case that the right of pre-emption supposes' an act of volition on the part of the vendor, a principle inapplicable to a transaction of compulsory sale made by any authoritative order or injunction, and that the incident of a public sale creates a new element beyond the ordinary scope of such right. Again in 1655, the same Court considered the case of Chikhoree Singh (1854) N.W.P.S.D.A. Rep. 40 and observed in Mudar Bakhsh v. Mahummud Hussun, (1855) N.W.P.S.D.A. Rep. Again in 1655, the same Court considered the case of Chikhoree Singh (1854) N.W.P.S.D.A. Rep. 40 and observed in Mudar Bakhsh v. Mahummud Hussun, (1855) N.W.P.S.D.A. Rep. 597, that: The obvious intent of the whole judgment is that ordinarily the right of pre-emption is dependent on the voluntary character of the transfer made by the owner, but that Act 1 [1] of 1841 has extended the principle to sales in execution of decrees made under the provisions of that Act, which are of a special nature. In Baboo Ram Narain Singh v. Syud Sadik Ally, (1863) N.W.P.S.D.A. Rep. 325) a Full Bench of the same Court held by a majority that where the sale was a compulsory one no claim of pre-emption could be founded either on the wajib-ul-arz or the Muhammadan law. A similar view was taken in Sah Koondun Lal v. Ram Buksh, (1860) N.W.P.S.D. Rep. 194 and in Seth Luchmee Chund v. Mt. Kesur Bahoo (1865) N.W.P.S.D.A. Rep. 139. The same view was adopted in the Calcutta High Court in Abdul Juleel v. Khellat Chunder Ghose, 10 W.R. 165 : (1 Beng. L.R.A.C. 105), the learned Judges observed that where property is sold by public auction at a sale in execution of a decree and the neighbour and partner has an opportunity to bid for the property as other parties present in Court, the ordinary law of pre-emption cannot apply to such sales. This was followed in Shaikh Ferasut Ali v. Ashootosh Roy Singh, 15 W.R. 455. The case of Sheikh Nuzmoodeen v. Kanya Jha, 1 Marsh 555 carried the rule further and held that even where the right of pre-emption between two co-sharers was based upon an express ikrar or agreement between them, sale in execution of a decree could not render the right enforcible, as it was the act of the Court though such right might have been enforced if the transfer had been by private sale. 7. 7. Though the first CPC of 1859 did not recognise the right of pre-emption in court sales, some recognition was accorded to it by S. 14 of Act XXIII [23] of 1861 which ran as follows: When the land sold in execution of a decree is a share of putteedaree estate paying revenue to Government as defined in S. 2 of Act I [1] of 1841 (for facilitating the collection of the revenue of Government and defining the interest intended to be conveyed by public sales for the realisation of arrears of the public revenue in putteedaree estates) if the lot shall have been knocked down to a stranger, any co-sharer other than the judgment-debtor, or any other member of the coparcenary, may claim to take the share sold at the sum at which the lot was knocked down. Provided that the claim be made on the day of Bale, and that the claimant fulfil all the conditions of the sale. It is noteworthy that report was had to express legislative enactment in order to extend the right of pre-emption to Court sales. Act IV [4] of 1872, the Punjab Laws Act, contained a number of sections dealing with pre-emption (See Rs. 9 to so). Section 9 defined the right of pre-emption. Section 10 read thus: The right of pre-emption extends to all permanent dispositions of property, including sales under a decree of Court and foreclosures of mortgages; but it does not affect transfers made in good faith by way of gift, nor temporary dispositions of property. Section 11 dealt with presumption of the existence of a right of pre-emption in village communities, S. 12 laid down that no presumption as to the existence of a right of pre-emption could arise in towns. Section 13 made it incumbent upon persons who proposed to sell any property or foreclose a mortgage upon any property which was subject to the custom of pre-emption to give notice to persons concerned of the price at which he offered to sell such property. Section 14 dealt with devolution of the right of pre-emption when the property to be sold was part of a village. Section 15 recognised the existence of the right of pre-emption in joint and undivided immovable property other than land. Section 14 dealt with devolution of the right of pre-emption when the property to be sold was part of a village. Section 15 recognised the existence of the right of pre-emption in joint and undivided immovable property other than land. Section 16 laid down the rule of decision in question between persons claiming a right of pre-emption in respect of immovable property in towns. Section 17 provided for a suit to enforce a right of pre-emption. Section 18 specified what the decree in suit of pre-emption should contain. Section 19 dealt with case of sales by joint owners and S. SO referred to the right of co-sharers in wells where the chakdari tenure prevailed. 8. We have been at pains to refer to these old judicial decisions and to some of the legislative enactments bearing on the question of right of preemption because they serve as the background against which we have to examine the provisions of Avadh Laws Act on which reliance is placed in support of the proposition that a right of pre-emption comes into existence when a transfer is effected by a Collector in execution of a decree under the Encumbered Estates Act. What has been stated so far makes two points clear ; 1. That up to 1860, judicial opinion was clear and definite that a right of pre-emption does not ordinarily arise in compulsory sales, and 2. That whenever it was the intention of the legislature to confer such a right resort was had to express legislative enactment. A comparison of Ss. 6 to 15, Avadh Laws Act which was passed in 1876 with Ss. 9 to 20, Punjab Laws Act of 1872 makes it clear that the Avadh Laws Act so far as the rules relating to pre-emption were concerned was based on the Punjab Act. The right of pre-emption is defined in both the Acts in the same words (See S. 6 of our Act and S. 9, Punjab Act.) Though the structure of our S. 7 is slightly different from S. 11 of the Punjab Act the rule embodied in the two sections is the same. It is unnecessary for the purposes of the present enquiry to proceed further with this comparison. It is however, noteworthy that S. 10, Punjab Act was omitted when the Avadh Laws Act was passed. It is unnecessary for the purposes of the present enquiry to proceed further with this comparison. It is however, noteworthy that S. 10, Punjab Act was omitted when the Avadh Laws Act was passed. It was under this section that the right of preemption was extended to sales held under decrees of Courts in the Punjab. It appears that the legislative opinion was against giving a right of pre-emption in sales under decrees of Courts in Avadh. It is interesting to note that though this right was continued in the Punjab even when Act iv [4] of 1872 was amended by Act XII [12] of 1878, when the Punjab Pre-emption Act was passed in 1905, the provision giving a right of pre-emption in cases of sales in execution of decrees was omitted in that province also. But it is clear that Avadh Laws Act never intended to give effect to the rules that were adopted for a period in the Punjab. The rule of law applicable to right of pre-emption in relation to compulsory sales WAS thus laid down, by Manmood J. in Baij Nath v. Sital Singh, 13 ALL 224 at p. 230 : (1891 A.W.N. 68) : It may therefore be taken as a rule of law settled by a long and uniform course of decision that a compulsory sale, such as a sale in execution of decree or a sale under an authoritative order of the revenue authorities for arrears of Government revenue does not render preemption enforcible, whether such right is claimed under Muhammadan law, the terms of the wajib-ul-arz, or on the ground of local custom or private contract; but that such compulsory sales being the creation of statute law do furnish occasion for the exercise of the pre-emptive right where such right is provided, subject to the rules and restrictions prescribed by those legislative enactments themselves. 9. We respectfully agree with the view thus enunciated. Were it that the Avadh Laws Act gave a right of pre-emption, even in respect of compulsory sale, we would expect some reference therein to the CPC which it may be noted was amended in 1861 by Act 23 and gave a pre-emptive right even in compulsory sales in certain cases. 10. We respectfully agree with the view thus enunciated. Were it that the Avadh Laws Act gave a right of pre-emption, even in respect of compulsory sale, we would expect some reference therein to the CPC which it may be noted was amended in 1861 by Act 23 and gave a pre-emptive right even in compulsory sales in certain cases. 10. If we interpret Avadh Laws Act in the manner suggested by Chaudhry Niamatulla, there would be a conflict between the provisions of that Act and Act VIII [8] of 1859 (Code of Civil Procedure) as amended by Act XXIII [23] of 1861. If Avadh Laws Act were taken to confer general right of pre-emption in the cases of all sales, including those held in execution of decrees, it would have since the passing of that Act, become incumbent on the Court executing a decree by sale of property to give notice of the proposed sale to all those in whom the right of pre-emption arose under S. 9 of the Act in respect of the sale. Nobody has ever suggested that this should be done, nor, so far as we are aware, has it ever been done. During the three quarters of a century that the Avadh Laws Act has been in force, it has always been taken that it does not apply to compulsory sales. 11. It was observed in Syed Mansab Ali v. Babu Salig Ram, 3 O.L.J. 739 at p. 740:(A.I.R. 1917 Oudh 158) that No right of pre-emption would accrue on a transfer created by a court sale as a person does not propose to sell any property under the provisions of S. 10, Act XVIII [18] of 1876, at a court sale and there is no one who could give the requisite notice and it would be impossible to state the price, and a person having a right of pre-emption would be under no obligation to make a tender under the provisions of S. 11. The provisions of this chapter do not refer to transfers made by a court sale, but to transfers made by a voluntary sale. The provisions of this chapter do not refer to transfers made by a court sale, but to transfers made by a voluntary sale. The right of pre-emption has always been to be a right to the benefit of a contract or a right of substitution entitling the pre-emptor by reason of a legal incident to which the sale itself is subject, to stand in the shoes of the vendee in respect of all rights and obligations arising from the sale under which he derives title (See Jagan Nath v. Sheo Ratan Singh, 13 O.C. 219: (7 I.C. 295)). It has never been held applicable to sales held in execution of decrees. This view finds support from an examination of the Avadh Rent Act XXII [22] of 1886. Section 155 of that Act gives a right of pre-emption at execution sales. This section makes no reference to the provisions of the Avadh Laws Act. Were the right of pre-emption given by the Avadh Laws Act applicable to compulsory sales, we would naturally expect some reference to that enactment when S. 165 was enacted. The same observations apply to S. 182, Land Revenue Act. 12. We are clear that the generality of the language used in S. 10, Avadh Laws Act considered in the light of the Judicial and legislative history to which a reference has been made, does not furnish any justification for holding that the Avadh Laws Act recognised a right of pre emption in compulsory sales. The words "any person" in the phrase "when any person proposes to sell any property" in S. 10, Avadh Laws Act does not include a Collector when he takes action under S. 28, Encumbered Estates Act. 13. That a transfer effected by the Collector under S. 38, Encumbered Estates Act is a sale in execution of a decree cannot admit of any doubt. (See Deep Chand and Others Vs. Mania and Others, AIR 1948 All 194 It was held by a Bench of the Avadh Chief Court in Sultan Singh v. Dirbejai Singh, (Second Appeal NO. 307 of 1937 decided on 16th August 1940) that a sale made under the U.P. Regulation of Sales Act did not give rise to a right of pre-emption. The same view was taken in Sheo Bandhan Pande Vs. Kishan Prasad Pande and Others, AIR 1939 All 45 14. 307 of 1937 decided on 16th August 1940) that a sale made under the U.P. Regulation of Sales Act did not give rise to a right of pre-emption. The same view was taken in Sheo Bandhan Pande Vs. Kishan Prasad Pande and Others, AIR 1939 All 45 14. For the reasons given above, we are satisfied that transfer in execution of a decree effected under S. 28, Encumbered Estates Act is not a sale in respect of which a right of preemption can arise under the Avadh Laws Act. The result therefore is that Second civil Appeal NO. 93 of 1945 is dismissed with costs. The other two appeals are allowed and both the suits which gave rise to them shall stand dismissed with costs in all the three Courts.